Final 1006GREJTEESRSRP4000

An assessment of risk management in the Indian Banking Industry during Covid 19

Contents Chapter-1: Introduction and Background .............................................................................................. 3 Introduction ....................................................................................................................................... 3 Rationale/background of the study ................................................................................................... 3 Aim and Objectives ............................................................................................................................ 5 Chapter-2 Literature Review .................................................................................................................. 7 Evaluating the Impact of Risk Management ...................................................................................... 9 Chapter-3: Research Design and Methodology .................................................................................... 13 Research Paradigm .......................................................................................................................... 13 Sampling .......................................................................................................................................... 13 Research Design ............................................................................................................................... 13 Data Collection Process ................................................................................................................... 14 Ethics in Business Research ............................................................................................................. 14 Chapter-4: Data Analysis ...................................................................................................................... 16 Potential Outcome ............................................................................................................................... 18 References ........................................................................................................................................... 19

REPO rates. The Reserve Bank of India has determined to present clients’ destruction by extending the compensation duration because many are suffering from reaping their goals[ CITATION Arc21 \l 1033 ]. This study paper aims to analyze the adjustments made via form means of the RBI due to COVID19 and the effect of COVID-19 on the Indian banking area in general. The COVID-19 pandemic might be one of the most devastating threats to the monetary offering’s enterprise within the first century. The effect of COVID19 on banks is a tremendous decline in demand, a decline in income, and a downturn in production, all of which affect the bank`s operations[ CITATION Arc211 \l 1033 ]. As organizations deal with the effect of COVID-19 on monetary offerings, the hassle is exacerbated through exertion shortages, loss of virtual maturity, and stress on current infrastructure. Banks are complete in the technique of the brand-new coronavirus epidemic COVID-19[ CITATION Ran21 \l 1033 ]. As the virus spreads worldwide, debtors and organizations are liable to dropping jobs, sales, and income. Banking clients may also search for monetary assistance. A pandemic significantly affects the monetary machine as it has a massive impact on the financial system. To cope with the direct economic outcomes of the coronavirus, banks want to plot to defend personnel and clients from the unfolding of the virus. Many establishments already inspire sure people to paint from home. The cause of this newsletter is to expose how the COVID19 pandemic influences the banking and monetary sectors[ CITATION TAr22 \l 1033 ]. According to the Bank of India, an epidemic of the Indian coronavirus may want to wipe out its economic machine for years. Banks are in the middle of the financial system and offer capital to agencies and individuals to preserve the device up and running its miles vital that they may be stable[ CITATION Ras22 \l 1033 ].

The Indian financial system is closely dependent on banks. This paper seeks to perceive the causal effect of an epidemic like Covid 19 on banks because of the blockade. As a result, all commercial, educational, authority, and personal workplace places were closed. Aim and Objectives There has been a disproportionate impact of COVID on all the sectors, but the banking sector, being the backbone of the Indian economy becomes a very crucial sector; the mark on this industry and what measures have been adopted by the banks to cope with this shock became the essential factor that needs to be analyzed and discussed with the help of this paper. The main objective which the paper focus includes: - What efforts should be made to reduce the impact of the Covid19 epidemic on the banking sector? Due to the outbreak of this virus in the current situation, Indian banks need to evaluate their portfolio of assets and liabilities in all of the above conditions to understand the adverse effects quickly. This current economic environment has created a higher level of stress analysis that may directly affect the existing settlements of the Indian Bank. Identifying high-risk sectors/areas and reassessing credit-related risk reserves in various economic scenarios is inevitable. - What are the main issues facing the Indian banking sector at Covid19? A critical production unit was shut down or only partially started. The entertainment, aviation, and tourism industries have all suffered significant losses. As a result, market liquidity needs to be improved to reduce NPA. This is a severe problem for the banking sector. RBI supplied the system with about 3.2 per cent of GDP[ CITATION End21 \l 1033 ]. Banks can now lend to rebuild or maintain a heavily damaged sector while mitigating risk.

Chapter-2 Literature Review This chapter aims to view the Indian banking industry impact that has been caused due to the pandemic; this study also aims to view various theories and the changes that have been occurred after the pandemic hit the industry, and last but not least, the chapter seeks to consider in details the objective of the study. Influence area of COVID-19 on the Indian Banking system: After the crisis, banks and monetary establishments had been under exquisite stress to preserve their commercial enterprise as usual. Banking transactions, including coin deposits, withdrawals, coin assessments, and different everyday counter offerings will now be performed simultaneously while protecting a safe distance of at least 1 meter.[ CITATION Ras22 \l 1033 ] Bank tellers are trying to apply pliers and steam irons to sterilize assessments, which have become a warm subject on social media. In the face of emergencies, operational and technical obstacles for each client and personnel have discovered the loss of adaptability and standard loss of adaptability in our monetary system. The instant classes found from the cutting-edge COVID 19 trouble will deliver the coveted rigour to digitizing and optimizing banks` back-quit operations. Within a bank, this reduces reliance on guide entry, face-to-face (i.e., paper) verification, and personnel intervention. It is an excellent possibility for utilities to paintings tough to combine era and growth purchaser acceptance. Other Indian Banks (both public and private) are already online with certain essential banking services and transformed by digitizing all features, processes, and systems have been completed. Focus on Legacy banks and financial institutions in India will also consider collaborating with new entrants and fintech. These needs-driven partnerships

drive innovation and enable banks and FinTech to leverage each other's large customer base and new technologies[ CITATION Ran21 \l 1033 ]. Are Indian banks ready to assimilate such future events? The dilemma of the banking quarter is predicted at around 166 lakh crore; it isn't always over yet [ CITATION End21 \l 1033 ]. As a result of GST, many small and medium-sized enterprises (MSMEs) were wiped out, forcing banks to rebuild many of their MSME loans. The massive loss in revenue and the capital being wiped out show that a consecutive pandemic will dreadfully impact the banking industry if a consecutive pandemic occurs shortly[ CITATION Emm20 \l 1033 ]. Loss of faith in the banking sector: For the first time in decades, the Reserve Bank of India has shut down its private bank. The regulatory moratorium is a last resort, as the PCA framework is available to bring banks back to a healthy state. Yet the bank's balance sheet over three rack chores was enough to boost the stock market, the collapse of the Punjab & Maharashtra Cooperative Bank (PMC) Bank and Jesus Bank, multilateral co-operative banks, has once again highlighted the issue of a bank trust. The government has also raised the deposit insurance limit per depositor per bank from 1 rupee to 5 rupees [ CITATION Sha212 \l 1033 ]. All but a few Indian banks are well funded, but the current blunder has shaken small depositors' confidence in the banking industry. Revenue pressure on Banks: Retail and corporate profits are collapsing, with underlying spending and transactions declining by 10. When central banks around the world lower interest rates, banks lower

some point, similar needs arise. Building the concept of operational resilience goes beyond operational risk. Banks are already implementing business continuity plans.  Identify business services where disruption can threaten customer and market trust.  Setting immune limits  Testing resilience by exposure to a variety of complex but reliable situations  Develop skills and communication strategies to help recover from stressful situations as quickly as possible Scenario Inadequacy: Banks build scenarios based on previous financial market events, such as Black Monday in 1987 and the financial crisis in 2008. Economic scenarios are the most familiar future scenarios for deceleration, geopolitical tensions, etc. The Trade War and the Middle East Conflict between the United States and China. As a result, the geographic impact of these s narrows the scope of the possibilities. If risk events are already in progress, they will be executed from a strategic point of view and seen from above. In retrospect, the 2003 SARS outbreak can be seen as a success. This is considered a warm-up for the COVID-19 pandemic, but few know it[ CITATION TAr22 \l 1033 ]. They would have done so if the banks were evaluating or explaining it. The Indian Bank would have to monitor the impact of transfers by expanding and analyzing the scope of the situation. Implementation of broad stress testing capabilities: Regarding corporate stress testing, the Comprehensive Capital Analysis and Review (CCAR) method was implemented by the Indian Banks as it covers many risks such as credit, markets, and counterparties. On the other hand, the time required to run a test ranges from

a few weeks. In addition, at most banks in the company, individual risk departments usually do not perform stress tests. Perform internal stress tests in each risk area and communicate the results[ CITATION Bab20 \l 1033 ]. Different risk classes have other effects. It is difficult to predict when the COVID 19 problem will end and what it means for risk leaders in the world economy. As a result, the (CRO) needs to run the scenario in different situations. It quantifies the impact on all risk categories of different economic severity. Discuss survey results with senior management to ensure timely delivery and take intelligent measures to reduce the effect. The changes which can be bought in the stress testing scenario include:  Explore the steps, systems, and infrastructure used to run what-if scenarios, and develop strategies to make the necessary adjustments to acquire computing and reporting capabilities during the day. Includes severe potential risk scenarios in the banks. However, expanding the scope of stress testing requires compelling methods. Natural Language Processing (NLP) model will be used for acquisitions Banks can discover exciting trends in India.  Assess the effectiveness of the internal model in addition to the early signs of an imminent problem. Identify all risk variables and assess their validity. Make sure the data is sufficient and check the assumptions. Approach to determine if the model is moderate Assess risk and take corrective action as needed. Efficiency and Cost Optimization: The short-term to medium-term focus is on reducing costs and improving efficiency. High- risk could be processed by robotics, Process automation (RPA ), Machine learning (ML ), Natural language processing (NLP ), and Risk owners working with cognitive RPA was

Chapter-3: Research Design and Methodology Research Paradigm This section describes the research paradigm which explores the philosophical aspect of the research. The research paradigm is the conceptual framework of the research which is used by the researcher to understand and implement the components of the research process[ CITATION Abd204 \l 1033 ]. The conceptual framework of the research paradigm guides the researcher in choosing the appropriate research process for the study. This will help the researcher to implement the most suitable research strategy and research process for performing the research. For this research, the research paradigm of interpretivism will be implemented for the data collection and data analysis process. The researcher following the interpretivism research paradigm believes that human behaviour is influenced by various situations and circumstances[ CITATION Reh16 \l 1033 ]. Sampling Since this research paper does not use any primary data, so there will be no need of implementing any sampling approach or data. The sampling method is viable in cases where there are human participants involved in collecting relevant data in a research process. Research Design There are two types of research strategies that are implemented in research. These are quantitative research methods and qualitative research methods. To collect relevant data for performing the research study, primary or secondary data sources can be used[ CITATION Cre03 \l 1033 ]. The quantitative research method deals with the numerical aspect of the research process while the qualitative research method deals with the theoretical aspect of the study. This paper implements the qualitative research methodology as it is related to the assessment of risk management in the Indian Banking Industry during covid times. The qualitative research method will be best suited for this study as it aims at knowing answers

to framed research questions and understanding the risk management process in the Indian banking industry during Covid-19. Data Collection Process Data collection is a crucial part of the research process as it helps in generating the relevant information for achieving the research objectives and defining the crucial components of the research. The secondary sources will be used to collect the required data[ CITATION Zia21 \l 1033 ]. To collect this data, various academic papers, articles, publications, annual reports and policy statements will be reviewed[ CITATION Ala14 \l 1033 ]. Authentic and reliable platforms like Google Scholar, IEEE, Science Direct and official websites will be used which will provide information about the need for risk management in the Indian Banking Industry due to the challenges faced due to the Covid-19 pandemic. The use of secondary sources will also provide various benefits to the researchers as the information will be obtained from the most trusted and valid sources. This method is also cost-effective and time-saving in comparison to the primary sources and will aim at extracting meaningful information from the materials which have been already published[ CITATION Gha10 \l 1033 ]. To achieve reliable and valid results, only the latest papers will be included and the use of any outdated data will be avoided. Ethics in Business Research Research ethics is an important part of the research process as it helps in ensuring that the research has been performed by following all ethical practices which also gives accurate and valid research outcomes. The implementation of ethical considerations in the business research also ensures that the researcher has not performed misconduct or misinterpretation of the data during the data collection process[ CITATION Ngo18 \l 1033 ]. In this research as well, all ethical considerations have been considered by the researcher.

Chapter-4: Data Analysis In this research, thematic analysis is the best-suited technique of data analysis to be implemented. Thematic analysis is a qualitative method of data analysis that is a process of reading through datasets like transcripts from focus groups and in-depth interviews and identifying meaningful insights from the patterns across the data so that themes can be derived. In simple words, thematic analysis is a study of patterns of meaning where themes within the data set are analysed so that meaning can be identified[ CITATION Kig20 \l 16393 ]. The process of thematic analysis is driven by the research questions which focus on the key aspects that relate to the research questions of the research. Thematic analysis is most suitable for this research study as it allows for dividing and categorizing large amounts of data so that meaning can be derived easily. This data analysis technique is useful for deriving subjective information like views, experiences and opinions of the participants’ data which is assessed from interviews, conversations, and surveys. The deductive approach of thematic analysis will be further implemented to derive the subjective information from the collected information. Thematic analysis is a powerful and flexible method of analysing qualitative data to understand thoughts, experiences and behaviours across a dataset[ CITATION Kig20 \l 16393 ]. It enables the researcher to generate new concepts and insights derived from data. The process of implementing the thematic analysis involves a six-step process. These steps are:  Familiarizing yourself with your data  Generating initial codes and assigning preliminary codes to data to describe the content

 Searching for themes or patterns in the codes  Reviewing themes  Defining and naming themes  Producing the report Gantt Chart Activities/Weeks March (10- March- 31, 2022) April-01 (20- April, 2022) April21- April-30, 2022) May 1- May-15, 2022) May-11, May-29, 2022) May (15-Jun 10, 2022) June (11- June-20, 2022) Framing Research Introduction Developing Aims and Objectives Developing rationale for the study Drafting Literature Review Implementing Research Methodology Review of proposal and tutor feedback Submission of the final research proposal Potential Outcome COVID19 could be one of the most critical issues the financial services sector has ever faced. The impact on banks is a significant decline in demand, a decline in profits, and a decline in production, all of which negatively impact the bank's operations. The staff shortage, lack of

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