Money & Banking

Covid impact: Finance Ministry asks PSBs to cut expenditure on non-core activities

Our Bureau Mumbai | Updated on June 18, 2020

The Ministry of Finance.   -  The Hindu

The Finance Ministry has asked public sector banks (PSBs) to defer avoidable expenditure, including purchase of staff cars, effect significant reduction in expenditure on non-core business activities, and defer revision of entitlements and perquisites in FY21 in the context of the Covid-19 pandemic.

The ministry emphasised that it is necessary that banks take appropriate measures to ensure productive use of their financial resources for core business activities.

Hence, expenditure on purchase of staff cars, except where unavoidable; 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 can be deferred without adversely impacting business operations.

The ministry said economy in expenditure to the tune of 20 per cent year-on-year may be effected on activities other than those pertaining to core business activities.

In this regard, it has identified activities such as entertainment, publicity, travel (by adopting digital means of communication and making effective use of locally available administrative officers).

The ministry wants PSB Board’s executive committee/management committee to review the composition of the existing fleet of vehicles engaged on hire (taking into account functional imperatives and profitability) and occupancy levels in guest houses.

As part of the economy measures, the ministry said revision of entitlements to fixed assets like vehicles and furniture; and lease/rent amounts admissible for hired residential accommodation may be deferred.

Published on June 18, 2020

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