Pakistan to Close 70 Government Bank Accounts to Consolidate Public Funds
Pakistan has agreed with the International Monetary Fund (IMF) to close 70 government bank accounts and transfer approximately Rs. 300 billion to the national treasury as part of efforts to improve public financial management and reduce borrowing costs.
According to officials, the accounts included in the first phase belong to various ministries and attached departments. These non-interest-bearing accounts collectively hold around Rs. 300 billion, which will be shifted to the treasury single account system.
This step follows earlier consolidation of 242 accounts, which transferred nearly Rs. 200 billion into the national treasury. Officials said the government plans to continue the process, with total expected transfers reaching around Rs. 400 billion.
The initiative is part of broader commitments under the IMF program, where Pakistan has also agreed to improve debt management and extend the maturity period of domestic debt to improve financial stability.
In the next phase, authorities plan to review additional savings accounts held by government departments. However, some autonomous bodies may be exempt depending on their financial structure and reliance on federal funding.
Officials explained that the objective of the reform is to reduce fragmentation of public funds, as multiple accounts in commercial banks can increase borrowing costs for the government.
The Ministry of Finance is currently developing a formal framework under the Public Finance Management Act to implement the account consolidation process in phases.
At the same time, Pakistan is also working on broader debt management reforms, including reducing reliance on central bank borrowing and improving the maturity profile of domestic debt.
Officials said the average debt maturity period has already improved in recent years, and further steps are being taken to strengthen the domestic debt market and improve efficiency in government securities issuance.
