The government has suspended interest-free vehicle loans for civil servants as part of a broader austerity drive.

The decision was finalized during a high-stakes Cabinet meeting chaired by Prime Minister Tarique Rahman at the Jatiya Sangsad complex on Thursday night and officially disclosed by the Cabinet Division on Friday.

Under the previous policy, government officials holding the rank of Deputy Secretary and above were entitled to interest-free loans of up to BDT 30 lakh for car purchases.

These officials also received a monthly maintenance and driver allowance of BDT 50,000, alongside an annual depreciation benefit of 10%.

With the new directive, this loan facility has been put on hold indefinitely to alleviate mounting economic pressures.

The suspension of car loans is part of a wider fiscal tightening strategy.

The Cabinet has also frozen all government-funded foreign training programs and mandated a 50% reduction in costs related to domestic training and hospitality for meetings and seminars.

Furthermore, expenses for conferences and seminars are to be slashed by 20%, while the budget for official travel will be reduced by 30%.

These measures follow a series of energy-saving and expenditure-cutting protocols announced earlier this week, signaling a rigorous shift toward state-level frugality.

According to the Cabinet briefing, these steps are essential to manage national resources effectively amid the current global and domestic economic climate.