Lawstreet Journal

Centre Dictates PSBs To Cut Down on Expenses, Days After PNB Buys Audi Cars for Top Officials

Lawstreet Journal 19 Jun 2020 1:13am

Image courtesy: Lawstreet Journal Executive Centre Dictates PSBs To Cut Down on Expenses, Days After PNB Buys Audi Cars for Top Officials

The Department of Financial Services has issued a notice to the heads of all PSBs directing them to make a reduction of 20 percent in their expenditure pertaining to non-core business operations.

The advisory comes days after state-owned Punjab National Bank purchased 3 Audis worth Rs. 1.34 crore for commotion purposes of its top officials. The luxury cars were bought for its managing director and two senior executives. The decision, taken during the difficult times of the COVID pandemic, invited much criticism.

The letter, signed by Mr. AK Ghosh, has advised PSBs to observe deferment of avoidable expenditures. “In the context of COVID-19 pandemic, it is necessary that banks take appropriate measures to ensure productive use of their financial resources for core business activities,” it read.

“Expenditure that can be deferred without adversely impacting business operations may be deferred beyond the current financial year, 

such as 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 officers and back offices, and refurbishment of guest houses,” the letter read.

The advisory, without mentioning PNB, said, “The bank board’s executive committee/ management committee may review the composition of the existing fleet of vehicles engaged on hire while taking into account functional imperatives, profitability and the cost-to-income ratio of the bank’s operations and the occupancy level of guest houses.”

Apart from this, the Department of Financial Services directed the banks to revise entitlements and perquisites, such as entitlements to fixed assets like vehicles and furniture and… Continue Reading...

Tagged: Punjab National Bank  
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