Treasury Single Accounts Sailendra Pattanayak, Senior Economist, Fiscal Affairs Department, The International Monetary Fund, Recent trends affecting Treasury Single Accounts and an overview of current thinking on this important PFM component will be the focus of this session.

1. Establishing a Treasury Single Account (TSA) – Concept, Issues and Challenges Sailendra Pattanayak Fiscal Affairs Department International Monetary Fund

3. Typical Payment System with Many Bank Accounts May 2010 Sailendra Pattanayak, IMF Spending Ministry Bank Accounts SU SU SU SU SU SU SU SU Ministry of Finance Spending Ministry Spending Ministry SU = Spending Units SU

4. Banking Arrangements under TSA Regime May 2010 Sailendra Pattanayak, IMF Debt administration Subsidies Local governments Suppliers Wage earners          Daily settlement with TSA Current / deposit bank account(s) of the treasury (TSA) Transit / zero-balance bank accounts of the treasury Tax payers Government Borrowings

5. 2. TSA Principles and Benefits

10. 3. TSA Structure and Operation

11. TSA Structure – Option 1 May 2010 Sailendra Pattanayak, IMF State Treasury Head Office State Treasury Regional office State Treasury Local office Central Bank Central Bank Regional branch Budget unit Payment order Payment order Reconc. Settlement Settlement Limited Treasury communication and information systems

12. TSA Structure – Option 2 May 2010 Sailendra Pattanayak, IMF State Treasury Head Office State Treasury Regional office State Treasury Local office Central Bank Payment order Reconc. Settlement Budget unit Advanced Treasury communication and information systems (2a)

13. TSA Structure – Option 3 May 2010 Sailendra Pattanayak, IMF Budget Unit Commercial Bank Regional Branch Commercial Bank Head Office Payment Order Very Reliable and Advanced Commercial Bank Sector Central Bank Reconc . Settlement State Treasury Head Offic e

16. TSA using Commercial Banking system network and RTOs May 2010 Sailendra Pattanayak, IMF TSA at CB Bank A Bank B Branch 1 Branch 2 Branch 1 Branch 2 RTO and BIs RTO and BIs RTO and BIs RTO and BIs Taxpayer/supplier Taxpayer/supplier Taxpayer/supplier

17. Use of regional CB offices May 2010 Sailendra Pattanayak, IMF TSA at CB Regional CB office Regional CB Office Bank Branch 1 Bank Branch 2 Bank Branch 3 Bank Branch 4 RTO and BIs RTO and BIs RTO and BIs RTO and BIs Taxpayer/supplier Taxpayer/supplier Taxpayer/supplier

18. TSA using Commercial Banking network (no RTOs) May 2010 Sailendra Pattanayak, IMF TSA at CB Bank A Bank B Branch 1 Branch 2 Branch 1 Branch 2 Taxpayer/supplier Taxpayer/supplier Taxpayer/supplier Taxpayer/supplier Treasury and BIs

22. 4. TSA Coverage and Interface with Transaction Processing Systems

27. 5. Banking Arrangement for Donor Flows

31. 6. Issues/Preconditions for Establishing a TSA

36. May 2010 Sailendra Pattanayak, IMF Thank you