The Union Finance Ministry has directed the top executives of all (PSBs) to ensure necessary measures for productive use of their financial resources in core business activities and limit expenditure on non-essential items by 20%.
The Ministry also asked PSBs to defer the revision of entitlements and perquisites in FY21 in the wake of the coronavirus (Covid-19) pandemic.
The directive is followed by the reports that claimed the Punjab National Bank (PNB) had bought three Audi cars worth Rs 1.3 crore for its executive directors amid the Covid-19 outbreak.
As listed the ministry, the items where expenses should be minimal are entertainment, publicity, travel, and use of external infrastructure.
The ministry has also directed the banks to trim the expenses in appointing fleets of vehicles, guesthouses and increase in expenditure has been blocked for privileges such as vehicle and furniture entitlement and rent amounts given for residential accommodation.
The banks have to place this advisory before their respective boards in its next meeting and issue appropriate instructions internally. It has also put the onus on the top management to ensure instructions are followed in letter as well as spirit.