IS THE BANKING SECTOR WILL GET AFFECTED DUE TO COVID-19 PANDEMIC
                     WILL THE 
BANKING 
SECTOR BE 
AFFECTED DUE 
TO COVID-19 
PANDEMIC?
INTRODUCTION
The COVID-19 pandemic has emerged as the black swan event 
which is going to require extraordinary measures to help 
resume economic stability.
Financial institutions need to evaluate, test and implement 
business continuity and contingency plans along with building 
business innovations and operational flexibilities.  
Source: Moneycontrol
ECONOMIC 
SLOWDOWN
Decreased productivity and lockdowns have already started to 
take a toll on the financials of the corporate sector. 
Supply chain disruptions, manufacturing hindrances and 
crippled health systems need a hefty public fund/stimulus to 
continue operations smoothly.
Source: The Financial Express
FINANCIAL MARKET 
We have seen humongous losses in the financial markets of 
up to Rs 56.22 trillion in the month due to this pandemic. 
Investor sentiments are at an all time low and it is also 
becoming evident how difficult it is going to be for banks all 
over the world to maintain good assets and good earnings. 
Source: The Economic Times
INCOME SLOWDOWN
Due to the shutdowns and income slowdown, many 
repayments of loans may cease leaving the banks dry.
 What were earlier their assets now would become a big risk. 
Source: JHU HUB
RESPOND FROM GOVERNMENT
The government have responded by providing an economic 
stimulus package with several measures to shore up liquidity a
The regulators provide forbearance on several financial and 
compliance commitments. 
Source: The Economics Time
FINANCIAL INSTITUTION
Financial institutions have taken responsive measures to the 
pandemic and aim to reduce 
• in-person interactions
• downsize operations while providing financial support
Source: Bloomberg
STRESS TESTING
Due to the pandemic, financial institutions need to stress test 
their portfolios, for each of the defined scenarios, to better 
understand the impact. 
The current economic and market environment warrants 
additional stress testing that will have direct implications for 
decision making. 
Source: The NewYorker
STRESS TESTING
Due to the pandemic, financial institutions need to stress test 
their portfolios, for each of the defined scenarios, to better 
understand the impact. 
The current economic and market environment warrants 
additional stress testing that will have direct implications for 
decision making. 
Source: Council of Foreign Relation
CRISIS MANAGEMENT
This would be essential in developing a flexible contingency 
plan that best equips the banks for crisis management and 
provides supportive solutions to its customers.
Source: The hindu Business Line
CHALLENGES
The current challenges are likely to translate into high capital 
infusion requirements for the FIs to maintain both regulatory 
capital as well as growth capital.
The long-term implications of the pandemic for the Indian 
financial services sector is unknown, when normalcy returns, 
banks, and NBFCs will likely have learned a few lessons. 
Source: IMF blog