Pakistan has agreed with the International Monetary Fund (IMF) to close 70 bank accounts of government departments and transfer around Rs. 300 billion into the national treasury, as part of efforts to consolidate public funds and reduce borrowing costs.
The move is part of commitments made under the IMF program, where Pakistan has also agreed to strengthen debt management by extending the maturity period of domestic debt to four years and two months by June 2027.
According to officials, the accounts being closed in the first phase are non-interest-bearing accounts maintained by ministries and attached departments, with total balances of about Rs. 300 billion to be transferred to the treasury single account.
This is in addition to 242 accounts already shifted earlier, which held around Rs. 200 billion, showing gradual progress in consolidating government cash resources. Officials said the government ultimately plans to close all remaining non-savings accounts, with total transfers expected to reach around Rs. 400 billion into the federal consolidated fund.
In the second phase, authorities plan to close saving accounts of ministries and departments as well, although autonomous bodies may be exempt if they do not rely on federal budget funding.
The issue of fragmented government accounts has long been a concern for the IMF, which has argued that public funds are often kept in commercial banks where they earn returns, while the government simultaneously borrows at higher costs.
However, the finance ministry has maintained that forcing independent authorities to surrender their funds could affect their financial autonomy, creating a balance between reform and institutional independence.
The ministry is now preparing a formal framework with timelines to close accounts and shift balances under the Public Finance Management Act and treasury rules.
The issue has also drawn attention at the parliamentary level. A Senate committee recently raised concerns that around Rs. 1 trillion remains parked in private bank accounts of state-owned entities, regulators, and autonomous bodies instead of being transferred to the federal consolidated fund.
Officials said Pakistan has committed to continuing this consolidation process while dropping earlier plans to conduct a detailed sector study, opting instead to follow existing legal frameworks.
Alongside account consolidation, debt management reforms are also underway. Pakistan has agreed to gradually reduce reliance on central bank borrowing and extend the maturity profile of domestic debt to reduce refinancing risks.
The current average maturity has already improved to around three and a half years, up from about two and a half years before the IMF program began. The government is also working to develop the domestic debt market, expand the investor base, and explore digital channels for issuing government securities more efficiently.
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