It’s been many records in the banking sector that we came across in 2020. Looking at the measures taken by the Reserve Bank of India (RBI) - today we are seeing the lowest interest rate that is seen in the history of the Indian financial system.

We also saw that the moratorium was given for loans that were under default in the lockdown period and also the fact that the RBI boosted the system with abundant liquidity. Today, the reverse repo window is seeing anywhere between 6-6.5 lakh crore of funds being parked.

The one-time restructuring for loans were allowed to those whose loans were under moratorium and could not pay.

RBI also cautions against unauthorised apps. They asked banks to raise sufficient funds. We saw banks raising over Rs 80,000 crore this fiscal so far and also asked banks to stop paying out dividends in order to ensure that banks are well-capitalised.

What to watch out ahead?

RBI has given out a discussion paper with respect to corporate governance and ownership structure in private banks. Converting the large non-banking financial companies (NBFCs) into banks as well as CEO duration of private banks.

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(Edited by : Ajay Vaishnav)