Public sector banks on austerity drive to reduce operational costs

NEW DELHI: Public sector banks, which have witnessed a surge in the level of non-performing assets (NPAs) and are witnessing shrinking bottomlines, are looking to bring in stringent austerity measures to reduce operational costs. NPA’s are loans that do not yield returns.

Similar to the central government’s announcement of several cost-cutting measures, these banks have decided to cut down on travels, conferences in five-star hotels and even rationalisation of phone bills. That apart, most banks have decided to postpone their expansion plans outside India.

Not just that. Many banks are also trying to save costs by engaging lesser number of security guards. Shutting down of automated teller machines (ATM) at night when usage is minimal is also being adopted.

Most banks have set up spe- cial committees to look into the issue and to ensure that money is spent appropriately. “Cost-cutting measures are in place and we are trying to reduce spends from all corners, for instance whenever travel is required... the focus is on cost cutting,” a senior official at SBI, who did not wish to be identified, told HT.

“There is a lot of focus on cost cutting and we are looking at all aspects to see how costs can be kept in check,” SR Bansal, CMD, Corporation Bank, said.