Finance ministry recomments cost cuts at banks and insurersWithout obstructing operation efficiency, finance minister has asked banks and insurance companies to cut their operations cost by 10%.
Apnainsurance.com Research Bureau
04 Aug 2008
Without obstructing operation efficiency, finance minister has asked banks and insurance companies to cut their operations cost by 10%. As reported by The Economic Times, a finance ministry official said, "The prudent measures would help banks tackle a scenario where high interest rates and low margins are impacting profits." The finance ministry further added, "The government has asked the institutions to take cost-cutting measures as their declining profits would lead to reduced dividend payments to the government, resulting in more pressure on the fiscal situation."
has suggested measures to banks and insurance companies like restricting
seminars and conference in five star hotels, to put a cap on foreign tours in
order reduce cost. It has also asked them to take part only in exhibitions
related to trade and business activities.
The aim behind containing the cost of operation is to ensure adequate resources, for meeting the objective of development in the social and infrastructure sectors, and other priority schemes.