SBI: The country’s economy, which was witnessed a disruption because of the coronavirus outbreak, has started recovering from June, as State Bank of India’s Chairman Rajnish Kumar said on Friday as well. Speaking at the SBI Banking and also Economics Conclave, Kumar told there is a need to wait for around three to four months to see the trend of the recovery as well.
“COVID-19 has been caused gigantic disruption of the Indian economy along with dislocation of the supply chain as well. April was the worst month. Things had slightly improved in May, whereas the recovery started in June,” as Kumar told at the webinar.
The industrially advanced states such as Maharashtra, Gujarat, and also Tamil Nadu were the worst affected because of the pandemic, as he said as well.
“The partial lockdown has announced intermittently as across the country is also dislocating the supply chain,” as he added.
Asked whether the Reserve Bank of India (i.e. RBI) will extend the moratorium on loan repayments till the end of the year, the SBI chief said there is “no need for extending it across the board beyond August 31, 2020”.
“Some sectors have been severely affected. I expect the RBI to take a calibrated approach on the issue as well,” Kumar said.
He said the banks had been able to absorb the shock due to the moratorium offered to the borrowers in the wake of the worldwide COVID-19 outbreak.
He said the SBI data showed that there is a rise in NPAs because of the coronavirus crisis but it can be “manageable”.
People have been very cautious about increasing their liabilities by opting for the moratorium, that especially in the retail, agriculture, and MSME sectors, as he told.
“The corporate houses have opted for the moratorium. The intent is to preserve cash. It is not that they were so unable to pay,” as Kumar told.
He said the most-affected sectors are aviation, hotel, and also tourism which need help as well.
The impact of the COVID-19 pandemic situation is severe than the 2008 global financial problem, as the SBI chief told. The coronavirus crisis has led to the contraction of the global economy to a large extent, as Kumar added as well.