What is your assessment of the impact on asset quality due to the ongoing virus pandemic?
While there cannot be divergent views on the impact of the pandemic globally, it is also evident that the financial sector in general has taken a huge beating. With the lockdown continuing and economic activities coming to a halt, bank earnings are directly impacted. With manufacturing, SME and retail business, except the essential consumable items, non-functioning for quite a few months in a row, the impact on GDP is likely to be severe. Hopefully, economic activities may resume over a period of 6-9 months which will possibly improve the asset quality too. Due to the virus pandemic, there is a sharp decline in the purchasing power of households where discretionary spending has reduced to half.
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August 03 - 16, 2020