As a reason for the lockdown, the banks will be impacted heavily due to the recessionary and low flow of funds and investments. There will be heavy defaults on the loan i.e.: - Increase in the NPA of the banks and NBFC, this is due to the unavailable of the funds due to the lockdown. As a result, the Lender of last resort will fluctuate the interest rates and income for the financial institutions will be severely affected. The current situation is leading the banks for fewer transactions and as a cause, the domestic and international transaction fee income is being declined to the banks. As a contradiction to the banks and NBFC are following two different reporting systems, i.e:- Banks are being followed the Indian GAAP(Globally Accepted Accounting principles) and NBFC follows the Indian Accounting Standards, this will cause a difference and reflect the wrong figures in the statements of accounts. In the short term, the customers will give the highest priority to savings rather than the investments, as a cause the there will be funds availability will be higher, but only for the short term period. Here, after the lockdown, the people will choose the endowments policy, which will cause the flow of endowments markets.
In this scenario, the banks should maintain adequate funds for the availability of their customers respectively. In the country, liquidity can be maintained and regulated by the Reserve bank of India, this can be achieved by the Monetary policy committee of the RBI, with the alignment of Fiscal policymakers. Here the competition between the Large capitalization and small, newly established companies arises due to the public confidence level and the security of funds. The customers of the small banks will shift the work to the large banks for the safety and the security of funds. Retaining of the customers and the fund's availability will be the biggest challenge for the small banking systems. The risk of liquidity will arise for all the banks, NBFC, and Insurance companies. The liquidity risk may be addressed very sensitively for the customer's availability. This liquidity risk will vary from short term period to the long term period.
As the moratorium has been raised on the repayment of the EMI, the financial institutions should maintain the adequate balance between the availability of funds between the no repayment of the monthly installments and the borrowers from the bank. In the upcoming period, the interest rate will be changed very frequently, as a result, the banks should be prepared with adequate capital and measures to provide the capital in the market accordingly to the interest rate fluctuations. The credit risk will be a major concerning issue for the banks. This need tot is addressed by the banks from the sectors like Automobile, consumer goods, constructions, government sectors, infrastructure, and SME that need to be addressed and prepared in credit risk.
Post lockdown, the cash-intensive business will be reformed into the completely digital platform for the collection of the money from its customers and the vendors respectively. There will be a new way of working remotely by the employees and the initiatives of automation will play a crucial role for the banks, where monotonous and repetitive tasks are involved in the operations. Banks need to be complete digitalization, which will enhance the remote working of the employees and the reduction of the work lace in the organization, overall the cost reduction will be a huge benefit for the final institutions. It is also important to provide the adequate facilities of cybersecurity for the servers and control systems of the banks. Overall, the banks need to be monitored in keen on the application of its decisions and updating the changes accordingly to the changes in the market conditions.
The change of the asset classification needs to be done for the effective utilization of the monitoring of the assets, its repayment, NPA, and its allied activities. This will help the banks in identifying the stressed sectors from the free of liquidity crisis sectors. It is also important for the banks to be extended repayment of the period for the company and its customer requirements. All NBFC to be provided with more liquidity, when compared to the other sectors of the industry, because from the first NBFC is facing a huge liquidity crisis heavily. Banks and other financial institutions can be survived if the Tax holidays is being provided by the Statutory body in the nation. The moratorium should be extended additionally to the other 3-6 Months period of time. One of the most affected sectors is the MSME and it should be considered as more than all prior sectors. The biggest weapon, RBI can use in this crisis is the Issue of the commercial papers for the long term and make the liquidity available in the nation freely.
The 3 thing I liked KPMG Report writing is as follows:-
- The tabular presentation of the data is very attractive and user friendly of the data.
- The classification of the data is understandable, and memorizable easily.
- The use of simple and understandable terminology in the report makes the data to read more.
The 3 things as a business author, my thought process today compared to yesterday is as follows:-
- I need to improve my way of presenting the data with more attention-getter from the reader.
- I can present the data insight deeper and in a more understandable way.
- I can see my change from yesterday and today's report.
The 3 thing that I want to improve in my business writing is as follows:-
- I can be a good business writer with more use of resources in the way of presenting data.
- It is much important, to make a reader read our writings, which can be possible only when we make it neat and legible.
- The deeper a=insights of the data should be brought out, with more supportive