After the banks reported a shocking profit amidst the pandemic in 2020, the first profit in two years, the year 2021 is expected to be a better year for all the banking and non-banking financial companies. Covid-19 forced the Reserve Bank of India to make certain changes for the banking companies to survive the pandemic. These may have been responsible for the ongoing profit. However, 2021 will see a new set of changes which the banks must be able to embrace to continue their journey towards profit.
D.K. Joshi, who is the Chief Economist at rating agency Crisil said that there will be growing next year, however, it will take time for the banks to get rid of the scars of covid-19 and return to normalcy. He seems positive that the financial sectors will be able to handle this stress in a good manner.
Indian banks were surprisingly able to escape a major bad loan shock during the advance of the Covid-10 pandemic after the Reserve Bank of India offered a moratorium for six months for all assets that were stressed due to COVID. It also offered a one-time restructuring (OTR) option. Under this OTR, banks can offer up to two years of a moratorium for borrowers who are going through a financial crisis due to COVID-19.
An anonymous banker believes that there is still a high amount of uncertainties in the air as covid-19 persists and vaccines have not been provided yet. He believes that stress, however, can be controlled.
Most banks have been showing signs of improvement and this improvement can be carried on. Banks such as ICICI Banks have seen huge profits from home loans from September to October. The bank reported that the mortgage loan portfolio to have crossed Rs. 2 lakh crore. ICICI Bank has also been increasing its digital presence, very cleverly to increase its profits.