“If it were not for COVID, a bank like the State Bank of India would be in a very happy situation,” Kumar told FT. “In the last couple of years we have done the clean up, so this is the time when we would have been reaping the fruits of that clean up. But unfortunately now we are in another situation.”
India’s banking system has been plagued by one of the world’s highest bad-loan ratios. Among the problems is a history of bad lending decisions and poor governance, the newspaper reported.
Since India ordered its nationwide lockdown in March, the financial system has been supported by credit guarantees, a reprieve on loan repayments through August and emergency liquidity injections.
On Saturday, CNN reported India has become the third country after the U.S. and Brazil to report 1 million coronavirus cases, according to the country's health ministry.
“We will take all necessary steps to ensure that we’re able to help out whoever needs it,” Kumar told the newspaper. “There are many people who have good intentions but may not be having enough cash at their disposal.”
Sunil Mehta, CEO of the Indian Banks Association, a Mumbai-based trade association, said he has asked the government to extend tax relief to airlines and others or they will collapse and hurt lenders’ loan books.
“Every impact on the economy is transferred to the balance sheets of the banks,” he told the paper.
S&P Global Market Intelligence said in its 2020 India Mobile Payments Market Report that the pandemic has bolstered mobile payments in India and primed them to overtake card payments in the not-too-distant future.
S&P’s analysis demonstrated that Indian mobile-payment transactions grew 163 percent to $287 billion in 2019. By contrast, debit- and credit-card use only increased by 24 percent to $204 billion during the same period.
In June, PYMNTS reported while more than 120 million Indians lost their jobs, the one group that was hit most critically in that collapse of employment was women.