Bangladesh Bank on Tuesday set a target for banks to reduce power consumption by 25 per cent and energy by 20 per cent in a year, as part of the government move to cut costs and save energy.

The Banking Regulations and Policy Department (BRPD) of the central bank issued a letter today and sent it to the top executives of all the scheduled banks with an instruction to act on it immediately.

According to the letter, electricity and energy costs are to be cut in two phases every six months. Savings must be shown in the financial statements. This money saved cannot be spent in any other sector.

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The BB letter stated that in the context of the current global economic situation and in view of the government's decision, in 6 months of 2022 (July to December) and the first 6 months of 2023 (January to June), banks have to ensure cost-effective use of electricity and energy.

A minimum of 20 per cent savings must be made from the allocated funds for fuel (petrol, diesel, gas, oil and lubricants). For this purpose, expenditure has to be reduced by 10 per cent in the remaining 6 months of this year and 10 per cent in the first 6 months of 2023.

Up to 25 per cent of the money allocated to the power sector has to be saved. For this purpose, in the remaining 6 months of the current year and the first 6 months of 2023, the expenditure on electricity should be reduced proportionally.

The cost reduction information and documents will be kept at the head office of the bank and should be provided to Bangladesh Bank inspectors for the purpose of audit.

In terms of guidance, the amount spent from July to December of the current year would be added to the financial statement of December 2022 and the amount spent from January to June 2023 will be added to the financial statement of December 2023.