(May 18): India’s state-run banks have been directed by the government to use video conferencing facilities for meetings and limit overseas travel to reduce fuel usage and preserve foreign exchange reserves.
All state-run financial entities including banks and insurance companies have also been asked to hire electric vehicles to the extent possible, while transitioning their existing petrol-and-diesel-powered vehicles to an electric fleet in a phased manner, according to a document seen by Bloomberg News.
The development comes amid a series of austerity measures put in place to reduce the drawdown of foreign exchange reserves and support the rupee, which fell as much as 0.4% to 96.3925 per dollar on Monday. The Indian rupee is down 6.7% against the dollar in Asia’s worst performance this year.
The government notification dated May 18 also states that chairpersons and managing directors of state-run financial entities should use video conferencing for meetings held overseas as far as possible to cut spending. A finance ministry spokesperson didn’t immediately respond to an email seeking comment.
As the world’s third-largest importer of oil, India is among the worst hit nations due to the ongoing crisis in the Middle East. With the Strait of Hormuz, a key waterway for energy effectively blocked for more than two months because of the Iran war, energy prices have soared, threatening to impact demand in India.
Over the past week, Prime Minister Narendra Modi’s government has doubled import taxes on gold and silver, while also tightening import rules for these precious metals to shield the economy. State refiners raised retail fuel prices for petrol and diesel, the first such increase in four years, and the government is now looking to sharply reduce the taxes paid by foreign investors on India bonds to boost inflows, Bloomberg News reported.
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