COVID 19 and Indian Banking Sector – An Overview

Abstract

COVID 19, which is emerged as a black
swan event of the century with significant
macroeconomic impact both globally and in India. Due
to this pandemic, people lost their jobs, and they can’t
save anything, and they find it is difficult to live a
standard life. The ongoing spread of the Covid-19
pandemic is disrupting the way banks operate. Banks are
experiencing liquidity crunch, funding challenges,
changing operating models and exposure to fraud,
misconduct, and noncompliance due to COVID 19. The
COVID-19 pandemic could be the most serious
challenge to financial institutions. As the economic
fallout spreads, banks find themselves juggling some big
priorities that requires concrete steps to reposition now
while also recalibrating for the future. They’re working
to keep their distribution channels open, despite social
distancing advice and supervisory and compliance
functions that were never designed for remote work.
Banks are suffering a lot to manage revenue and meet
customer expectations and need to keep an eye on
strategy and brand issues that will define their future, as
market forces and customer behaviors potentially
change coming out of this crisis. The credit management
system of banks mainly affected with this pandemic.
Banks asset quality worsens day by day, NPA are
increasing and credit cost also increasing at a higher
level. In order to revive from these banks need to
promote digital banking services more among its
customers rather than physical visit to the banks. So all
the banking services can be provided to the customers
without any loss. Apart from the above RBI also
announced relief package by changing asset
classification and provisioning norm and through
injecting liquidity in the market.