BBA (SERVICE INDUSTRY

MANAGEMENT)
Lecture 4 - SEMESTER 3
‘Impact of
COVID-19 on INTRODUCTION TO SERVICE INDUSTRY
service industry’ BBASM 303-18

Faculty In charge: Ms. Shagun Smith

shagun.cgc@gmail.com
TOPIC TO BE COVERED IN THIS
LECTURE
 Detailed discussion on changed scenario of
Service sector in COVID-19 times
 BFSI (Banking, Financial Services and Insurance)
BANKING
 IMPACT
Credit Risk Assessment
 Banks may be additional disclosures required in
the financial statements and the computation of
capital adequacy for COVID-19
 Work on risk management functions and track
their borrowers individually to determine and
segregate the permanent impact from the
temporary impact
 to pay principal and interest with relaxation on
their classification as a non-performing asset or a
restructured asset.
 Liquidity
 CRR – 4% to 3%
 SLR – 18.5% to 18%
 Policy repo rate– 5.15% to 4%
 Reverse Repo rate- 4.9% to 3.35%
 bank rate- 5.40% to 4.25%.
 Emerging risks such as
 inability to man branches and call centers,
 asset-liability mismatch due to deposit flight,
 inability of clients to service debt due to job or
business losses,
 increased cyber-crimes,
 inability of vendors to provide services
 Increased market volatility
 IMFchief has called the current business
environment as recessionary
 Need strict regulation and supervision of banking
and financial markets
NBFC
 IMPACT
 deterioration in credit quality of loan portfolio
 industry-wise classification of loans necessary
 Macro-economic factors – RBI, government
 Valuation of collateral to be reconsidered
 Collateral :
 shares or bonds prices,
 real-estate values and

 credit standing of guarantor(s).

INSURANCE
 IMPACT
 Increased financial risk, operational risk and
business continuity planning.
 to cover loss arising due to certain unforeseen
circumstances - Coronavirus ?
 Assest Laibility Management
 Staff to work from home
 dedicated support via call centres
 organised webinars on policy conditions, possible
claims and cyber security policies to create
awareness
 reduced bond interest and repo rates
HEALTH INSURANCE
 IMPACT
 Rise in Claims from 8 to 15%
 Some studies have shown that COVID-19 affects
those with co-morbidities such as diabetes, renal
and other chronic diseases adversely,6 and hence
prolonging of such co-morbidities can result in a
longer trail of non-Covid-19 chronic claims
 Greater concern and awareness about health, and
enquiries about health insurance policies have
increased by 30–40%
GENERAL INSURANCE
 Motor Insurance
 Lack of purchase of new vehicles
 Claim surveying impacted by lockdown as
surveyors not be able to go out to survey vehicular
damage
 social distancing means more private vehicles and
Purchase of more two-wheelers, used cars or low-
end cars
 Burglary insurance: likely to be a rise in demand
for unoccupied commercial property insurance.
 accident insurance: Low claims are expected due
to lack of activity and movement, and also lower
renewal of policies.
LIFE INSURANCE
 escalation of deaths and claims
DOUBTS AND QUERIES
TOPICS FOR NEXT LECTURE
 Detailed discussion on changed scenario of
Service sector in COVID times