Corona effect in Banking System

Corona effect in Banking System

World is suffering from COVID 19, Corona Virus and it is killing millions of people around the world and more than millions people are suffering from the disease. Corona virus is being deadly so most of country have lockdown their nation in order to stop transfer of disease from one people to another. Due to lockdown most of people would die of starvation and we are going to present some effects of corona virus. Day by day different types of variant are effecting people all over the world.  Nepal is also highly affected by this virus and we know that banking system plays a vital role in this situation and we have already discussed about effects of corona and today we are going to be specific today and today we are going to discuss effects of corona in banking sector.

Effects of corona in banking sector can be

Positive Effect: Due to  corona some positive effective has been observed in banking sector i) Technology:  The Covid- 19 has accelerate digitalization in the banking system and Bank are more digitalized and focusses customers to use digital products like ATM, Mobile Banking, IPS, and Internet Banking. In this 21^st century digital products are very important to be in competitive market.  

ii)  Unity: Due to corona there are good harmony among bankers

iii) Cost saving: As banks are operated in rotation basis so bank have saved cost to some extend like electricity, phone,

Negative Effect

i) Business Slow Down: Due to covid 19 banking sector are highly affected and their business growth are slow down which leads to loss their interest earning opportunity.

ii) High Cost: Covid 19 has accelerate digitalization in the banking system which leads to increase cost of the bank

iii) Low income: Due to more operational related cost like mask, sanitizer, and other equipment banks operating cost are becoming high  and in the other hand customer are demanding low interest rate which leads to decrease income of the bank

iv) Operational Risk: Due to  lack of sufficient staff may be due to covid positive or governing authority rules( 50% staff) banks are in high risk as one staff are  compel  to perform task of 2,3 staff which may lead high challenge to bank.

v) High Non Performing Assets: Due to Covid 19 most of sectors are affected and they are almost shut down and employee of such organization are  suffering pay cut or no pay so such loan customer of bank might be difficult to pay EMI/Interest which may lead bank’s Non-Performing Loan in higher level