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Box 2. Various Types of Bank Accounts under a TSA System
TSA main account. This is the treasury’s account with the central bank which consolidates the government’s cash position. It
is the main TSA account when the TSA arrangement in a particular country consists of a set of linked accounts. Cash balances
in all other linked accounts are swept into this account. In other words, all government receipts finally flow into, and all
disbursements are met from, the central TSA account.
TSA subsidiary accounts or sub-accounts. These are not separate bank accounts per se (in the sense of holding individual
cash balances), but are special sub-accounts within the main TSA account. This is basically an accounting arrangement to
group together a set of transactions and allows the government to maintain the distinct accounting identity or ledger of its
budget organizations (line ministries/agencies) effectively. A cash disbursement ceiling for each entity can be enforced
against these ledgers. Balances in these accounts are netted off with the TSA main account for cash management purposes.
Transaction accounts. Sometimes government bank accounts that are justified for retail transaction banking operations are
opened separately and are structured as transaction accounts. These separate transaction accounts could be opened for
government entities that need transaction banking services, but do not have a direct access to the TSA main account or a
subsidiary account, and/or specific category of operations (e.g., special funds). A transaction account could take the form of a
zero-balance account or an imprest account. It is possible to impose a cash disbursement limit (for the concerned agency) on
a particular transaction account, which could be monitored by the concerned bank.
1
Zero-balance accounts (ZBAs). Where transactional accounts are necessary, these are generally opened on a zero-balance
basis, i.e., end-of-the-day cash balances in these accounts are swept back into the TSA main account periodically (preferably
daily). Such accounts opened in commercial banks are used for disbursements or for collection of government revenues
(particularly nontax revenues). At the end of the day, all revenues collected would be deposited in the TSA. The commercial
bank would honor payments of the respective agency, and would be reimbursed by the TSA overnight. ZBAs have many
similarities with special credit line arrangements, where budget agencies are provided spending credits towards the amount of
payments they can make within a specified period, to be reimbursed by the TSA in the central bank. A ZBA also has the
benefit that it bypasses the normal interbank settlement process for each individual transaction, which is often time consuming
in developing countries, and ensures same-day settlement on a net basis for all receipts and payments passing through the
accounts.
Imprest accounts. These transaction accounts can hold cash up to a maximum authorized amount and are recouped from time
to time. Such accounts might be necessary in some cases, particularly when there is only limited availability of interbank
settlement facilities. However, the number of imprest accounts should be kept to a minimum and the strategy should be to
progressively transform these accounts into zero-balance accounts.
2
Transit accounts. These accounts are not meant for day-to-day transaction banking operations of government units. A transit
account simply serves as a transit for eventual flow of cash into the TSA main account. Transit accounts might be necessary:
(i) for major revenue streams to monitor their collection and remittance by the banking system; and (ii) to facilitate revenue
sharing (formula-based sharing from a common pool of resources) between tiers of government in a federal system in line
with constitutional and/or legal requirements.
3
Correspondent accounts. A separate ledger account is opened for each correspondent. The correspondent entity has real-
time information on the balances it maintains in the TSA. There should be safeguards to ensure that each correspondent
government is provided with the funds needed to implement its own budget in a timely manner. The central bank (which
maintains the accounts in the TSA) has the obligation to make payments to the extent of the balances available in a
correspondent’s account.
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1
The bank accepts the payment orders sent by spending units up to a certain limit defined by the treasury.
2
In any case, cash holding imprest accounts should not be opened to bypass the normal budget execution procedure (including the required
ex ante control for authorizing payments).
3
This objective could also be met by developing a treasury ledger for the purpose.