Federal Division has requested the relevant banks through the State Bank of Pakistan (SBP) to close all commercial bank accounts relating to Federal Government Entities having zero balances.
The Finance Division collected the information of all the accounts maintained by the Federal Government Entities through SBP to consolidate the cash balances of the Federal Government. After a thorough analysis of this information, the Finance Division has discovered that thousands of zero balance accounts (ZBAs) in scheduled commercial banks are inoperative.
To resolve this problem, the Finance Division has issued the closure of all commercial ZBAS.
According to Article 78 of the constitution, all the money received by the federal government or on behalf of the government is deposited as part of the Federal Consolidated Fund (FCF) or Public Account of the Federation (PAF). Furthermore, the FCF’s and PAF’s cash balances are maintained in Central Account No. 1 (Non-Food) at the State Bank of Pakistan (SBP), only to be withdrawn by an Act of Parliament under Article 79 of the constitution.
The federal government had also legislated the Public Finance Management (PFM) Act, 2019, in this regard, according to which public money is to be a part of the FCF and the PAF. As per Section 22 of the act, all the decisions regarding the FCF and the PAF are within the purview of the Finance Division under the supervision of the federal government.
It is pertinent to mention that previously, the Finance Division had prohibited Public Sector Entities (PSEs) and autonomous bodies under the federal government from depositing working balances and surplus funds in private banks.
