The government has asked Public Sector Banks to defer avoidable expenditure including the purchase of staff cars and refurbishment of guest houses for more productive utilization of financial resources amid coronavirus pandemic.

Department of Financial Services (DFS) has issued a detailed advisory to heads of all PSBs saying it was necessary that banks take appropriate actions to ensure productive use of their financial resources for core business activities. The advisory comes against the backdrop of PNB recently purchasing three Audi cars worth over Rs 1.30 crore for travel of its top executives.

Banks are advised to defer avoidable expenditure beyond the current financial year, including the purchase of staff cars, except where unavoidable. DFS has also directed banks to postpone 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.

Further, banks have been asked to effect a significant reduction in expenditure on activities other than those pertaining to core business activities. Besides, DFS has directed banks to avoid travel and adopt digital means of communication as well as make effective use of locally available administrative officers.

DFS, which comes under the finance ministry, has asked banks to place the advisory before their respective boards and issue appropriate instructions internally. In addition, DFS has directed banks for revision of entitlements and perquisites such as entitlements to fixed assets like vehicles and furniture and lease/ rent amounts admissible for hired residential accommodations.