FinMin asks PSU banks, insurers to adopt austerity measures, shift to EV

The Finance Ministry on Monday urged public sector banks and financial institutions to adopt austerity measures and shift to electric vehicles, following Prime Minister Narendra Modi's appeal.

Last week, the Prime Minister made an appeal to citizens for judicious use of fuel, postponement of gold purchases and foreign travel, among other measures, to strengthen the economy, emphasising that the Centre is trying to shield people from the adverse impact of the West Asia conflict.

The Department of Financial Services, in a circular issued to public sector banks (PSBS), regional rural banks (RRBS), public sector insurance companies (PSICs) and financial institutions (PSFIs), urged them to reduce expenses on travel and the adoption of electric vehicles (EVs).

 

Austerity measures would be implemented with immediate effect, the Department of Financial Services under the Ministry of Finance said in the circular.

All meetings, reviews and consultations should be conducted through video conferencing unless physical meetings are specifically required, it said.

Foreign travel by chairpersons, MD and CEO and whole-time directors of banks and financial institutions may be kept below the prescribed limits, and such engagement may, as far as possible, be attended through video conferencing, it added.

With regard to EVs, the circular said all organisations may aim at replacing the petrol and diesel cars hired by them with electric cars as far as possible.

The existing fleet should be progressively transitioned to EVs in a phased manner, it noted.

The Prime Minister on May 10 called for judicious use of fuel, postponement of gold purchases and foreign travel, among other measures, to strengthen the economy.

He suggested reducing petrol and diesel consumption, using metro rail services in cities, car-pooling, increased use of electric vehicles (EVs), utilising railway services for parcel movement, and working from home to conserve foreign exchange amid the crisis in West Asia.

Stressing the need to save foreign exchange due to the crisis, Modi called for postponing the purchase of gold and foreign travel for one year.

Following Modi's appeal, many government departments and state governments urged to follow austerity measures.