Govt implements sweeping fiscal reforms to cut debt

The federal government, on Monday, notified new fiscal rules to reduce its debt servicing cost by gradually tapping into trillions of rupees of public money that ministries and departments have parked in commercial banks. The Ministry of Finance issued new Cash Management and Treasury Single Account Rules in order to capture the details and money parked in the non-interest private bank accounts of government departments in the first phase. The International Monetary Fund (IMF) has long pressed to bring public money back into the State Bank of Pakistan (SBP) by withdrawing it from commercial banks. However, various entities, including the military and police, have resisted these efforts. According to these rules, at the end of every working day, the SBP will sweep out the cash of government ministries, divisions, executive offices, and attached departments parked in commercial banks. The next day, the money will be made available to the commercial banks.