(Title of project)

A project Submitted to
University of Mumbai for partial fulfillment of the degree of
Master in Commerce – Semester III
Under the Faculty of Commerce (Banking & Finance)
(Advanced Accountancy) (Business Management)
By
Name of the Learner
Roll No:
Under the Guidance of (Name of Mentor/Internal Examiner)

SIR SITARAM & LADY SHANTBAI PATKAR COLLEGE OF ARTS & SCIENCE
AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS (Autonomous)
S.V. ROAD, GOREGAON (WEST), MUMBAI-400104

(Black Book Cover)

2021-22

I|Page
 (Title of project)
A project Submitted to
University of Mumbai for partial fulfillment of the degree of
Master in Commerce – Semester III
Under the Faculty of Commerce (Banking & Finance)
(Advanced Accountancy) (Business Management)
By
Name of the Learner
Roll No:
Under the Guidance of (Name of Mentor/Internal Examiner)

SIR SITARAM & LADY SHANTBAI PATKAR COLLEGE OF ARTS & SCIENCE
AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS (Autonomous)
S.V. ROAD, GOREGAON (WEST), MUMBAI-400104

(Inside Page)

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 SIR SITARAM & LADY SHANTBAI PATKAR COLLEGE OF ARTS & SCIENCE
AND
V.P. VARDE COLLEGE OF COMMERCE & ECONOMICS (Autonomous)
S.V. ROAD, GOREGAON (WEST), MUMBAI-400104

CERTIFICATE
This is to certify that Kum./Kumari (Name of student) has worked and duly completed
his/her Project work for the degree of Master in Commerce under the Faculty of Commerce in
the subject of Banking & Finance/Advanced Accountancy /Business Management and his /her
project is entitled, “TITLE OF THE PROJECT” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no
part of it has been submitted previously for any Degree or Diploma of any University.

It is his/her own work and facts reported by his/her personal findings and investigations.

________________________ __ ___________________
(Mentor/Internal Examiner) (Dr. Shital Patil)
Coordinator
________________________ _____________________
(External Examiner) (Dr. Shrikant Sawant)
Principal
Date of submission:
(page 2)

I|Page
 DECLARATION BY LEARNER

I, Kum./Kumari (Name of student), here by, declare that the work embodied in this project
work titled “NAME OF THE PROJECT” forms my own contribution to the research work
carried out under the guidance of (Name of internal Guide) is a result of my own research work
and has not been previously submitted to any other University for any other Degree/Diploma to
this or any other University.

Where ever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented
in accordance with academic rules and ethical conduct.

_____________________

(Name and Signature of learner)

Roll No.:

______________________________

(Mentor/Internal Examiner)

(page 3)

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 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the completion
of this project.

I take this opportunity to thank the University of Mumbai for giving me a chance to do this project.

I would like to thank my Principal, Dr. Srikant Sawant, for providing the necessary facilities required for
completion of this project.

I take this opportunity to thank our Coordiantor, Dr. Shital N. Patil, for his moral support and guidance.

I would also like to express my sincere gratitude towards my project guide, (Name of Mentor/Internal
Examiner) whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and magazines related
to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the completion of
the project, especially my parents and Peers who supported me throughout my project.

_________________

(Name & Signature of the learner)

Roll No. ________

(page 4)

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 Index

Sr. no. Chapter Scheme Page No.

1 Title Page (Inside) II
2 Certificate III
3 Declaration by Learner IV
4 Acknowledgement V
5 Index of contents & Tables VI
6 Abstract/Summary
7 Chapter 1: Introduction
1.1. Introduction
1.2.Problem on hand
1.3. Historical background
1.4. Profile of the study area
1.5.Conceptual framework
8 Chapter 2: Review of literatures

9 Chapter 3:.Research Methodology

3.1.Objectives of the study
3.2 Hypothesis
3.3 Scope of the study
3.4 Limitations of the study
3.5 Significance of the study
3.6 Selection of the problem,
3.7 Sample Size
3.8 Collection of Data
3.9 Tabulation of Data
3.10 Techniques used for data collection and
analysis

10 Chapter 4: Data Analysis, Interpretation and

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 Presentation
4.1.Analysis of data with tabular and graphical
presentation
4.2 Interpretation of data
11 Chapter 5: Conclusions and Suggestions
4.1.Summary & Conclusion
4.2.Recommendations
4.3.Future Scope
4.4.Limitations
12 Bibliography

List of tables, if any, with page numbers

List of graphs, if any, with page numbers
List of appendix, if any, with page numbers
Abbreviations used, if any, should be given at bottom of relevant page.

NOTE:1) Font type: Times New Roman, Font size: 12 for content and 14 for title,
2) Line space: 1.5 for content
3) Paper size: A4, Margin: in left – 1.5, Up-down & right- 1.
4) The project report should be of about 50 to 80 pages
5) Two hard bound copies (Black Books) should be submitted.
6) Your data shall be primary & secondary in nature
7) Field visit may be conducted which will strengthen the project

V|Page
 CHAPTER:1

Introduction:

Indian Banking Sector :

The Banking system of a country is an important pillar holding up the financial system of the country’s
economy. The major role of banks in a financial system is the mobilization of deposits and disbursement of
credit to various sectors of the economy. The existing, elaborate banking structure of India has evolved over
several decades.

In This Article:

 • Structure of the Indian Banking System

 • Scheduled, Non-Scheduled Banks and Development Banks
 • Commercial Banks
 • Cooperative Banks
 • Development Banks
 • Conclusion

Structure of the Indian Banking System

Reserve Bank of India is the central bank of the country and regulates the banking system of India. The
structure of the banking system of India can be broadly divided into scheduled banks, non-scheduled banks and
development banks.
Banks that are included in the second schedule of the Reserve Bank of India Act, 1934 are considered to be
scheduled banks. 
All scheduled banks enjoy the following facilities:
 Such a bank becomes eligible for debts/loans on bank rate from the RBI
 Such a bank automatically acquires the membership of a clearing house.
All banks which are not included in the second section of the Reserve Bank of India Act, 1934 are Non-
scheduled Banks. They are not eligible to borrow from the RBI for normal banking purposes except for
emergencies.
Scheduled banks are further divided into commercial and cooperative banks.

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 Bank is an institution that has the primary function of depositing and lending money to needy individuals
, businesses and governments. Banks around the world are considered trustworthy.

When a person deposits money in a Bank, it does not mean to the Banks what the amount is. The person knows
that the money is safe with the bank. The Bank provides many facilities to customers such as providing loans,
debit cards and credit cards measures to generate demand and ease the liquidity by ensuring public sector banks
lend further to NBFCs, introducing partial credit guarantee scheme, organizing loan mela etc. prominent
position in India’s economy and contribute to employment in India. Unfortunately of Banks has deteriorated.

The condition of Public Sector Banks has deteriorated. facilities. Indian Banking industry which is almost
200years old. Since the beginning of the reforms in 1991, it has been expanded and modernized.( KPMG 2017 )
as certain that the Banking sector is poised to become the fifth largest banking industry in the world in the year
2020 and will be the third largest by 2025. There are currently 34 Banks in India, out of which 12 are Public
sector Banks. 14 Banks were nationalized in 1969 and 6 Banks were nationalized in 1980. The Reserve Bank of
India announced in August 2019 that banks can have an exposure of up to 20 per cent of their Tier 1 capital to a
single NBFC. This limit was 15 per cent earlier. This helped boost credit flow as bank funding to NBFCs grew
by 30 per cent year on year. The Government has taken a series of measures to generate demand and ease the
liquidity by ensuring public sector banks lend further to NBFCs, introducing partial credit guarantee scheme,
organizing loan mela etc. Modern banking in India originated in the last decade of the 18th century.
Among the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in
1829–32; and the General Bank of India, established in 1786 but failed in 1791.[1][2][3][4]

The largest and the oldest bank which is still in existence is the State Bank of India (SBI). It originated
and started working as the Bank of Calcutta in mid-June 1806. In 1809, it was renamed as the Bank of
Bengal. This was one of the three banks founded by a presidency government, the other two were
the Bank of Bombay in 1840 and the Bank of Madras in 1843. The three banks were merged in 1921 to
form the Imperial Bank of India, which upon India's independence, became the State Bank of India in
1955. For many years, the presidency banks had acted as quasi-central banks, as did their successors,
until the Reserve Bank of India[5] was established in 1935, under the Reserve Bank of India Act, 1934.[6]
[7]

X|Page
In 1960, the State Banks of India was given control of eight state-associated banks under the State
Bank of India (Subsidiary Banks) Act, 1959. These are now called its associate banks.[6] In 1969,
the Government of India nationalized 14 major private banks; one of the big banks was Bank of India. In
1980, 6 more private banks were nationalised.[8] These nationalised banks are the majority of lenders
in the Indian economy. They dominate the banking sector because of their large size and widespread
networks.[9]
The Indian banking sector is broadly classified into scheduled and non-scheduled banks. The
scheduled banks are those included under the 2nd Schedule of the Reserve Bank of India Act, 1934.
The scheduled banks are further classified into: nationalised banks; State Bank of India and its
associates; Regional Rural Banks (RRBs); foreign banks; and other Indian private sector banks.[7] The
SBI has merged its Associate banks into itself to create the largest Bank in India on 1 April 2017. With
this merger SBI has a global ranking of 236 on Fortune 500 index. The term commercial banks refers
to both scheduled and non-scheduled commercial banks regulated under the Banking Regulation Act,
1949.[10]
Generally the supply, product range and reach of banking in India is fairly mature-even though reach
in rural India and to the poor still remains a challenge. The government has developed initiatives to
address this through the State Bank of India expanding its branch network and through the National
Bank for Agriculture and Rural Development (NABARD) with facilities like microfinance. The Banking
system of a country is an important pillar holding up the financial system of the country’s economy. The major
role of banks in a financial system is the mobilization of deposits and disbursement of credit to various sectors
of the economy. The existing, elaborate banking structure of India has evolved over several decades.

In This Article:

 • Structure of the Indian Banking System

 • Scheduled, Non-Scheduled Banks and Development Banks
 • Commercial Banks
 • Cooperative Banks
 • Development Banks
 • Conclusion

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Structure of the Indian Banking System

Reserve Bank of India is the central bank of the country and regulates the banking system of India. The
structure of the banking system of India can be broadly divided into scheduled banks, non-scheduled banks and
development banks.
Banks that are included in the second schedule of the Reserve Bank of India Act, 1934 are considered to be
scheduled banks. 
All scheduled banks enjoy the following facilities:
 Such a bank becomes eligible for debts/loans on bank rate from the RBI
 Such a bank automatically acquires the membership of a clearing house.
All banks which are not included in the second section of the Reserve Bank of India Act, 1934 are Non-
scheduled Banks. They are not eligible to borrow from the RBI for normal banking purposes except for
emergencies.
Scheduled banks are further divided into commercial and cooperative banks.

Scheduled, Non-Scheduled Banks and Development Banks

Commercial Banks

The institutions that accept deposits from the general public and advance loans with the purpose of earning
profits are known as Commercial Banks.
Commercial banks can be broadly divided into public sector, private sector, foreign banks and RRBs.

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   In Public Sector Banks the majority stake is held by the government. After the recent amalgamation of
smaller banks with larger banks, there are 12 public sector banks in India as of now. An example of
Public Sector Bank is State Bank of India.
 Private Sector Banks are banks where the major stakes in the equity are owned by private stakeholders
or business houses. A few major private sector banks in India are HDFC Bank, Kotak Mahindra Bank,
ICICI Bank etc.
 A Foreign Bank is a bank that has its headquarters outside the country but runs its offices as a private
entity at any other location outside the country. Such banks are under an obligation to operate under the
regulations provided by the central bank of the country as well as the rule prescribed by the parent
organization located outside India. An example of Foreign Bank in India is Citi Bank.
  Regional Rural Banks were established under the Regional Rural Banks Ordinance, 1975 with the aim
of ensuring sufficient institutional credit for agriculture and other rural sectors. The area of operation of
RRBs is limited to the area notified by the Government. RRBs are owned jointly by the Government of
India, the State Government and Sponsor Banks. An example of RRB in India is Arunachal Pradesh
Rural Bank.

Cooperative Banks

A Cooperative Bank is a financial entity that belongs to its members, who are also the owners as well as the
customers of their bank. They provide their members with numerous banking and financial services.
Cooperative banks are the primary supporters of agricultural activities, some small-scale industries and self-
employed workers. An example of a Cooperative Bank in India is Mehsana Urban Co-operative Bank.
At the ground level, individuals come together to form a Credit Co-operative Society. The individuals in the
society include an association of borrowers and non-borrowers residing in a particular locality and taking
interest in the business affairs of one another. As membership is practically open to all inhabitants of a locality,
people of different status are brought together into the common organization. All the societies in an area come
together to form a Central Co-operative Banks.
Cooperative banks are further divided into two categories - urban and rural.
 Rural cooperative Banks are either short-term or long-term.
o Short-term cooperative banks can be subdivided into State Co-operative Banks, District Central
Co-operative Banks, Primary Agricultural Credit Societies.
o Long-term banks are either State Cooperative Agriculture and Rural Development Banks
(SCARDBs) or Primary Cooperative Agriculture and Rural Development Banks (PCARDBs).

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  Urban Co-operative Banks (UCBs) refer to primary cooperative banks located in urban and semi-urban
areas.

Development Banks

Financial institutions that provide long-term credit in order to support capital-intensive investments spread over
a long period and yielding low rates of return with considerable social benefits are known as Development
Banks. The major development banks in India are; Industrial Finance Corporation of India (IFCI Ltd), 1948,
Industrial Development Bank of India' (IDBI) 1964, Export-Import Banks of India (EXIM) 1982, Small
Industries Development Bank Of India (SIDBI) 1989, National Bank for Agriculture and Rural Development
(NABARD) 1982.

The banking system of a country has the capability to heavily influence the development of a country’s
economy. It is also instrumental in the development of rural and suburban regions of a country as it provides
capital for small businesses and helps them to grow their business. The organized financial system comprises
Commercial Banks, Regional Rural Banks (RRBs), Urban Co-operative Banks (UCBs), Primary Agricultural
Credit Societies (PACS) etc. caters to the financial service requirement of the people. The initiatives taken by
the Reserve Bank and the Government of India in order to promote financial inclusion have considerably
improved the access to the formal financial institutions. Thus, the banking system of a country is very
significant not only for economic growth but also for promoting economic equality.

Characteristics of Banking Sectors:

Banking System of a country contributes a great deal in the process of its economic development. It
therefore becomes essential that a country has a good banking system. Following are the characteristic features
of a good banking system:

1. Conducive to Country’s Economic Conditions:

Banking system of a country should be conducive to its economic conditions. Indian economy is an
underdeveloped agricultural economy.

It needs a banking system that identifies various sources of credit and generates suitable credit facilities for
agricultural and related sectors of the economy.

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2. Sound Financial Basis:
A good banking system should have sound financial basis. It should generate public faith for which it should be
mandatory for the banks to obtain license from the Govt. Banks should have enough of minimum reserves to
retain their credibility. Also, credit- related risks should be minimized.

3. Mobilisation of Savings:
A good banking system should facilitate mobilization of savings. People should be encouraged to save more
and assured of suitable investment prospects.

4. Controlled Credit:
A good banking system underlines the importance of controlled credit. Flow of credit is so channelized that it
conforms to the development needs of the nation. Central bank of the country should have quantitative as well
as qualitative control over the flow of credit.

5. Uniformity of Policies:
A good banking system should exhibit uniformity of policies. If dear- money policy is needed during periods of
inflation, it must be uniformly adopted across all sectors of the economy. In case of finance-crunch, the whole
banking system of the nation should adhere to the required monetary discipline. There should be no loopholes in
the system. Monetary System should be conducive to growth programmes of the nation.

6. A Co-ordinated System:
A good banking system should be a well co-ordinated system of banking. There can be diverse categories of
banking institutions in the country, but all should be complementary to each other in conformity with the overall
programmes of growth and development.

There should only be a healthy competition across different banking institutions that only promote the
efficiency and productivity of the Banking System as a whole. Thus, a fairly high degree of complementarily is
expected across industrial banks, rural development banks, Mutual Fund, Financial Institutions and other
financial intermediaries. The whole structure of financial intermediaries should efficiently cater to diverse
financial needs of various sectors of the economy.

7. Trained and Progressive Administration:

Trained and progressive administration is yet another characteristic of a good banking system. Administrative
set of the banking structure must conform to the standard norms of efficiency and productivity. And these
norms of efficiency should not only yield high profitability but also ensure efficient consumer service.:

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Central Bank of the country and the Government should have fair degree of control over the banking system
with a view to ensuring progressive banking administration.

8. Modernization:
A good banking system should be exposed to modernisation with a view to stimulating dynamism in its
functioning. It must be integrated with the banking system of developed nations as a part of overall
globalization of diverse economic structures in different countries of the world.

In short, a good banking system should be friendly to overall programmes of growth and development of a
nation and should be modern as well as flexible to function as an integrated unit of the global financial market
structure.

COVID-19: Impact on Banking Sector

In today’s era, as everyone knows that to defeat a pandemic like covid-19,the Indian government
announced complete lockout in the country from 24 march 2020 and was then extended to 3 may 2020
by the Indian government. The Indian government needs to lockout so that the lives of the people of the
country can be saved. This is going to severely affect various sectors of our country. Banking is the
backbone of the Indian economy. This article is an attempt to assess the causal impact of an pandemic
like covid-19 on banks due to lockdown. As a result , all commercial organizations, educational
institutions and public and private sector offices have been closed. The article has indicated a very
serious impact of the lockdown on banks in the event of moving beyond July 2020. The economic
impact of the COVID-19 pandemic in India has been largely disruptive. India's growth in the fourth
quarter of the fiscal year 2020 went down to 3.1% according to the Ministry of Statistics. The Chief
Economic Adviser to the Government of India said that this drop is mainly due to the coronavirus
pandemic effect on the Indian economy. Notably India had also been witnessing a pre-pandemic
slowdown, and according to the World Bank, the current pandemic has "magnified pre-existing risks to
India's economic outlook".

Key words : COVID-19, Indian Economy , Indian Banks,NPA , Lockdown

Covid-19 : COVID-19 affects different people in different ways. Most infected people will develop mild
to moderate illness and recover without hospitalization.

Most common symptoms:

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 fever dry cough
tiredness

Less common symptoms:

aches and pains

sore throat diarrhea conjunctivitis headache loss of taste

or smell a rash on skin, or dis colorations of fingers or
toes.

Problem Statement : The rapid spread of epidemics such as covid-19 has led to a steep decline in key
indices, indicating a significant impact on its impact and GDP growth.

The first news of the outbreak of novel corona virus came from Wuhan city of China on 31 December
2019. This corona virus is a new virus that has not yet been identified in humans. The literature indicates
that the corona virus is a very large family of viruses. Its spreading speed is very fast . this corona virus
can cause anything from the common cold to the more severe autism syndrome. To prevent this from
spreading across the country, the Indian government announced a lockout on 24 march 2020. extended to
3 may 2020. Many actions taken by many governments around the world, WHO praised the timely
action by Indian Prime Minister Narendra Modi and many people as a lockdown, because of the cure of
the disease or in the absence of vaccine to prevent the virus from spreading was the best option. By the
way , various institutions like IMF and World Bank,Central Banks economists, fund managers and
consulting firms from different countries have expressed their fears about the devastating effect of
lockdown in GDP world especially in general and emerging economics like India.

On 14 April, the IMF released its global growth projections. It was revealed that the great depression was
likely to occur after the great depression in the 1930s, which could be better than global financial
organizations. The economic impact of the COVID-19 pandemic in India has been largely disruptive.
India's growth in the fourth quarter of the fiscal year 2020 went down to 3.1% according to the Ministry
of Statistics. The Chief Economic Adviser to the Government of India said that this drop is mainly due to
the coronavirus pandemic effect on the Indian economy. Notably India had also been witnessing a pre-
pandemic slowdown, and according to the World Bank, the current pandemic has "magnified pre-existing
risks to India's economic outlook". Banks in the country are likely to witness a spike in their non-
performing assets ratio by 1.9 per cent and credit cost ratios by 130 basis point in 2020, following
the economic slowdown on account of COVID-19 crisis, says a report. In its report titled "For Asia-

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 Pacific Banks, COVID-19 Crisis Could Add USD 300 Billion To Credit Costs" S&P Global Ratings
said, it expects the non-performing assets (NPA) ratio for the Chinese banking sector to increase by about
2 per cent in 2020, and credit losses, to increase by about 100 basis points.

Non Performing Assets :

A non- performing assets is an assets that is used by financial institutions for loans and advances on
which the principal amount is outstanding and on which no interest is paid for a period of time. Loans are
become to non-performing assets when they are outstanding for 90 days or more.

The loan is outstanding when principal or interest payments are late or missed. On India, the report said "the
NPA ratio in India is likely to fare similarly to China's (1.9 per cent 2 per cent) but the credit costs ratios could
be worse, increasing by about 130 basis points," the rating agency's credit analyst Gavin Gunning said in the
report. Gunning said there are concerns that the coronavirus will spread faster, further, and for longer.

"This will deepen the economic pain we already anticipate for 2020. Financing conditions
may likewise sour as investors become more risk averse. This would hit bank credit," he
said. The report noted that an additional USD 300 billion spike in lenders' credit costs
and a USD 600 billion increase in (NPAs) will occur in 2020 due to the adverse impact of
coronavirus pandemic.

While banks are not as exposed as the corporate sector during the initial stage of the
pandemic, the strain on lenders could ultimately be profound. Banks face a second-order
hit compared with the corporate and household sectors. The report said the economic
storm created by COVID-19 will test the ratings resilience of the region's 20 banking
sectors.

"The resilience of banks' asset quality in 2020 hinges in part on the success of

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governments' and regulators' policy responses. These measures are in early stages. Some
have started, some are in planning, and we suspect many more may be in the wings,"
Gunning said.

Asia-Pacific governments, central banks, and supervisory authorities have rolled out
diverse measures to address COVID-19. These include liquidity injections, targeted loans
to affected industries and regions, and policy rate cuts. It also includes support for banks
to provide forbearance to otherwise economically viable households and businesses
sideswiped by COVID-19.

The RBI in its seventh bi-monthly monetary policy announced on March 27, reduced the
repo rate by 75 basis points to 4.40 per cent. It announced to provide Rs 3.74 lakh crore
liquidity to banks through reduction in cash reserve ratio, by conducting targeted long
term repos operations (TLTRO) and by increasing the limit for marginal standing facility
(MSF) to 3 per cent.

RBI also allowed a repayment moratorium for three months on all term loans outstanding
as on March 1, 2020, to borrowers of all commercial banks, including regional rural
banks, small finance banks and local area banks, co-operative banks, and NBFCs,
including housing finance companies and micro-finance institutions.

"The equation underpinning policy responses is simple in theory but difficult in practice, and always
comes at a significant fiscal cost," Gunning noted.Covid-19 is a tremendous tragedy from both a health
and economic perspective, affecting all in its path.

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 The pandemic may not only change our perspective on life, our priorities and the way we work and
interact…, it may also change the way we bank in the future.

Financial institutions were heavily affected by the 2008 credit crisis and today, after investing a decade in
digital transformation, they can play a key role during this challenging period by curtailing the economic
recession and supporting their customers, especially SMEs.

Since early this year, the banking industry has been faced with unprecedented challenges. The way banks
address these challenges will determine their role in, and contribution to, mitigating the effects of the current
crisis.
Challenges faced by the Banking Sector :

Credit Risk

There has been a noticeable surge in loan and debt restructuring requests during this period, particularly from
SMEs. Banks will need to rethink their approach to credit risk and credit scoring in order to adapt to the context
of the current situation and provide unprecedented levels of liquidity to the market. In parallel, regulators will
also need to relax some of the credit risk directives, at least in the short/mid-term.

Digital Banking
Many customers who were reluctant to engage digitally with their banks, have been “forced” to do it during
quarantine. As a result, banks have tripled their digital interactions with customers during this period. The main
challenge now is to ensure that they can provide customers with all of the basic services digitally, end-to-end
(On boarding, lending etc.), which was not the case for many financial institutions pre-covid 19.

Cyber Threats

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Financial institutions are facing a potential increase in cyber-attacks and fraud attempts due to the growth of
digital banking interactions which is compounded due to employees working remotely from home/less secure
environments. Cyber and Fraud, albeit a key focus for the banking industry, will no doubt take centre stage.
Business Continuity
Banks have been compelled to adapt quickly during this pandemic, both internally and vis-à-vis their customers.
Banks that heavily invested in digital transformation over recent years are now reaping the benefits and seeing
the results of their investment. Despite cyber threats and a significant increase in digital interactions, keeping
their systems stable and reliable is a key focus of banks.

Crisis Management
Uncertainty and constant evolution require banks to make fast decisions and adapt quickly.
The way of working and interacting with customers and colleagues is changing…and banks need to be
particularly agile in order to keep up and adapt to the “new normal”.
In addition to adapting, in a record time, to the current situation, banks will undoubtedly face further challenges;
they will need to prepare for and minimise effects of the upcoming post-covid-19 economic recession.

Innovation: From “nice to have” to “must have”

Before the crisis some stakeholders within the banking industry still thought that innovation was a nice thing to
have, but not a necessity. Covid-19 may be one of, if not, the strongest of catalysts for digital transformation in
the banking industry since the internet revolution. I am convinced that from now on, innovation will be
perceived as a “must have” across all financial services organizations and the previous skepticism surrounding
innovation and digital transformation investments will diminish. The focus will, at least in the short and mid-
term, be on delivering end to end digital services rather than exploring cutting edge technologies for future use.
As is the case with most crises, while the current situation brings multiple challenges to the forefront, as
described above, it also brings with it many opportunities for banks.

10 decisions taken by RBI to counter the corona virus impact on economy

The Reserve Bank of India asked all lending institutions to allow three month moratorium on EMI
payments in order to infuse liquidity into the system amid novel corona virus crisis. RBI governor

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Shaktikanta Das in a press conference said these are extraordinary circumstances , and unprecedented
measures are required to support the sagging economy as all the economic activities have come to a halt.

1. Repo Rate - RBI announced that it was cutting the Repo rate by 75 bps, or 0.75% to 4.4. the
Repo rate was earlier 5.15;last being cut in October 2019.

2. Reverse Repo- The regulator also announced that it would cut the reverse repo rate by 90 bps,
or 0.90%. on a daily average , banks had been parking Rs 3 lakh crore with the RBI. The current reverse
repo rate was 4 %.

3. Loan Moratorium - In a massive relief for the middle class, the RBI Governor also announced
that lenders could give a moratorium of 3 months on term loans, outstanding as on 1 march , 2020. This
is applicable to all commercial banks including regional , rural, small finance, co-op bank, all India
financial institutions and NBFCs including housing finance and microfinance.

4. CRR- The RBI also announced that the cash reserve ratio would be reduced by 100 bps, or 1% ,
to 3%. This would be applicable from March 23, and would inject Rs.137,000crore.

5. LTRO -The RBI will also undertake long term Repo operations; allowing further liquidity with
the banks. The banks however are specified that this liquidity will be deployed in commercial papers,
investment grade corporate bonds and non -convertible debentures.

6. Ease of working Capital financing- Lenders were allowed lending to recalculate drawing
power by reducing margins and / or by reassessing the working capital cycle for the borrowers. The RBI
also specified that such a move would not result in asset classification downgrade.

7. Working capital interest -A three month interest moratorium shall also be permitted to all
lending institutions.

8. Deferment capital interest- The net stable funding ratio, which reduces funding risk by
requiring banks to fund their activities with sufficiently stable sources of funding was postponed to
October 1, 2020. The NSFR was earlier supposed to be implemented by April 1, 2020.

9. MSF- Marginal standing facility has also been increased to 3 % of SLR, available till June
30,2020. This measure should provide comfort to the banking system by allowing it to avail an
additional 137000 crore of liquidity under the LAF window in times of stress at the reduced said the
RBI.

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10. Fresh Liquidity - The impact of all the announcements today shall inject almost 3.2% of GDP,
the Governor said in his brief today. The RBI also added that since February 2020 it had injected Rs 2.8
lakh crore of liquidity , equivalent to 1.4 percent of GDP.

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 CHAPTER:2:

Opportunities for the Banking Industry

Post Covid-19 Digital Customers

During the current crisis, many customers have been engaging digitally with their banks… for some of them,
for the first time. There is a huge opportunity for banks to retain these digital customers beyond the crisis,
especially SMEs and Retail. The level of the services provided by banks today will determine the percentage of
customers that will not revert back to the traditional physical channels when things eventually get back to
normal.

Rethinking Cost Reduction Strategy

Many organizations realize that working from home can, in some cases, be more productive and therefore
financial institutions are considering the possibility of keeping a significant chunk of their workforce working
from home permanently, even after the crisis has subsided. This will create a win-win situation; increasing
employee engagement, satisfaction and work-life balance on the one hand while bringing significant cost
savings to banks on the other hand.
Only time will tell to what extent the financial industry’s actions have contributed to overcoming current and
future challenges associated with covid-19. For now, banks are demonstrating their ability to respond by
providing unprecedented levels of liquidity, adapting their organizations to support customers and employees in
record time and taking an active role from a socially responsible perspective.

CHAPTER:3

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 CHAPTER:4

CHAPTER:5

Bibliography

REFERENCES: (Sample model)

Books:
1. Patnaik V.C & Manaj Patnaik, (2008)“Profitability in Public Sector Banks”, Sonali
Publications, New Delhi, ISBN: 145679087
2. Suryachandra Rao.D, (2010)“Banking Reforms in India: An evaluate study of
performance of Commercial Banks” Regal Publications, New Delhi New
3.Ravi Kumar V.V. (2010),Trends in Banking, Indian Institute of Banking & Finance, ISBN:
78564321
4. Romeo S. Mascarenhas (2011) ,Innovations in Banking & Insurance, Seth Publications,ISBN: 78953242
5. Gordon & Natrajan(2005), Financial Service Management , Tata McGraw– ISBN: 87690432

Journals:
1.Biresh K Sahoo and Anandadeep Mandal (2011)- Examining the Performance of

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 Banks in India: Post Transition Period, The IUP Journal of Bank
Management, Vol. X, issue 2, pages 7-31, ISSN:9076323
2.Dr. Ashok Khurana, Kanika Goyal (2011)- Performance of Public Sector Banks: An
Analysis IJBEMR Volume 2, Issue 2, ISSN: 453189766
3.Dr. N. Bharathi (2010), “Profitability Performance of New Private Sector
Banks-An Empirical Study”, Indian Journal of Finance, Vol. 4, No.3, pp. 16-24., ISSN:9876098
4.Jyoti Saluja and Dr. Rajinder Kaur (2010), “Profitability Performance of Public
Sector Banks In India”, Indian Journal of Finance, Vol. 4, No.4, pp. 17-25., ISSN:54378965

Websites:
www.rbi.org.
www.bseindia.com
www.iifb.com
www.ubi.com
www.axisbank.com
www.banknetindia.com

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