Impact of Covid-19 on Banking Sector in India

The Indian economy wasn’t in great shape even before the Covid-19 outbreak, which has only made matters worse. The report by the Reserve Bank of India’s (RBI) expert committee on a resolution framework, headed by former ICICI Bank chief K V Kamath, brings this out clearly. The report notes that the pandemic “has affected the best of companies” and businesses that were otherwise viable before the outbreak. Experts believe that banks may be more risk-averse to restructuring loans this time around, having already suffered big losses in previous restructuring efforts.In order to defeat the COVID-19, Pandemic, Indian Government announced complete lockdown in the country starting on March 24,2020 & the same was extended to 3rd May,2020 in the second phase. Though the lockdown was necessary & inevitable so as to prevent the faster spread of Novel Corona virus (Covid 19) & to save lives of people of the country. It is going to affect the various sectors of our economy severely. The Banking and Non-Banking finance companies (NBFCs) which are backbone of India's economy are not exception to the above. This article is an attempt to assess the impact of the pandemic on Banks & NBFCs due to lockdown which has resulted into closure of all commercial organizations, public & private offices, educational institutions, suspension of means of transportations etc.