Public Financial Management System (PFMS) was established as a web-based online transaction system for fund management and e-payment to implementing agencies and beneficiaries. The primary objective of is to link with the financial networks of Central and the State Governments and the agencies of State Governments.


The PFMS system is linked to the Core Banking System (CBS) of banks, to get real-time reporting of banking transactions and for making e-payment of subsidy under Direct Benefit Transfer (DBT) to both Aadhar based & Non- Aadhar based bank accounts through NPCI. This system uses NACH PLATFORM (National Automated Clearing House) to transfer funds to accounts of people all over the country as India has many government subsidy schemes. This PFMS acts as a robust mechanism to transfer the subsidies to the bank accounts of the beneficiaries.

Transferring subsidies directly to the beneficiaries through their bank account is known as Direct Benefit Transfer (DBT). The purpose of this direct transfer is to bring to the citizen, efficiency, effectiveness, transparency and accountability in the Government system. Through the DBT, Government intends to achieve electronic transfer of benefits thus cutting down delays in payments and more importantly, accurately targeting of beneficiaries, thereby arresting leakages and duplication in short this system.

1. Acts as a financial management system for all plan schemes. It stores all data of all recipient agencies and integrates with core banking solution of banks, which handle plan funds, integrates with State Treasuries. This helps in efficient and effective tracking of fund flow to the lowest level of implementation for plan scheme of the Government.

2. Provides information across all plan schemes/ implementation agencies in the country on the utilization of funds leading to better monitoring, review and decision making to enhance public accountability in the implementation of plan schemes.

3. Helps in better cash management for Government, through transparency in public expenditure, real-time information on resource availability and utilization across schemes.

Also Read: What is PFMS? Basics of PFMS…

4. Results in improved program administration and management, reducing the float in the system, directly making payments to beneficiaries and thereby creating greater transparency and accountability in the use of public funds.

5. The proposed system will also act as an important tool for improving governance.

All financial data captured by this system can, therefore, be resolved with system authenticated transactions.

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