Finance Ministry asks PSBs to defer 'avoidable' expenditure

NEW DELHI: No new cars, no interior decoration items, no unnecessary travel, no refurbishment of guesthouses, and a freeze on revision of prerequisites - these are part of a finance ministry diktat to state-owned banks to defer "avoidable" expenditure until the next fiscal.

The ministry on Wednesday also directed public sector banks to reduce spending on publicity and conferences by 20% or more year on year by using social media and press releases effectively and pooling advertising expenses with other PSBs.

"In the context of the Covid-19 pandemic, it is necessary that banks take appropriate measures to ensure productive use of their financial resources for core business activities," it said.


The order comes on the wake of reports that a large public lender had spent ₹1.34 crore on three Audi cars to ferry its top management.

The ministry told banks to take it up in their next board meeting and issue appropriate instructions internally and sensitise senior executives to follow the order in letter and spirit.

Purchase of staff cars topped the list of avoidable expenditures, followed by interior decorations and refurbishing guesthouses.