Corona Effect: Tough Days Ahead for Indian Banks

There is no sector in the country which is left unaffected by the Coronavirus Pandemic. The government of India already indicated the things to come by cutting the salaries of the lawmakers. Banking Segment may be carrying this impact for a long time.

With the economic growth likely to be very slow, this may lead to a surge in bad loans and would lead to Non-Performing Assets (NPAs). The Government of India may need to make a provision of at least 200-250 billion rupees ($5.90 billion) for capital infusion to save the state-run banks.

Already there is trouble in the Indian Banking system with one Private Bank almost collapsed. Indian banks are already burdened with a bad loan pile of nearly $140 billion and the lion’s share of it rests with the state-owned banks. Banks would also likey to burden their customers by increasing their Rate of Interests on their Loans.

At the time of writing this article, as per the Ministry of Health and Family Welfare, the total number of cases in India stands at 4,067 with over 100 deaths‬. Unofficial sources say that the total number of cases will be around 4,400.