FinMin warns PSU banks against purchase of costly staff cars

Finance Ministry today warned public sector banks against purchase of "high value" staff cars, some of which are then sold to officials at a depreciated price.
"...It has been pointed out by the Vigilance Commission that banks are purchasing high value cars/vehicles," the ministry's Department of Financial Services (DFS) said in a communication to the chiefs of all public sector banks.
In line with the "prevalent focus" on austerity in public expenditure on administration, the DFS said that it is desirable to rationalise such spending.
It further said that the expenditure on vehicles needs to be rationalised in particular as many banks have policies permitting purchase of vehicles on depreciated value.

"Purchase of expensive vehicles particularly close to retirement and their sale at a depreciated price to officers is a matter of concern that has come under vigilance scrutiny," the department said.
The DFS has asked state-owned banks to consider selling old cars and other vehicles at "market price through a transparent process".
Banks have been asked to adhere to the April 2007 guidelines regarding purchase of staff vehicles and "to revisit" their policies related to purchase, replacement, re-sale of cars/vehicles in the "best interests" of the bank, with the approval of the respective Board of Directors.
In April 2004, the ministry had permitted banks to purchase new vehicles for replacement or otherwise on "need basis".