Pakistan to close 70 govt bank accounts, shift Rs300 billion to treasury under IMF deal

Pakistan has agreed with the International Monetary Fund (IMF) to close 70 bank accounts of government ministries and attached departments and transfer around Rs300 billion to the national treasury as part of fiscal reforms under the $7 billion programme, The Express Tribune reported. 

Officials said the non-interest-bearing accounts will be moved to the Treasury Single Account (TSA) in the first phase, adding to 242 accounts already transferred with balances of about Rs200 billion.

The government plans to eventually close all non-saving accounts, with total balances of around Rs400 billion expected to be shifted to the Federal Consolidated Fund.

The move is aimed at consolidating public funds, improving cash management and reducing borrowing costs by limiting idle balances held outside the treasury.

In the next phase, the government intends to close saving accounts of ministries and departments, while autonomous bodies that do not rely on federal budget funding may be allowed to retain their accounts.

The finance ministry is also preparing a framework to set timelines for closing accounts and shifting balances in line with the Public Finance Management Act and Treasury Single Account rules.

As part of the agreement, Pakistan has also committed to reduce refinancing risks by extending the average maturity of domestic debt to four years and two months by June 2027, from around two and a half years at the start of the programme.

The IMF has long pushed for consolidation of government cash holdings, arguing that fragmented banking arrangements allow public entities to hold funds in private accounts, which are then lent back to the government at higher rates.

The issue has drawn attention domestically as well, with a Senate committee raising concerns over around Rs1 trillion held by state-owned enterprises, regulators and autonomous bodies in private bank accounts instead of the federal treasury.

Officials said the government will continue efforts to centralise cash balances and has decided against conducting a sector study, opting instead to proceed under existing legal and regulatory frameworks.