Banks need to raise and conserve capital in COVID time: former RBI deputy governor
- Country:
- India
Commercial banks of the country are required to raise capital at this juncture even if it is not needed as the COVID-19 pandemic has made the future uncertain, former deputy governor of RBI N S Vishwanathan said. He said that raising resources at the moment is essential as it might not be available or become exorbitant when actually needed.
"Banks are required to raise capital at the moment. They need to raise and conserve capital. This is because when it is needed, capital may not be available or become highly expensive," Vishwanathan said while speaking at a webinar organised by Enqube Collaboration.
According to him, both the government and RBI have announced a slew of measures to limit the debilitating effect of COVID-19. "However, the future is uncertain and the contraction of the economy is sure to happen," he said.
NPA levels of banks are sure to go up and the entire risk management mechanism will undergo a paradigm shift, Vishwanathan said. He said that banks are required to be adequately capitalised and the cost-to-income ratio has to be lowered.
MD&CEO of Punjab National Bank, S S S Mallikarjuna Rao, said that it is needed to maintain the quality of assets and raising capital. A sectoral assessment has to be done and there is also a need to assess the damage caused by COVID-19 pandemic, Rao said.
Challa Srinavasalu Setty, MD of SBI (digital and retail banking), said that the pandemic has impeded economic activity of the country. In such a scenario, business continuity plan (BCP) has been tested to the extreme, particularly on human resources, he said.
According to him, 91 per cent of SBI's transactions are outside the bank branches.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
- READ MORE ON:
- NS Vishwanathan
- Mallikarjuna Rao
- COVID
- RBI
- SBI
- Punjab National Bank
ALSO READ
My taxable income plummeted to Rs 680 in 2021-22 due to Covid-19 losses: BJP's Chandrasekhar
Olympians excited for Paris Games with fans back in the stands after COVID restrictions
MSMEs in TN crushed by triple impact of demonetisation, GST, and unplanned COVID lockdowns: Congress
HC raps Maharashtra govt for denying compensation over nurse’s COVID death, calls it ‘insensitive’
Health News Roundup: Sanofi to overhaul US operations of vaccines, cut jobs; After COVID, WHO defines disease spread 'through air' and more