Cut foreign travel, use more EVs: Finance Ministry’s ‘austerity’ steps for public sector banks & insurers

The Ministry of Finance on Monday (May 18, 2026) wrote to the heads of all public sector banks, regional rural banks, public sector insurers, and public sector small finance institutions, urging them to adopt several “austerity” measures in a bid to rationalise expenditure.

According to a circular, reviewed by The Hindu and titled ‘Implementation of austerity measures for rationalisation of expenditure’, the Department of Financial Services asked the heads of its regulated entities to cut costs along two broad heads: reduction in travel, and the adoption of electric vehicles (EVs).

The circular does not mention the West Asia crisis, but it comes a little more than a week after Prime Minister Narendra Modi exhorted the nation to adopt similar austerity measures.  

The circular specified that “all meetings, reviews, consultations and presentations” are to be conducted via videoconferencing unless physical meetings are specifically required. 

It added that foreign travel by the chairpersons, managing directors and CEOs, whole-time directors, and whole-time members of the boards of these institutions “may be kept below the prescribed limits” as laid out in the existing guidelines. It added that, as far as possible, such engagements should be attended through videoconferencing. 

“All organisations may aim at replacing the petrol and diesel cars hired by them in their head offices and branch offices with electric cars as far as possible,” the circular added. “Existing fleets shall be progressively transitioned to EVs in a phased manner.”

The government has, in the past, adopted such austerity measures as well. However, the ones adopted on Monday are likely the most drastic since the steps taken in 2020 in reaction to the COVID-19 pandemic.