CASH FLOW MANAGEMENT UNIT (CFMU)
Reform & Progress
The Cash Flow Management Unit (CFMU) has been established in the Finance Department, Government of Khyber Pakhtunkhwa, to strengthen the management, monitoring and utilization of public cash resources. CFMU is supporting the Government's transition from fragmented and account based cash management towards a consolidated, transparent, predictable and data-driven cash management system. The reform agenda is centred around the Treasury Single Account (TSA), daily sweeping, cash planning, account rationalization, improved cash visibility, bank coordination and stronger liquidity management.
The ultimate objective is:
To ensure that Government cash is visible, efficiently managed and available when required for public services and development, while minimizing unnecessary idle balances.
WHY CFMU?
The Challenge
Government departments historically maintained many bank accounts for operational, departmental and other authorized purposes. Over time, this resulted in:
- Fragmented Government cash balances;
- Idle funds in individual accounts;
- Limited consolidated visibility of Government liquidity;
- Difficulty in forecasting overall cash requirements;
- Multiple dormant and inactive accounts;
- Weak linkage between cash availability and expenditure planning; and
- Limited ability to manage Government liquidity on a consolidated basis.
CFMU was established to address these challenges and create an institutional mechanism for active management of Government cash.
THE CFMU REFORM MODEL
From Fragmented Cash → Consolidated Cash
Government Departments
↓
Bank Accounts
↓
CFMU Account Mapping & Classification
↓
Cash Planning + Account Rationalization
↓
Daily Sweeping
↓
Treasury Single Account Framework
↓
Provincial Account-I
↓
Consolidated Government Liquidity
This model is designed to enable the Finance Department to understand how much Government cash is available, where it is held, when it will be required and how it can be utilized more efficiently.
CFMU AT A GLANCE
- Baseline Account Mapping 30 June 2026
- Government bank accounts identified
- Aggregate balances identified
- Departmental accounts reviewed
- Dormant departmental accounts identified
- Inactive departmental accounts identified
- Dormant departmental balances identified
Note: The above figures represent the account-mapping baseline as of 30 June 2026 and should not be interpreted as the current live cash position.
ACCOUNT STATUS DEPARTMENTAL ACCOUNTS
The CFMU review of departmental accounts established the baseline classification:
A significant portion of the departmental accounts reviewed were classified as dormant or inactive.
This provided the basis for CFMU's account rationalization and closure programme.
The objective is not simply to close accounts, but to ensure that unnecessary accounts are removed from the Government banking structure and that eligible balances are consolidated into the Government's central cash management framework.
MAJOR REFORM ACHIEVEMENTS
A. Government Bank Account Mapping
CFMU undertook a comprehensive exercise to collect, verify, classify and consolidate information relating to Government bank accounts.
Accounts were categorized into:
Active | Inactive | Dormant | Exempted / Other Authorized Categories
This exercise established an important baseline for future monitoring and account rationalization.
Achievement
A consolidated Government bank-account database has been developed as the foundation for cash management reforms.
DORMANT & INACTIVE ACCOUNT RATIONALIZATION
Turning Dormant Accounts into Managed Government Liquidity
CFMU initiated a structured programme for closure of unnecessary dormant and inactive Government bank accounts.
The process follows:
IDENTIFY
Government bank accounts are identified and classified.
↓
VERIFY
Account details and balances are verified with departments and banks.
↓
REVIEW
Departments confirm whether accounts are required for continuing operations.
↓
CLOSE
Eligible dormant/inactive accounts are processed for closure.
↓
TRANSFER
Eligible balances are transferred to Provincial Account-I (Account-1).
↓
CERTIFY
Banks provide account-wise and department-wise closure/transfer certification.
↓
MONITOR
CFMU consolidates and monitors the implementation status.
RATIONALIZATION MILESTONE
A specific CFMU rationalization exercise identified:
- Dormant/inactive accounts for rationalization
- Balance identified in the exercise
Intended Outcome
Account Closure + Balance Consolidation + Improved Cash Visibility
The figures represent a specific rationalization exercise and should be presented separately from the 30 June 2026 total account mapping baseline.
ACCOUNT CLOSURE & BALANCE TRANSFER
From Closure to Consolidation
CFMU has moved beyond identification of dormant/inactive accounts and initiated the practical closure process with concerned banks and departments.
Banks are being requested to provide:
- Account-wise closure confirmation;
- Department-wise closure summary;
- Balance transferred;
- Date of closure;
- Date of balance transfer; and
- Confirmation of transfer to Provincial Account-I.
Why these matters
Closing an unnecessary account without tracking the balance does not complete the cash-management reform.
The CFMU approach therefore links:
ACCOUNT CLOSURE
with
BALANCE CONSOLIDATION
This creates a clear audit trail and strengthens accountability.
REVISED SOP FOR DORMANT / INACTIVE ACCOUNTS
CFMU has strengthened the institutional framework for dealing with dormant and inactive Government bank accounts through a revised Standard Operating Procedure.
The revised process provides a structured mechanism for:
- Identification;
- Classification;
- Verification;
- Retention with justification;
- Closure;
- Balance transfer;
- Bank certification; and
- Monitoring by CFMU.
The objective is to prevent unnecessary accumulation of dormant accounts and ensure that retention or reactivation of accounts follows the prescribed authorization and justification process.
DAILY SWEEPING REFORM
Moving from Idle Balances to Active Liquidity Management
One of CFMU's major reforms is the implementation of daily/end-of-day sweeping under the TSA framework.
Proposed operating principle
Departmental Bank Account
↓
End-of-Day Balance
↓
Eligible Surplus
↓
DAILY SWEEP
↓
Provincial Account-I / TSA
Daily sweeping is intended to minimize unnecessary idle balances and improve the Finance Department's consolidated visibility of Government liquidity.
CFMU is coordinating with departments and banks for operationalization of the mechanism.
CASH PLANNING REFORM
From Cash Reporting to Cash Forecasting
CFMU is coordinating with administrative departments for preparation and submission of Cash Plans at DDO/PAO level.
The cash planning framework is intended to provide better information regarding:
- Expected cash requirements;
- Timing of expenditure;
- Expected releases;
- Available balances;
- Departmental liquidity requirements; and
- Future cash needs.
The objective
Know the Government's cash requirement before the requirement arises.
This will strengthen liquidity management, improve predictability and support better budget execution.
TREASURY SINGLE ACCOUNT
Building a Consolidated Provincial Cash Framework
The Treasury Single Account (TSA) is the central pillar of the Government's cash management reform.
The Revised Cash Management Policy 2025 aims to consolidate Government cash resources through the TSA and improve liquidity management and predictability of access to Government financial resources.
CFMU is supporting this transition through:
- Bank account mapping;
- Account rationalization;
- Balance consolidation;
- Daily sweeping;
- Cash planning;
- Bank reporting;
- Provincial Account-I coordination; and
- Improved cash visibility.
BANKING SECTOR COORDINATION
One Reform Multiple Stakeholders
CFMU works closely with the banking sector to implement cash management reforms.
Key areas of coordination include:
Commercial Banks
- Account verification;
- Dormant/inactive account closure;
- Balance transfer;
- Reconciliation;
- Closure certification;
- Daily sweeping arrangements.
State Bank of Pakistan
- Provincial Account-I;
- Government cash visibility;
- Banking data;
- TSA-related coordination.
Departments
- Cash plans;
- Account verification;
- Account closure;
- Balance reconciliation;
- Operationalization of daily sweeping.
AG / DAOs
- Financial records;
- Reconciliation;
- Accounting coordination.
CASH MANAGEMENT COMMITTEE
Institutional Oversight
CFMU operates under the oversight of the Cash Management Committee (CMC) of the Finance Department.
The CMC provides strategic direction for major cash management reforms, while CFMU supports implementation, coordination, monitoring and reporting.
CFMU provides information to support decisions relating to:
- Cash position;
- Liquidity;
- Account rationalization;
- Dormant/inactive accounts;
- Daily sweeping;
- Cash plans;
- Bank reconciliation;
- TSA implementation; and
- Reform progress.
CFMU REFORM SCORECARD
Reform | Current Position
- Government bank account mapping | Baseline established
- Account classification | Undertaken
- Dormant/inactive account identification | Undertaken
- Account rationalization | In progress
- Closure of dormant/inactive accounts | In progress
- Balance transfer to Account-I | In progress
- Bank wise closure certification | In progress
- Revised dormant-account SOP | Implemented
- Daily sweeping | Implementation phase
- Departmental cash plans | Implementation phase
- TSA operationalization | Implementation phase
- SBP coordination | Ongoing
- Commercial bank coordination | Ongoing
- Cash forecasting | Implementation phase
- Cash visibility/reporting | Being strengthened
WHAT HAS CHANGED?
Before CFMU
- Fragmented bank accounts
- Limited consolidated cash visibility
- Dormant and inactive accounts
- Idle balances
- Periodic cash information
- Limited forward cash forecasting
↓
CFMU REFORMS
- Account mapping
- Account rationalization
- Daily sweeping
- Cash planning
- TSA implementation
- Bank coordination
- Cash forecasting
↓
Desired Outcome
CONSOLIDATED + VISIBLE + PREDICTABLE + EFFICIENT GOVERNMENT CASH
IMPACT OF THE REFORMS
- Better Cash Utilization
- Government funds can be used more efficiently instead of remaining unnecessarily idle.
- Improved Liquidity
- The Finance Department can better understand available Government cash.
- Stronger Financial Discipline
- Bank account retention, closure and reporting are brought under a structured framework.
- Greater Transparency
- Account-wise and department-wise information improves the audit trail.
- Better Cash Forecasting
- Departmental cash plans support forward-looking liquidity management.
- Improved Budget Execution
- Better cash availability and forecasting support timely implementation of Government priorities.
- Reduced Fragmentation
- Unnecessary dormant and inactive accounts can be eliminated from the Government banking structure.
THE WAY FORWARD
CFMU is moving into the next phase of implementation with focus on:
- Completion of dormant/inactive account rationalization.
- Further closure of unnecessary Government bank accounts.
- Consolidation and transfer of eligible balances to Provincial Account-I.
- Expansion and operationalization of daily sweeping.
- Institutionalization of DDO/PAO level cash planning.
- Strengthening of Government cash forecasting.
- Development of consolidated cash dashboards and management reporting.
- Improved bank-wise and department-wise reconciliation.
- Continued coordination with SBP and commercial banks.
- Capacity building of departmental officers on cash planning and TSA compliance.
CFMU'S VISION
From Managing Bank Accounts to Managing Government Cash
CFMU is helping transform the Government of Khyber Pakhtunkhwa's approach to cash management.
The reform is not simply about reducing the number of bank accounts.
It is about creating a system in which:
- Every Government rupee is visible.
- Every unnecessary account is rationalized.
- Every eligible surplus is efficiently consolidated.
- Every major cash requirement can be forecast.
- Every public resource is available for its intended purpose.
OUR OBJECTIVE
To establish a modern, transparent, efficient and data driven provincial cash management system that ensures public funds remain available for timely service delivery and development while minimizing idle balances and unnecessary financing costs.