In: Finance
How banks can survive during Pandemic COVID-19
Banks can survive in covid-19 pandemic as follows-
A. Banks need to properly analyse their liquidity and they need to ascertain the maturity gap analysis and they should be trying to match the maturity of their assets with their liabilities in such scenarios.
B. Banks need a sound monetary policy from their Central banks which is highly supportive of their existing condition and they will be trying to infuse liquidity into the system and they should be decreasing the Reserve requirement
C. Banks also needs to have very high quality of assets on their books so that in the case of any financial sqeeze, they are going to survive due to lower default rate on their assets
D. Banks also needs to sale of their bad assets quickly in order to protect those assets from default and they need to sell these assets to assets reconstruction companies which will be providing them with high liquidity
E. Banks need to form policies in synchronisation with the current monetary policy which will be helpful for them in order to maximize their chances of survival in this crisis
F. Banks need to properly analyse new loans and new deposits because their rates should be not similar to the previous loans as they has been issued during the time of endemic and when should be trying to have optimum security on their hands and they should be trying to only issue loan to those who have high creditworthiness
G. Banks also need to cut upon their overall operational costs which are excessive in nature and they are not leading to additional benefits