Investment in govt securities: Proposal to transfer EDF money to bank account approved

ISLAMABAD: The government has approved a proposal allowing the Export Development Fund (EDF) Board to transfer funds from its Public/Treasury Account to a commercial bank account for onward investment in government securities, as the suspension of the Export Development Surcharge (EDS) has halted a major source of the Fund’s revenue.

According to an official document, the Ministry of Commerce submitted the proposal to the ECC in a summary dated October 6, 2026, seeking permission to invest EDF resources in government securities to generate income and ensure the Fund’s financial sustainability.

The Ministry of Commerce informed the ECC that collection of the Export Development Surcharge had been suspended with effect from December 1, 2025, following directions of the Prime Minister on the recommendations of a working group constituted by the Prime Minister’s Office. The suspension was implemented through Finance and Revenue Notification No. SRO/2335(I)/2025.

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The government had suspended the surcharge as part of efforts to reduce the cost of doing business for exporters. In parallel, the process to amend the Export Development Fund Act and reconstitute the Fund’s Board was initiated. The legislative process concluded with the President’s assent on January 26, 2026, after which the Federal Government appointed new members of the EDF Board through a notification issued on February 17, 2026.

The Commerce Ministry told the ECC that, with its major revenue source suspended, the Fund needed alternative income streams to offset the impact on its resources and maintain its sustainability over the coming years.

The matter was discussed during the 93rd and 96th meetings of the EDF Board, where it was decided to approach the Finance Division for facilitation and approval to invest EDF funds in fixed-income government securities or transfer them to an interest-bearing account with the National Bank of Pakistan (NBP) for investment purposes.

The Ministry of Commerce subsequently took up the matter with the Finance Division, explaining that the EDF was managed through the Public Account, was non-lapsable and could earn income from its investments.

The Finance Division examined the proposal and supported investment of EDF funds in government securities. However, it observed that transferring funds from a government account to a commercial bank account for investment purposes would require Federal Government approval under Section 23(2) of the Public Finance Management Act, 2019.

In view of the Finance Division’s position, the Commerce Ministry sought the ECC’s approval for the EDF Board to transfer funds from its Public/Treasury Account to a commercial bank account for onward investment in government securities.

The ECC considered the proposal and approved it, paving the way for the Fund to invest its available resources in government securities and generate income following the suspension of the surcharge.

The decision is intended to help the EDF maintain its financial sustainability while the government’s move to suspend the EDS continues to reduce the cost burden on exporters.

Copyright Business Recorder, 2026