The CBS allows the State to aggregate account balances within an offset arrangement so that financial assets are managed more efficiently, providing significant gains that include:
- reduction of net interest expense as surplus financial assets held by agencies can be applied to reduce long-term borrowing costs
- reduction of the State’s gross debt, positively impacting the State’s credit rating
- reallocation of financial resources to fund government priorities
- savings from a reduction in the number of bank accounts and bank fees
- improvement of the State’s cash forecasting.
The Standing Directions 2018 under the Financial Management Act 1994 (Standing Directions) have been amended to mandate General Government agencies, PNFCs and PFCs to hold all their bank accounts in the CBS. Standing Directions also require agencies to hold all financial assets in the CBS, subject to limited exceptions set out in Standing Directions.
Key points to note
- General Government agencies, PNFCs and PFCs, that are subject to the Standing Directions are required to hold all bank accounts with an SPC panel bank by 31 March 2022.
- Funds held in a CBS account are accessible at any time (“at call”).
- The balances of all bank accounts need to be held in the CBS unless specifically exempted. State entities can have more than one account within the CBS and with different providers to maximise the efficiency of cash management systems and functions.
- CBS accounts are subject to the same terms and conditions as bank accounts under the Banking SPC. If your agency does not currently hold an account with a panel bank as a part of the State Purchase Contract, a new CBS account(s) is required to be opened. For more details on the Banking SPC please visit the Buying for Victoria website.
How do I join the Central Banking System?
Please contact the Department of Treasury and Finance Working Capital Team by emailing working.capital@dtf.vic.gov.au and the team will respond to your query.
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