Critically Examining The Impact of Covid-19 on The Productivity of Indian Public and Private Sector Banks

Abstract

Banks fuel the country’s economic growth by enabling capital to move to productive assets at the appropriate time. Banking sector is the backbone of the Indian economy which provides significant insights to effectively generate money in real time for capital formation, credit creation, cash management, monetize debt, business growth, technological development, financial security & stability, and so on. Thus, banks have long been the engine in the development of industry and trade for India’s success. Therefore, it is very important to assess bank’s performance through productivity indicators to know about soundness of economy. Profitability, efficiency and productivity of banking sector make positive contributions to the financial system. The purpose of this paper is to compare and examines the impact of Covid-19 on the Productivity of public and private sector banks in India. Sample of the study is based on the random sampling to select Public Sector Banks such as SBI & BOB and Private Sector Banks such as HDFC and ICICI. The study covers 6 years time period, before occurrence of Covid-19 from 2016-2019 and during Covid-19 from 2019-2022. The present study will be defining productivity with reference to the efficiency and effectiveness. The study analyzed bank’s productivity using key indicators mainly Loans to Deposits, Cost of Capital, Return on Investment, Leverage & Efficiency Ratio and Non-Performing Assets Ratio to do comprehensive and critical analysis of bank’s productivity pre and during Covid-19. The study will propose models which can be applied in areas such as Bank Performance Evaluation, Monetary & Non-Monetary Resources Management, and Continuous Improvement & Performance Management etc.