COVID-19: Challenges and Avenues of the Banking System

Abstract

COVID-19 has changed the entire scenario of the world in all aspects. The financial system is also a part that affected in the changed frame. Generally banking sector plays an inevitable role in the country’s economic development. Due to the announcement of lockdown, all non-essential public and private services, businesses, including retail and micro firms, schools and colleges, religious places across the world, stayed closing during this period and total regular transportation system stopped. The situation, which is caused due to pandemic, has affected the total monetary system very badly and showed its impact on the banking sector. In this period, lower income levels led to decreased production and increased unemployment conditions. The banks faced several challenges, such as increase in non-performing assets, reduced income, no funds in the form of deposits, etc. But at the same time, this situation opened doors to certain new avenues for improving the income earning capacity by using electronic mode and others. This paper is aimed at identifying the challenges faced and various new opportunities available in front of the banking field.