Cut costs, shift to EVs, do online meetings: Govt asks state banks, finance and insurance firms

The finance ministry has directed state-run banks, insurers and financial institutions to implement cost-cutting measures. These include sharp curbs on travel, wider use of video conferencing and a phased shift to electric vehicles, according to an order reviewed by Reuters.

The order, issued by the Department of Financial Services on Monday, would apply to institutions such as State Bank of India, Bank of Baroda and Life Insurance Corporation of India, along with millions of employees across the country. It is part of a broader austerity push.

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Under the new measures, all meetings, reviews and consultations must be conducted through video conferencing unless physical presence is essential. Foreign travel by top executives, including chairpersons, managing directors and chief executive officers, should be kept below prescribed limits, with overseas engagements attended virtually wherever possible.

The government has also asked organisations to accelerate the adoption of electric vehicles. The order states that all organisations should aim to replace petrol and diesel vehicles hired for their head offices and branch offices with electric cars as far as possible.

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The move follows Prime Minister Narendra Modi's appeal, where he urged officials and citizens to revive practices adopted during the Covid-19 pandemic, such as work from home, online meetings and video conferences. He said restarting these systems would be in the national interest.

Modi said that rising crude oil prices and instability were putting pressure on India's foreign exchange reserves. Disruptions around the Strait of Hormuz, a key oil transit route, have raised concerns for oil-importing countries like India.

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In his speech, Modi urged people in cities with metro connectivity to use public transport and avoid unnecessary use of private vehicles. He recommended carpooling where cars are needed and called for wider adoption of electric vehicles and greater use of railways for freight transport.

He also appealed to the middle class to avoid overseas holidays, foreign weddings and other non-essential foreign travel for at least a year to conserve foreign exchange reserves. Modi asked people not to buy gold for a year, citing pressure on reserves from gold imports, and encouraged domestic tourism and the purchase of Made-in-India products.