ISLAMABAD, May 7, 2026 — The Ministry of Finance (MoF) has expanded the coverage of Pakistan’s Treasury Single Account (TSA) framework by adding 66 new public entities, according to an official circular issued on Thursday.
(more…)Tag: Treasury Single Account
-
Govt. offices given procedure for closure of commercial bank accounts
ISLAMABAD: The finance division has issued procedure for government offices to close their accounts with commercial banks and transfer of all available funds to treasury single account (TSA).
According to official documents made available on Sunday, the finance division said that as per the Cash Management and TSA Rules 2020, the government offices are neither allowed to undertake any cash operation outside the TSA nor obliged to open, operate or maintain a bank account in any commercial bank.
They can only operate through the principal government account i.e Central Account No.1 (Non Food) maintained with State Bank of Pakistan for deposit and withdrawal of all public moneys.
However, in contravention of the constitutional and legal provisions as mentioned in clause-1 above and the provisions of Cash Management and ‘NA Rules 2020, the Government Offices are maintaining a large number of commercial bank accounts purportedly to operate various funds, deposits, reserve funds etc, which are otherwise legally required to be maintained in the Public Account/Central Account No.1 (Non food).
Resultantly, considerable amount of public money has been parked in the commercial bank accounts, hence held outside the TSA system.
Therefore, under the Cash Management and TSA Rules 2020, they have been required to close all the bank accounts and transfer the public money held outside the TSA system, to the Central Account No.1 (Non food).
The prime objective of devising this procedure is to facilitate the Government Offices in closure of the commercial bank accounts, transfer of all the available balances to the Public Account/Central Account No.1 (Non food) and undertake further public account transactions through the Government Central Account No.1 (Non food).
It has therefore been found expedient to prescribe a dedicated and hassle free procedure for withdrawal of funds from the Public Account through non-lapsable special assignment account, as the existing Assail assignment account procedure is for withdrawal of funds from the Federal Consolidated Fund only.
Moreover, in order to ensure uniformity in fiscal operations, the Personal Ledger Accounts (PLAs), Special Drawing Accounts (SDAs) and Revolving Fund Accounts (Local Currency) shall be discontinued forthwith as already approved by the Finance Division.
-
Cash management, Single Treasury Rules implemented
The State Bank of Pakistan (SBP) announced on Tuesday the implementation of the Cash Management & Single Treasury Account (CM & TSA) Rules, 2020. This significant development aims to enhance the management of public finances by centralizing the treasury operations of the Federal Government.
(more…) -
SBP directs banks to close all government accounts under TSA
KARACHI: State Bank of Pakistan (SBP) has started implementing Treasury Single Account (TSA) and directed all banks to close all accounts related to government authorities.
In a communication issued on Wednesday, the SBP said that the Finance Division, Government of Pakistan (GoP) vide their letter F.No.1(1)/S.O(TSA)/2020 dated August 19, 2020 has directed all Federal Government Ministries, Divisions, Attached Departments and Subordinate Offices (MDAS) to close their banks accounts with the commercial banks/financial institutions and transfer the balance funds to the Federal Government’s Central Account No.I (non-food) with SBP.
The banks have been directed that their branches would receive the ”Account Closure Request” from the respective authorized signatories on the specified format issued by Finance Division (annexure B of aforesaid letter) for closure of such bank accounts and transfer of balances therein to SBP.
In this regard, following instructions are issued to banks for meticulous compliance:
a. In line with the instructions of authorized signatories, the banks shall close all such accounts and transfer their balances to SBP for onward credit to the Federal Government’s Central Account No.I (non-food).
b. In order to ensure closure of all the accounts and transfer of their balances to SBP through a standardized procedure, banks are hereby advised to develop their internal applications and processes to keep track of the i). Receipt of directives by the authorized signatories; ii). Closure of accounts by banks’ branches and transfer of available balances to their centralized treasury and iii). Transfer of the consolidated amount by the centralized treasury to the SBP through RTGS.
c. Upon receipt of account closure request, the respective branches will initiate the closure of accounts and transfer the available balances to their centralized treasuries within seven (07) days through their internal application referred in (b) above.
d. The respective branches shall convey the following details to their centralized treasuries, through standardized internal application referred in (b) above.
1. Names of Administrative/controlling ministries
2. Names of Government Departments/Institutions
3. Account Titles
4. IBANs
5. Balances Transferred
6. Branch Code
e. The centralized treasury of each bank shall transfer the aggregate amount of deposits surrendered by its branches on daily basis to SBP through RTGS Message Type (MT-202) for onward credit to the Federal Government’s Central Account No.I (non-food). The MT-102 shall invariably mention reference phrase “Government Deposit Transferred to Central Account-I (non-food)”.
f. The banks’ centralized treasuries shall forward the details of such closed accounts to SBP Banking Services Corporation (BSC) Karachi Office as per Annexure I.
-
Rules for treasury single account system notified
ISLAMABAD: The ministry of finance has notified Cash Management and Treasury Single Account Rules, 2020 under which treasury single account system has been explained.
According to the rules the Treasury Single Account system shall be:
(1) Federal Consolidated Fund Account, Public Account, assignment accounts, their sub-accounts and linked accounts as approved by the Finance Division, shall form part of the treasury single account system.
(2) Monies that have been appropriated through the Federal Government budget and have been transferred to scheduled bank accounts by Government offices shall be reverted to the non-food account No.1 of the Government by the 30th June 2020, as non-tax receipt of the Government as provided in sub-rule (3) of rule 4.
(3) Finance Division shall identify and notify all Government offices which are required to be included in the treasury single account system, after classification and evaluation of all existing bank accounts being maintained by such offices.
(4) Government offices that are fully funded through the Federal Government budget by using either local or foreign sources, including project and programme loans and grants, shall operate their bank accounts through treasury single account system and no cash operation shall be allowed outside the treasury single account. Assignment accounts, sub-assignment accounts and revolving fund accounts shall be used in case of local currency or foreign currency funding requirements. 7
(5) Any government investment, loan, grant, subsidy, equity, project or scheme either funded locally or through foreign aid shall be provided to government enterprises and offices through sub-accounts of treasury single account system including assignment accounts, sub-assignment accounts and revolving fund accounts opened in public account.
(6) Procedure for opening, operating and closing of assignment accounts including its sub-accounts and linked accounts shall remain operative as per Notification No. F.2(2)-BR-II/2008-948/18 dated 12.10.2018 issued by Finance Division, unless amended.
(7) The SBP or its banking agent NBP shall operate or cause to operate assignment accounts, sub-assignment accounts and linked accounts as approved by Finance Division according to assignment accounts procedure. Assignment account both for local currency and foreign currency shall be part of non-food account No. 1 of Government maintained by SBP. Principal accounting officers shall be responsible for overseeing operations of such accounts including request for approval from Finance Division for opening of assignment accounts.
(8) A request for opening of assignment accounts may be sent to Finance Division under existing procedure, available at www.finance.gov.pk. An assignment account shall be opened with designated branch of NBP for incurring expenditure under assignment accounts procedure.SBP and its agents shall be responsible for issuing bank statement for reconciliation and cooperate with Government offices as well as Finance Division for conflict resolution, if any.
(9) The Government offices using the assignment accounts shall be responsible for enforcing financial order and strict economy at every step and after observance of all relevant fiduciary rules and regulations. The Government offices shall ensure that not only the total expenditure is kept within the limits of the authorized ceiling but also that the funds allocated to spending units are expended in the public interest and for objects for which the money was allocated. In order to maintain a proper control, the Government offices shall put in place a monitoring mechanism to know not only of what has actually been spent from an appropriation but also what commitments and liabilities have been and will be incurred against it.
(10) The Government offices concerned shall maintain proper books of accounts and maintain receipt and revenue ledger and disbursement ledger so that the balance of receipt side shall correspond with the money deposited in receipt account. Similarly, expenses shall be reconciled with bank statement issued by SBP or its agents. 8
(11) The withdrawing entities shall be responsible for accounting of expenditure on a daily basis. On the basis of record and the bank statement, the drawing authorities shall render classified account of expenditure to the accounting offices on a monthly basis by 10th of each month for reconciliation of expenditure. The variations, if any, shall be reconciled and appropriate entries shall be made to update the accounting records. Monthly and quarterly release of funds shall be subject to reconciliation with accounting offices. The NBP shall report the account remaining undrawn against the authorized ceiling at the close of a financial year to accounting office in respect of each assignment account within a month.
(12) The SBP shall host and maintain treasury single account on behalf of the Federal Government. It shall provide electronic gateway system for necessary payment reports and ability to check the account balances online and real-time. The SBP shall collect information from commercial banks under section 31 of the Act and ensure provision of all information to the Finance Division to ensure implementation of the treasury single account system.
(13) Principal accounting officers, overseeing the Government offices on the instructions of Finance Division, shall close all bank accounts in commercial banks and provide evidence of such closure to Finance Division. Principal accounting officers shall transfer to treasury single account balances of accounts that contain public moneys appropriated through the Government’s.
(14) Accounting office’s shall ensure that no payment is made from the Federal Consolidated Fund without available budget, assignment accounts and sub-accounts are maintained for treasury single account system and that reconciliations are carried out on quarterly basis between book balances, bank statements and GFMIS.
-
Treasury Single Account to have every penny of public money: finance ministry
ISLAMABAD: Every penny of the public money shall be reverted to the Treasury Single Account (TSA), within the framework of different authorized accounts of government in the State Bank of Pakistan (SBP) or its nominated agency and cash therein shall be zero balanced, the ministry of finance said.
According to Budget Manual issued this month by the ministry of finance explained that TSA means a banking arrangement for the consolidation of government financial resources in one bank account or multiple bank accounts linked to one main account through which the government transacts all its receipts and payments.
The ministry said that the ultimate objective of introducing the treasury single account arrangement is not only to ensure the efficient cash management but also to minimize the cost of short term borrowing by the federal government.
Withdrawal of public money from the Government Account (SBP) and park, deposit and invest somewhere (in commercial banks) at zero or less competitive rate of return is against the spirit of the provisions under Section 20 of the PFM Act-2019.
The principles defined in the cash management policy approved by the Cabinet can be enlisted as under:
(a) Government shall put in place a framework and timeline to ensure unified structure of the TSA as per law and expand it into the major areas of legal exceptions through amendments in the relevant law/rules. It shall ensure maximum fund availability of cash resources in real time;
(b) the government shall put in place a legal and institution regime to give exceptions from the TSA;
(c) the government shall bring all the public entities into the budgetary, accounting and cash management framework;
(d) the government shall empower the cash manager/s to oversee the cash management operations across the spectrum of budget and its operations;
(e) Cash balance in the TSA shall be maintained at a level sufficient to meet daily operational requirements and a linkage between cash management and debt management shall be institutionalized; and
(f) the government shall ensure full consolidation of cash balances of all government entities (budgetary and extra-budgetary) and devise a mechanism daily zero balancing of the TSA and monthly reporting of complete cash balance of the government within and outside the TSA.
Besides, all the money collected by the public entities as their own revenue and kept in the accounts opened and maintained in the scheduled banks, after specific authorization by the Federal Government, shall be reconciled and reported to the Finance Division by the SBP through its RTGS on daily basis.
The SBP shall devise a regime for availability of this cash for use by the Federal Government and need based disbursement to the relevant public entities.
If any account is opened in a scheduled bank without a specific authorization by the Federal Government, disciplinary proceedings shall be initiated against head of the organization and Principal Accounting Officer concerned under the relevant laws/rules.
The Federal Government shall, however, be empowered to give exception to any organization from the TSA after recommendation by a Committee, which shall be constituted and notified in light of this policy. This committee shall also propose legal amendments for removal of already granted exceptions and inclusion of new exceptions from the TSA, after due deliberation, for approval of the Federal Government.
The detailed rules, under Section 30 of the Public Finance Management Act-2019, are under drafting in the Finance Division and, shall be issued after approval of the Federal Government.
-
Finance ministry issues 10-year treasury single account policy
ISLAMABAD: The ministry of finance on Wednesday issued 10-year Cash Management & Treasury Single Account Policy with aim to bring every penny into government’s nominated agency.
The policy has been issued with the objective of timely availability of cash to meet obligations, economizing on cash within the government so as to save interest costs and management of government’s cash flows efficiently in a way that benefits debt management, and monitory policy.
“Every penny of the public money shall be reverted to the TSA, within the framework of different authorized accounts of Government in the State Bank of Pakistan (SBP) or its nominated agency and cash therein shall be zero balanced,” the ministry said.
Besides, all the money collected by the public entities as their own revenue and kept in the accounts opened and maintained in the scheduled banks, after specific authorization by the Federal Government, shall be reconciled and reported to the Finance Division by the SBP through its RTGS on daily basis.
The SBP shall devise a regime for availability of this cash for use by the Federal Government and need based disbursement to the relevant public entities. “If any account is opened in a scheduled bank without a specific authorization by the Federal Government, disciplinary proceedings shall be initiated against head of the organization and Principal Accounting Officer concerned under the relevant laws/rules,” the ministry said.
Federal Government shall, however, be empowered to give exception to any organization from the TSA after recommendation by a Committee, which shall be constituted and notified in light of this policy.
This committee shall also propose legal amendments for removal of already granted exceptions and inclusion of new exceptions from the TSA, after due deliberation, for approval of the Federal Government.
The key objectives of the policy are:
1. To ensure availability of cash when it is required
2. To manage cash balance in the government bank accounts effectively by:
a. Borrowing to cover expected cash short falls, and avoid “idle” balances
b. Investing during periods of surplus
c. Minimizing borrowing costs
3. To neutralize impact of the government’s cash flows on the domestic banking sector ensuring that:
a. Therearenolargeandun-expectedchangesinliquidityinthebankingsystem,
b. Overall monetary policy (incl. monetary growth and inflation targets etc.) is not under-mined.
The ministry of finance said that the cash management policy will focus on efficient cash management with ability to forecast daily cash flows across the TSA. “It shall result into smooth cash flows with lower average cash balances, reduced borrowing costs, lower interest on cash balances than interest on marginal borrowing and less pressure on monetary policy operations.”
In spite of this clearly stipulated legal regime, a huge amount of cash is held outside the TSA structure on the arguments including:
I. Statutory Requirement: Different statutes conceive independent funds for the entities created under them consisting of a portion of money from public fund and the rest from other sources;
II. Strategic Requirement: Most of the defence organization and strategic entities transfer the public money into private commercial accounts on the argument of strategic secrecy;
III. Functional Independence: Some public entities take out public money into their private accounts on the argument of functional independence;
IV. Operational Requirement: some public money is transferred into private accounts on the basis of geo-graphical reasons and in-accessibility or remoteness of the treasury and banking facility; and
V. Commercial Operation: Public money invested in to the commercial operations is taken out of the TSA most of the times and treated under a different cash and accounts management regimes governed under special laws/rules.
The ministry highlighted common issues stating that cash held outside TSA is kept in multiple bank accounts with no cash consolidation as the public money.
As a result, the cash position in the public money is affected negatively and most of the times, the cash manager/s of the government is/are forced to raise money, to meet the cash requirements, from the same scheduled banks which are holding its money, most of the times larger the debt raised, into the accounts opened on the above mentioned arguments.
“The government suffers, thus, on two counts, it is unable to utilize its cash and pays interest on the cash which is actually its own lay idle and re-munerated. Moreover, it becomes difficult to establish exact and full cash position of the government, hence it becomes impossible to prioritize and control expenditure disbursements.”
In addition, there are serious issues of accounting, reconciliation, performance monitoring and evaluation.
On the other hands, an effective TSA gives a complete, real time information on government cash resources, enables efficient cash management, helps in preparation of accurate and reliable cash flow forecasts, optimizes the cost of government operations (includes minimizing the volume and cost of government borrowing and lowering liquidity reserve needs) increases the return on excess cash, facilitates efficient collection and payment mechanisms, improves operational and appropriation control during budget execution, enhances efficiency and timeliness of bank reconciliation, facilitates timely and more complete accounting statements/reports, including sources and uses of cash.
The principles under this policy are:
I. Government shall put in place a framework and timeline to ensure unified structure of the TSA as per law and expand it into the major areas of legal exceptions through amendments in the relevant law/rules. It shall ensure maximum fungibility of cash resources in real time;
II. Government shall put in place a legal and institution regime to give exceptions from the TSA;
III. Government shall bring all the public entities into the budgetary, accounting and cash management framework;
IV. Government shall empower the cash manager/s to oversee the cash management operations across the spectrum of budget and its operations;
V. Cash balance in the TSA shall be maintained at a level sufficient to meet daily operational requirements and a linkage between cash management and debt management shall be institutionalized; and
VI. Government shall ensure full consolidation of cash balances of all government entities (budgetary and extra-budgetary) and devise a mechanism daily zero balancing of the TSA and monthly reporting of complete cash balance of the government within and outside the TSA.
-
Bank deposits reach all time high at Rs13.46 trillion
KARACHI: The deposits of banking system have increased to all time high at Rs13.46 trillion in May 2019. However, the record deposits are at risk as the government planned to create Treasury Single Account (TSA) in the latest budget.
The deposits of the banking system have increased by 9.8 percent to Rs13.459 trillion by May 2019 as compared with Rs12.258 trillion with the deposit level on the same month a year ago, according to State Bank of Pakistan (SBP).
Previously, the deposits of banking system had increased to the highest level at Rs13.456 trillion in March 2019.
In the budget 2019/2020, the government announced to establish treasury single account for the government exposure.
Industry source said that the initiatives of TSA would have negative repercussions on the banking deposits.
The has drafted a proposal to introduce TSA to transfer its deposits that are currently being maintained with commercial banks, to SBP.
In this regard, SBP recently held a meeting with bank representatives to brief them about the proposed mechanism of TSA.
Analysts at Topline Securities said that it would be a negative development for banks in terms of systematic risk as total government deposits with commercial banks are around Rs1.9 trillion or 13.7 percent of total deposits, around which, Rs0.9 trillion are of the federal government.
Bank of Khyber (BOP) has the highest government deposits (Federal & Provincial) of 63 percent of its total deposits, followed by Bank of Punjab (BOP) 56 percent, Askari Bank (AKBL) 33 percent and National Bank of Pakistan (NBP) 29 percent.
The analyst said that in the first phase, federal government deposits (around Rs0.9 trillion) will be transferred to SBP under single account, which may be followed by transfer of provincial deposits (around Rs1 trillion).
-
Instructions issued for moving public money to treasury single account
ISLAMABAD: The ministry of finance said that the State Bank of Pakistan (SBP) has been directed to design procedure for bringing back public money from commercial banks to Treasury Single Account (TSA).
‘A Roadmap for Stability and Growth’ issued by the ministry of finance this month, said that the central bank had been instructed to design administrative procedures, and an IT system, for rolling back public monies from commercial banks to TSA.
The ministry highlighted the weakness in fiscal management that many public sector agencies park unspent monies outside the TSA.
“By end 2018 there was an estimated Rs1.4 trillion in these accounts,” the ministry said.
This reflects a clear case of lack of oversight of public finances, it added.
These accounts of the public agencies are not linked to the Treasury Single Account (TSA) and while these amounts are reflected in SBP reports, they remain outside the fiscal reporting framework of the government.
Some of the monies are due to ‘leakages’ from the fiscal management system and are reported as expenditure in the past fiscal reports.
Thus, showing a larger than actual fiscal deficit.
Moreover, these accounts adversely impact government’s cash management and audits of public expenditure.
The government has introduced an enabling provision for Treasury Single Account (TSA) regime for Government’ cash management system has been incorporated in the draft Public Finance Management and Administration Bill.
This provision gives a rule-based regime of cash management through the TSA.
Simultaneously a policy for TSA is being drafted in consultation with stakeholders and expected to be ready soon for submission to the Federal Cabinet for approval.
-
Stakeholders to be taken onboard on TSA: SBP
KARACHI: State Bank of Pakistan (SBP) on Wednesday said that stakeholders would be taken onboard while taking decision on Treasury Single Account (TSA).
In a statement, the central bank said that some news are circulating on social media regarding government plans to introduce TSA.
While the proposal to introduce TSA is being examined by the government in consultation with the SBP as part of its agenda to reform public financial management, however, no decision has yet been made to implement the TSA, the central bank said.
“Any decision in this regard will be taken after due consultation with all the stakeholders and assessing its impact on the banking industry,” it added.
It will, therefore, be premature to form any opinion about the proposed policy decision and thus the market players should avoid engaging in any speculative activities based on this proposal which is still under examination.