BUSINESS

RBI tells banks to assess impact of COVID-19

Asset quality, liquidity to be studied

The Reserve Bank of India has asked financial institutions to assess the impact on their asset quality, liquidity and other parameters due to spread of the COVID-19.

While announcing operational and business continuity measures in the wake of the spread of the deadly virus, RBI said, “supervised entities should also assess the impact on their balance sheet, asset quality, liquidity, etc. arising out of potential scenarios such as further spread of COVID-19 in India and its effect on the economy, contagion from wider disruption in the global economy and the global financial system, etc.”

Banks have also been asked to encourage their customers to use digital banking facilities as far as possible.

These entities have been asked to take immediate contingency measures to manage the risks following the impact assessment.

The banking regulator said banks and financial institutions will have to devise strategy and monitoring mechanisms concerning the spread of the disease within the organisation, and should make timely interventions for preventing further spread in case of detection of infected employees, including travel plans and quarantine requirements, as well as avoiding spread of panic among staff.

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