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Retail Banking in India - Coronavirus (COVID-19) Sector Impact

July 2020 | 18 pages | ID: RD161EACB25FEN

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Retail Banking in India - Coronavirus (COVID-19) Sector Impact


The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.
Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with most of the countries across the world registering contractions in their economic growth for the year to date. Many economists and institutions have cut their forecasts, with many experts predicting the onset of long-term recessionary environments.
A similar trend has been seen in India, with economic growth declining in the first quarter of 2020, which will decelerate further if the disease is not controlled. The decline will have an adverse impact on all sectors, including banking and payments. While the government is easing restrictions in a calibrated manner, the surge in daily active case numbers is a worrisome factor. The country is seeing a spike in new cases across several states, which remains a key challenge going forward. India now has the third-highest number of total COVID-19 cases in the world (behind the US and Brazil).
This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in India. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat Coronavirus.

  • Indian banks face pressure to increase their earnings and asset quality as a result of uncertainty surrounding the severity and duration of the pandemic, as well as the associated effects on Indian banks due to restrictions on economic activity.
  • A drop in interest rates has been unsuccessful in boosting banks’ net interest margins as widespread retrenchment has adversely affected the repayment abilities of households.
  • Fee income will fall, driven by decreased retail spending, while non-performing loan ratios will increase - particularly across SMEs. However, support measures should alleviate some of the asset-quality pressure that will emerge from this downturn.
  • This will work in the short term and hold down the impaired loan ratio for the first half of 2020, but pressure will be on lenders in the months ahead.
  • Make strategic decisions using top-level revised forecast data on the Indian retail lending and deposit industry.
  • Understand the key market trends, challenges, and opportunities in the Indian retail lending and deposit industry.
  • Receive a comprehensive insight into the total consumer loans in India, including mortgages, personal and credit card loans as well as retail deposits balances.
COVID-19 Update
Impact Assessment
Retail Deposits
Total Consumer Loans
Mortgage Loans
Credit Card Loans
Other Consumer Loans
Job Analysis
Supplementary Data
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