ISLAMABAD: To adhere to IMF conditions, the government has implemented the Cash Management and Treasury Single Account Rules 2024.
These rules mandate the Finance Division to periodically identify government offices and public entities required to participate in Treasury Single Accounts (TSA).
TSA, as defined in the Public Finance Management Act, of 2019, refers to a banking arrangement for consolidating government financial resources in one or multiple bank accounts linked to a main account. Currently, an estimated Rs2 to 3 trillion remain outside the government system. The purpose of these rules is to centralise all public money into TSA, preventing its placement in commercial bank accounts, which would be unconstitutional and contrary to the PFM Act. Private banks are returning such funds at higher rates through investment in Treasury bills and PIBs, yielding substantial profits.
According to the TSA Rules 2024 issued by the Finance Division, government offices and public entities are notified to become part of the Treasury’s single account. Bank accounts holding private funds will not be included in TSA, while public funds for investment, equity, loans, grants, subsidies, and projects will be managed through assignment accounts.
The State Bank of Pakistan will host and maintain the TSA on behalf of the federal government, providing monthly reports to the Finance Division and exploring digital integration with commercial banks for information provision.
Under sweeping arrangements, a sub-account titled ‘TSA Sweeping Deposit Account’ will be opened by the State Bank of Pakistan for the implementation of sweeping arrangements. At the close of banking hours daily, balances in designated bank accounts will be consolidated in a transitory account and then transferred to the TSA Sweeping Deposit Account. Each day, the deposit in the TSA Sweeping Deposit Account will be swept out by the State Bank of Pakistan, with corresponding balances credited to respective bank accounts.
The State Bank of Pakistan will inform the Finance Division and Accountant General of Pakistan of daily credits and debits to the TSA Sweeping Deposit Account for accounting purposes. Bank account holders under sweeping arrangements will retain access to their balances. Sweeping arrangements will be phased in, starting with current accounts and expanding to other accounts as deemed feasible.
The State Bank of Pakistan is mandated to ensure that commercial banks do not charge transaction fees to account holders under sweeping arrangements.