The Impact of Covid-19 on the Economic & Financial Development of India
Today when we are living in the times of Covid-19, the impact can be seen more in the urban areas than rural areas. Because the pandemic has affected us due to globalization, the impact of Covid-19 is more evident in the urban cities rather than rural areas. With labours migrating from the urban cities to their respective villages, towns, due to the extensive lockdown which lasted for around 2months, the labours have been rendered unemployed and after the lockdown has been lifted in parts, the urban cities are now witnessing mismanagement because of the migration of the workers and with time, the pre pandemic growth will be regained. The government has allocated an additional Rs 40,000 crore to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) which will help in boosting the economic and financial condition in the rural areas and making India a self-independent country.
Considering that our country is a vast and diverse democracy, the government of our nation has to function towards social and economic welfare of a complex heterogeneous demographic. Transparency is a virtue of democracy, an elected body represented by the people shall always maintain highest standards of transparency. This is specifically important as access to complete and accurate information on each and every initiative taken up by the government for economic welfare of the country as a whole may also be comprehended with ease by each individual citizen, with individual / business goals and help in better financial planning.
Owing to the current economic scenario of the world economy as a whole, there has been significant erosion in new economic opportunities, existing financial viability of business across industries (such as travel, hospitality)
Dos and don'ts for small scale and growing banks
Owing to the current economic scenario of the world economy as a whole, there has been significant erosion in new economic opportunities, existing financial viability of business across industries (such as travel, hospitality etc.) In the current state of the economy, it is crucial for banks to focus on lending to select groups of businesses, and specifically focus on the initiatives and relief modalities announced by the government through various schemes. It is crucial to keep in mind that small scale banks keep a healthy portfolio of investments and standard debt. Simultaneously, the banks should also focus on minimizing their NPA portfolio and explore options towards reconstruction / other recovery alternatives.
Indian Banking Association are roping in monitoring agencies to track end-use of funds to stop promoters from siphoning bank loans. Newly appointed monitoring agencies will look beyond basic financial information and probe the conduits of money laundering like loans diverted to investment arms, related party transactions, fund diversion to shell companies and vendor background verification.
There should be better protection of online transactions so that it becomes secured for the customers. We have seen that the current system of online transactions have been hacked and customers have lost their money and therefore the private and public sector banks should make more stringent artificial intelligence to protect the online transactions. There should better protection of online transactions so that it becomes secured for the customers. Options to be explored for the same are inter-dependant and correlated as follows. Ensuring end to end encryption of data flowing through payment gateways. There have been strides in this particular field involving artificial intelligence for enhancing level of security. Ensuring appropriate measures to assess and counter cyber security threats. Any personal information of customers should be protected and vendors supporting the IT infrastructure of banks should be carefully appointed with ample scrutiny. Adequate support staff to assist customers with their queries. Further, in order to streamline the online transaction interface, while private banks have led the way in our country with the same, public sector banks have also been exploring more ways to connect with their customers.
The Role of Technology
The advent of smart analytics allows financial services companies to mine the wealth of consumer data to understand and service customers better. Technology has also helped organizations develop innovative financial services. The development of better payment systems is a key challenge for organizations. Technology has been supporting the businesses for quite some time now and we have seen the benefits of technology in this sector. Financial services industry, some of the used technologies include artificial intelligence (AI), big data, robotic process automation (RPA), and blockchain. In the past, financial services would have trained staff that would help customers sort out problems and provide assistance. Now, chatbots are becoming a regular interaction that customers will interact with.
The current time is unprecedented and we are living in a different environment and opportunities in all sectors have been reduced due to the pandemic. The need of the hour is to hang on and wait for the time to be more favourable for conducting business. All of us need to sail through this difficult times with the limited opportunities we have at our hands so that when the time is better and the situation improves then there will be ample amount of opportunities.