4 IMPACTS ON BFSI SECTOR DURING COVID

Table 3 Impacting Factors of BFSI Sector

Impacting Factor Meaning Impacting Level of Impact

Factor Sector
EMI & Usage of Due to the recent job losses and low salary, Banking Sector Moderate (Negative)
Moratorium many people have resorted to the moratorium
option offered by banks.
Fund Recovery Loan EMI Collection from the customer has Banking and Moderate-High
from Defaulters poorly impacted both in the banking and Financial Service (Negative)
nonbanking sector.  Sector
Impact on In case of personal loans no guarantee for Financial Service High (Negative)
Personal Loan recovery exists, which is risky for the banks. Sector
Thereby the rate of interest has been
increased for personal loans.
Branch Closure Due to the low number of employees, some Banking Sector Moderate (Negative)
of the branches have closed, thereby
affecting the operations and low revenue. 
Impact on Salary Many private-sector financial institutions Financial Service High (Negative)
have reduced the salary to a certain level Sector
based on the position and package.

Credit Reliability
COVID-19 resulted in closure of offices and Banking, Financial High (Negative)
industries, leading to doubt the Customers Service and
credit reliability Insurance Sector
Insurance In the BFSI sector, Insurance is the only Insurance Sector High (Positive)
sector which is affected positively by gaining
profits and attracting more customers during
this COVID-19 situation. 
Vendor Service Due to COVID-19 uncertainty, the Banking and Moderate (Negative)
outsourcing vendors are not able to provide Financial Service
the services.  Sector
Increased Cyber There are so many thieves in the internet Banking and Moderate-High
Crimes world to send SMS or emails to the Financial Service (Negative)
customers. During Covid, this misuse rate Sector
increased significantly.

Less Profitability COVID-19 situation indicates the low Banking, Financial High – Negative
profitability for the financial sector based on Service and impact on Banking
the Return on Assets (RoA) ratio.  Insurance Sector and Financial Service
Sector
Moderate – negative
impact on Insurance
Sector
People’s The Citizens of India affected by Financial Service Moderate – High
hesitation on employment and revenue. Even the people Sector (Negative)
Financial who are not affected financially are
Products hesitating or scared to go for any further
investments .