Pakistan to Consolidate Rs300bn in Government Funds Under IMF Deal
By Shahzad Paracha :
Pakistan has agreed with the International Monetary Fund to close dozens of government bank accounts and transfer hundreds of billions of rupees into a central treasury system, as part of broader reforms tied to its financial support programme.
Under the agreement, authorities will shut down around 70 non-interest-bearing accounts held by ministries and departments, shifting approximately Rs300 billion into the national exchequer. Officials say this is the first phase of a wider plan that could eventually see about Rs400 billion consolidated into the federal consolidated fund.
The move builds on earlier steps in which more than 240 accounts, holding roughly Rs200 billion, were already merged into the treasury system. The government ultimately aims to close all remaining non-saving accounts and streamline how public funds are managed.
The reform centres on strengthening the Treasury Single Account (TSA) system — a mechanism designed to pool government cash resources in one place. The IMF has long argued that fragmented banking arrangements allow public entities to hold idle funds in commercial banks, which can then lend the same money back to the government at higher interest rates.
However, Pakistani officials have drawn a line around fully autonomous bodies, maintaining that organisations not dependent on federal funding should retain control over their own accounts to preserve financial independence.
In parallel, Islamabad has committed to reducing financial risks linked to its debt profile. It plans to extend the average maturity of domestic debt to over four years by mid-2027, up from around two and a half years before the current bailout programme began. A longer maturity period lowers the risk of frequent refinancing and helps stabilise government borrowing needs.
The agreement also includes steps to improve transparency in debt management, broaden the investor base for government securities, and gradually reduce reliance on central bank borrowing.
Lawmakers have recently voiced concern that state-owned enterprises and regulatory bodies are holding as much as Rs1 trillion in private bank accounts, potentially outside the framework set by public finance laws. The new measures are intended to bring such funds under tighter oversight.
The reforms mark another attempt by Pakistan to modernise its public financial management system, with the IMF emphasising that effective cash consolidation can significantly reduce borrowing costs and improve fiscal discipline.
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