Assignment of Operation

Management in Bank
On
How has COVID-19 impacted operations of banks?

Submitted To:
Sir Omair Majeed Bucha

Submitted By:
Group Members
Atia Khalid BBFE-17-32
Kiran Zulfiqar BBFE-17-14
Rabia Anum BBFE-17-17
Ahsan Abbas BBFE-17-36
Usama Nadeem BBFE-17-43
Abdul Rehman BBFE-17-40

BBA (IBF)

7th semester (evening)

Session: 2017-2021

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Impact of COVID-19 on Operation of Banks
Banking is a business where deposits are converted into loan and investment. The difference of
interest rates is main source of earnings for the banks.
Banks certainly have their hands full in light of the novel coronavirus outbreak (COVID-19).
Borrowers and businesses face job losses, slowed sales, and declining profits as the virus
continues to spread around the world. Banking customers are likely to start seeking financial
relief, and federal bank regulators in the U.S. are encouraging banks to help them.

Reasons
Points that effect the operations of banks are described in the following

 COVID-19 pandemic crisis will also be a test to banks running digital transformation
programs as digital interactions become the primary option for client. The high demand
of digital assets will be a challenge for banks. Banks must keep offering services and
products to stay alive, without branches this will be a big challenge.
 Government agencies banks are understanding the current trends due to the corona virus
situation and hence are making many positive efforts behind it banks are testing their
online systems to check whether they are ready to deal with the influx of digital banking
demands all groups are evidently facing cash flow crunch that is threatens the economic
and financial stability.
 During lockdown the demand for credit is continuously going down. The reason is that
how business man will pay interest to the bank when he is unable to sell his goods. The
banks non-performing asset will be high and profit margin will be low because the money
is not rotating at the business and the borrowers will not be able to repay their loan
liabilities.
 Banks normally plays the role to ensure the facility of availability of the funds without
threatening their own liquidity position in this situation they have to make sure that
enough funds are available to the customers when they demand.

Suggestions
To minimize the risk of COVID-19 spread and avoid from person to person interactions banks
provide the services to their customers to drop their cheques into drop boxes which installed in
branches ATM rooms.

 This boxes can be used with in and after the business hours.
 Customer can drop their mentioned transactions cheques without any hassle of waiting in
row.
 No person to person interactions.
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Steps to be taken in this Pandemic for Banking.
Credit Management

 Prepare for losses

 Extend credit
 Digitize to manage the demand for refinancing

Revenue Compression

 Lower net interest margins

 A drop in payments revenue
 A decline in trade finance and cross-border payments

Customer Service and Advice Provision

 Educate and train customers

 Minimize physical infection risks
 Personalize advice to consumers

Operating Model Adjustments, Cost Control and Innovation

 Carefully consider the tasks of the ‘war room’

 Review project expenditures
 Be flexible with vendors and suppliers

Example
For example, the World Health Organization (WHO) has advised people to use contactless
payments and avoid from dealing with banknotes as much as possible. That is on the grounds
that the Covid may keep on living on banknotes for quite a long time, accelerating spread of the
disease.
The Bank of Korea has started to isolate bills starting from neighborhood banks, keeping them
secluded for as long as about fourteen days. Moreover, the Chinese government mentioned loan
specialists to sterilize physical notes and spot them in isolate. The U.S. Central bank has founded
a training to isolate banknotes from Asia for seven to ten days.
Obviously, it's not simply paper cash that is progressively being seen and treated as a potential
Covid transporter. Banks, buyers, and governments are gauging the dangers of in-person
banking, and choosing advanced channels when they have the decision.

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