The Government of Khyber Pakhtunkhwa’s Finance Department has released a new circular dated 05 November 2025, addressing how salaries and Raast payments must be handled to avoid negative cash balances in the provincial account. The notification highlights an important administrative issue and gives clear directions to all relevant departments.
What is the new direction issued by the KP Finance Department on salary and Raast payments?
Short answer (Featured Snippet ready):
The Finance Department has instructed all departments to ensure that salaries and Raast payments are deducted only after receiving and confirming the Federal Tranche. Payments must be disbursed on the first working day of each month to maintain a positive cash balance.
Background of the Issue
According to the circular, the Finance Department observed that salaries processed through Raast were disbursed from Provincial Account No. I (Non-Food) on 27th, 28th and 29th October 2025 without notifying the department.
Because the Federal Tranche had not yet been received during those dates, this premature deduction caused the Provincial Account No. I (Non-Food) to slip into a negative balance. The department noted this as a serious administrative issue that needs immediate correction.
Reference to Federal Treasury Rules
The notification reminds departments of Para 217 of the Federal Treasury Rules, which states:
“Bills for monthly pay and fixed allowances of government servants may be signed at any time on the last working day of the month and shall be due for payment the next working day.”
This rule is meant to ensure smooth cash flow and prevent irregularities in government accounts.
New Directions Issued to All Departments
To avoid future cash deficits and ensure compliance with the Memorandum of Understanding (MoU) signed between:
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Provincial Government
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State Bank of Pakistan
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Federal Government
the Finance Department has issued a clear directive:
• Salaries, allowances, and Raast payments must only be disbursed on the first working day of each month.
• Payments will be made only after the Federal Tranche is received and confirmed in Provincial Account No. I (Non-Food).
This instruction aims to maintain a positive cash balance and avoid operational difficulties across departments.
Who Received This Circular?
Copies of the notification were sent to:
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All Administrative Secretaries
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Deputy Commissioners
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State Bank of Pakistan (Chief Manager, Peshawar)
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Director Treasury & Accounts, KP
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Regional Heads of National Bank of Pakistan (KP)
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Budget Officers & Section Officers
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PS to Finance Secretary
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Relevant PAs to Additional and Deputy Secretaries
The circular is officially signed by:
Taj Muhammad – Budget Officer (W&M)
Why This Notification Matters
Government salary cycles affect thousands of employees. Any disruption in cash flow can impact:
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Timely salary credit
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Departmental budgeting
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Provincial financial health
By emphasizing timely confirmation of the Federal Tranche, the Finance Department aims to ensure smooth and predictable payment processing.
