CB urges cuts in banks’ ‘unnecessary’ expenses
View(s):The Central Bank (CB) has called for information on commercial banks’ expenses deemed as ‘unnecessary’ by them. This follows a CB directive sent last June to commercial banks amidst the pandemic to stop ‘unnecessary’ expenses including marketing budgets and increase in directors’ emoluments.
“The details of last and this month’s spend were sent recently,” a senior banker told the Business Times.
The regulator is closely monitoring banks’ spend on these areas, many bankers confirmed to the Business Times. The CB had wanted them to use this cash for more inward lending, they added. Considering the national importance of reviving the business sectors that were adversely affected by the COVID-19 and the exceptional circumstances of the economic impact of the COVID-19 pandemic, the CB issued this directive, they noted. Now the regulator is strictly implementing this directive due to the various constraints in liquidity, a banker noted. The CB had discussions with the banks on their extra spending and this measure was proposed to stop undue level of stress or threaten the stability of the banking system, he added. (DEC)