Pakistani government is set to replace traditional petty cash systems with debit cards for all public sector enterprises (PSEs). The decision, approved by Prime Minister Shehbaz Sharif, comes after concerns over the mismanagement of physical cash within government departments.
Sources indicate that a high-level meeting chaired by the Prime Minister identified the need for a more streamlined and accountable system for handling petty expenses. Debit cards were deemed the most suitable option to address these issues.
To oversee the transition, a government committee led by the Finance Division has been established. The committee will conduct a thorough evaluation of existing payment procedures, develop a comprehensive framework for debit card usage, and assess the potential benefits and challenges associated with the new system.
The government is optimistic that this shift to digital payments will not only reduce the risk of fraud and embezzlement but also improve financial management practices across the public sector. By centralizing financial transactions, authorities expect to gain better visibility into spending patterns and identify potential areas for cost savings.
Concurrently, the government is taking steps to bolster the formal economy by addressing challenges related to remittances and currency stabilization. A working group comprising key government agencies is tasked with restoring the cash-over-counter facility at National Bank of Pakistan branches, particularly at border crossings. This move is intended to discourage the use of informal money transfer channels like Hawala and Hundi, which have been linked to illicit financial flows.
The government’s broader strategy involves creating incentives for individuals and businesses to utilize formal banking channels for foreign exchange transactions. By promoting transparency and reducing the shadow economy, the government hopes to strengthen the country’s financial system and support economic growth.
