Government bank accounts: Finance ministry frames Cash Management, TSA Rules 2020

ISLAMABAD: The Ministry of Finance has framed Cash Management and Treasury Single Account (TSA) Rules 2020 aimed at anticipating cash needs, manage cash balance in the government bank accounts and to ensure availability of cash, well-informed sources told Business Recorder.

The Public Finance Management (PFM), Act, 2019 was promulgated on July1, 2019 to comply with the provisions of Article 79 of the Constitution which stipulates that " the custody of the Federal Consolidated Fund, the payment of moneys into that fund, the withdrawal of money therefrom, the custody of other moneys received by or on behalf of the federal government, their payment into and withdrawal from, the public account of the Federation, all matters connected with ancillary to the maters aforesaid shall be regulated by Act of (Majlis-e-Shoora) Parliament, or until provision in that behalf is so made, by rules made by the President.

The provisions contained in the PFM Act, 2019 now regulate such functions, and encapsulates a number of financial reforms. Under section 22 of the Act, the operation of the Federal Consolidated Fund and the Public Account of the Federation, vests in the Finance Division under the overall supervision of the federal government. According to the provisions of sections 30 of the Act, the Finance Division, shall, with the approval of the federal government, notify rules, to prescribe an effective cash management system for all public entities and special purpose funds leading to treasury single account. Section 31 of the Act provides that the Federal Consolidated Fund Account shall be maintained in the State Bank of Pakistan, and any such other bank accounts may be opened, as required by the Finance Division from time to time, in accordance with the SBP Act, 1956.

In compliance of section 30 of the PFM Act, 2019, the Finance Division has framed cash Management & Treasury Single Account Rules, 2020, in consultation with relevant stakeholders. The fundamental principles and objectives of the rules are, to anticipate cash needs, of the government, manage cash balance in the government bank accounts effectively and to ensure availability of cash when it is required. Moreover, the rules provide for institutional and administrative arrangements to manage effective cash management system including placement of all public moneys into treasury single account.

The draft cash management and Treasury Single Account (TSA), Rules, 2020 will extend to government offices, i.e. Ministries, Divisions, and Executive Departments, including attached department and subordinate offices. Finance Division will framework separate rules for autonomous, regulatory or other bodies established and directly or indirectly controlled by the federal government, at a later stage.

Copyright Business Recorder, 2020