New Delhi: The government Wednesday asked state-owned banks to defer avoidable expenditure. It said there should be restrictions on purchase of staff cars and refurbishment of guest houses. State-owned banks have been asked ensure more productive utilisation of financial resources amid the coronavirus pandemic.
A detailed advisory to the heads of all public sector banks has been sent. The Department of Financial Services (DFS) said it was necessary that banks take appropriate measures to ensure productive use of financial resources.
The advisory also comes against the backdrop of Punjab National Bank (PNB) recently purchasing three Audi cars worth over Rs 1.30 crore. The cars will be used by its top executives.
Banks are advised to defer avoidable expenditure beyond the current financial year, including purchase of staff cars. This should be done, except where unavoidable, the advisory said.
DFS has also directed the banks to postpone expenditure on decorative, non-functional items for the interiors. Non-customer facing premises like administrative and back offices and refurbishment of guest houses will remain suspended now. Further, 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-on-year or more may be effected. This should be done on activities or heads of expenditure such as entertainment and publicity. It can be done by making efficacious use of social media and press releases. Pooling resources with other PSBs (Public Sector Banks) for common publicity campaigns where appropriate can be done,” it said.
DFS has also directed banks to avoid travel and adopt digital means of communication. It has also asked banks to make effective use of locally available administrative officers.
DFS comes under the Union Ministry. It has asked banks to place the advisory before their respective boards and issue appropriate instructions internally. “Top management may also suitably sensitise senior executives to give effect to this advisory in letter and spirit,” it said.
The finance ministry has asked all ministries and departments not to initiate any new scheme in the current financial year. Earlier this month, the ministry said there was a need to use resources prudently in these difficult times.
Schemes that have already been approved for the current financial year would remain suspended till March 31 next year or further orders.