Defer avoidable expenditure, reduce costs: Govt to banks

NEW DELHI: The government on Wednesday asked state-owned banks to defer avoidable expenditure, including purchase of staff cars and refurbishment of guest houses, to ensure more productive utilisation of financial resources amid the coronavirus pandemic.

In a detailed advisory to the heads of all public sector banks, the Department of Financial Services (DFS) said it was necessary that the banks take appropriate measures to ensure productive use of their financial resources for core business activities.

The advisory also comes against the backdrop of Punjab National Bank recently purchasing three Audi cars worth over Rs 1.30 crore for travel of its top executives.

Banks are advised to defer avoidable expenditure beyond the current financial year, including purchase of staff cars, except where unavoidable, the advisory said.

DFS has also directed the banks to postpone expenditure on decorative, non-functional items for the interiors in non-customer facing premises like administrative offices and back offices, and refurbishment of guest houses. Further, the banks have been asked to effect significant reduction in expenditure on activities other than those pertaining to core business activities.

"Economy in expenditure to the tune of 20 per cent year-onyear or more may be effected on activities or heads of expenditure such as entertainment, publicity, by making efficacious use of social media and press releases, and pooling resources with other PSBS (Public Sector Banks) for common publicity campaigns where appropriate," it said.