International Journal of Research and Innovation in Social Science (IJRISS) |Volume VI, Issue XII, December 2022|ISSN 2454-6186
Impact of COVID 19 on the banking sector
Dr. Meenu Baliyan, Muskan Goel
IMSEC Ghaziabad, India
Abstract: COVID-19 adversely affected the Indian Economy as well as human lives. Almost all the sectors have been affected. This paper aims to investigate the COVID-19 pandemic’s effect on the banking sector. Because of the lockdown, there were no sources of income. That’s why people demanded advances and on the other hand, they were not able to pay the loans. To overcome this situation, the Reserve bank of India and the central Government have taken many measures to provide relief to the people. This Research Paper shows the relationship between NPAs, Advances, and Profitability due to COVID-19 and also the impact of measures taken by RBI and the government in the Indian Banking sector.
Keywords: Covid-19, Banking Sector, Pandemic, Indian Banking, Reserve Bank of India.
I. INTRODUCTION
In January 2020, coronavirus emerged in India and hit millions of lives with thousands of deaths across the world. To fight COVID-19, the Indian Government announced complete lockdown in the country starting on March 24, 2020 and the same was extended to 3rd May, 2020. A similar action has been taken by many governments around the world. However, this kind of measures taken by the Indian Government to control the spread of covid-19 pandemic impacted the GDP of the country in a disruptive way.
One of the most important sectors of the Indian economy is the banking sector which is responsible for all the financial activities going on in the country and working as a supporting hand to all of the industries in terms of financing, credit, transactions, collection and payment and so on. Covid-19 has caused so much effect in the performance of the Indian banking sector in terms of NPAs, Profitability, advances etc. Indian banks have faced a difficulty during the pandemic period and it has changed the profitability of the Indian banks.
They have faced many challenges and the changes they made have impacted on their financial statements. One of the core impacts was because of the increase in NPAs, non-repayment of loans and demand of credit. And these have caused the banks to reduce their profitability from the year 2019 onwards. To check the impact of COVID-19 on Indian Banks, various policy measures were taken by Reserve Bank of India and Indian Government at centre level and state level. Some experts believe that Banking sector mainly in India may take a long time to recover from the impact of this pandemic.