Webinar on-Challenges for the PSU Banks Post COVID-19
June 16, 2020
Resurgent India Knowledge Series Presents
Webinar on-"Challenges for the PSU Banks Post COVID-19”
Moderated by- Mr. K.K Gupta, Director- Resurgent India Limited
Speakers- Mr. T. Kesav Kumar, Deputy Managing Director- State Bank of India
Mr. Ashok Patnaik, General Manager-Indian Bank
The general outlook of bankers
- The crisis will not have a very severe impact on march 2020 financials. There may be some challenges related to provisioning. Most banks have cleaned up their balance sheets and are in a better position to meet the challenges. The challenge will not be handling NPA but avoiding NPA.
- The regulators and the banks are in constant touch through IBA & through individual consultations, various suggestions have been given which are currently being examined by the RBI. RBI will come up with clear announcements of the right moves at the right time.
- There will be an impact on SME sectors but it will depend on case to case basis. It is unknown how the balance sheets will be drawn up for worst-hit industries. The government will take appropriate measures based on the sectoral challenges faced. The whole intention would be to see that, that sector doesn’t go down.
- In today’s time, where there is limited information, working capital limits should be assessed using a cash flow budgeting system. Monitoring of the loans using GST returns and several other ways has improved than what it was earlier, this method appears to be more appropriate.
- Post lockdown the focus should be driven towards assessment and evaluation of each effect on different sectors and design developmental plans to support their revival.
- All the stakeholders of the economy namely manpower, MSME sectors, financial institutions, corporates, private investors, etc will have to come together to work on the common goal of building trust amongst each other and revive the country.
- It is a shared opinion of all the lenders and financial institutions, irrespective of public or private, that numerous efforts of organizing credit liquidity should flow to all the sectors. Everyone is working towards facilitating the quick, adequate, and timely flow of credit to all the customers.
- With respect to the statement made by the SBI chairman regarding the risk fund and guarantee, the banks should be given some risk-cum-remuneration for stepping in supporting the economy.
- Looking at the trying times, all the banks have enough cushion for genuine problems of the entrepreneurs which they are accommodating and corrective measures are being taken continuously.
- IBC is a new law, and its suspension in view of the current scenario will give NCLT enough time to clean up their backlog. Going forward, new measures will be introduced over a period of time. It will play an important role in financial institutions.
- Banks are not sector agnostic, they are risk agnostic. Lending is based on the risk emerging and the returns that are harvested.
- Bringing down interest rates alone cannot be pegged as the only way to attract foreign investors. It may have an impact on the industries to kick start the economy. While it may be a good indicator, it is not the sole indicator to examine.
- Bankers are doing everything in their capacity and ability to evaluate and assess each account for lending during such difficult times. They are attempting to make informed decisions as there is the cost for every response. The required need is that the credit goes to the deserving.
►Watch the webinar here: https://www.youtube.com/watch?v=ayWjaikBRcw&t=9s