India orders state-run banks to cut travel, speed EV adoption

India’s finance ministry has ordered state-run banks, insurers and other financial institutions to trim travel, move most meetings online and begin shifting vehicle fleets toward electric cars, turning a budget directive into a visible push for austerity and cleaner transport. The order covers major public-sector names including State Bank of India, Bank of Baroda and Life Insurance Corporation of India, and is meant to reach millions of employees across the country.

Under the new instructions, meetings, reviews and consultations are to be held by video conference unless physical attendance is essential. Top executives, including chairpersons, managing directors and chief executive officers, were told to stay within prescribed foreign-travel limits and attend overseas engagements virtually where possible. The Department of Financial Services also asked institutions to accelerate electric vehicle adoption, including by replacing petrol and diesel vehicles hired for use at head offices and branch offices with electric cars as far as possible.

The move fits a broader government message of restraint. Prime Minister Narendra Modi appealed on May 11 for people to curb fuel use, reduce foreign travel and pause gold purchases as Middle East tensions raised concern about India’s dependence on imported energy. That warning carried clear economic stakes: prolonged conflict in the region could slow growth, stoke inflation and strain the balance of payments, particularly if oil prices stay elevated.

The pressure is already showing up in markets. The rupee fell to a fresh record low of about 96.18 to 96.25 per U.S. dollar on May 18, while the trade deficit widened to $28.38 billion in April, driven in part by a higher oil bill. Together, those figures underline how vulnerable India remains to imported energy costs and global risk sentiment, especially when the dollar is strong and crude prices are firm.

The EV order also extends an earlier mobility policy beyond government offices in Delhi, where hired petrol and diesel vehicles were already targeted for replacement with electric vehicles. By pushing public-sector financial institutions to cut travel and change procurement behavior at the same time, New Delhi is signaling that cost control and energy transition are now linked priorities, not separate agendas. The question for banks, insurers and the wider public sector is whether this is a symbolic round of belt-tightening or the start of a deeper austerity program that reshapes how government-linked institutions spend, move and operate.