BB asks banks to stop buying cars, cut operating and development costs

The Bangladesh Bank has ordered all commercial banks to reduce development and operating costs, and stop buying cars in an effort to save precious US dollars and fuel.

The central bank on Wednesday also asked them to reduce spending on travel, felicitation, computers, accessories, electrical equipment and furniture. A maximum 50 percent of the funds for these purchases can be used.

The money saved “cannot be spent to pay for bills in other categories”, said a notice, adding the orders will be effective until June 2023.

The Bangladesh Bank instructed all banks to come up with a year-long plan, from July 2022 to June 2023, to “cut operating and development costs in several categories”.

Banks must preserve all documents showing expenses and present them during Bangladesh Bank inspections.

The government is exercising austerity to save up dollars and cut back on the use of power amid a global energy crisis and surging inflation.

Aligning itself to the cause, the central bank in a separate notice on Wednesday asked all non-bank financial institutions (NBFIs) to trim electricity and fuel use by 25 percent until further instruction.

Both the notices mentioned that all the directives will take immediate effect.

Last week, the government took eight decisions to slash expenses and control commodity prices, including stepping up efforts to balance out the energy crisis with a 25 percent reduction in the use of electricity in public offices.

The decisions also included reducing fuel expense allocation for government officers by 20 percent.