New Delhi, May 31 -- Ever since the outbreak of Covid-19 in 2020, Indian banks and the NBFC sector has taken a huge toll in terms of asset quality and future business prospects. After the first wave subsided early this year, there was some optimism in terms of loan recovery. But the second wave seems to have taken over way too quickly. It has led to state-level lockdowns, almost all around the country. While such moves are important to save lives, it hampers jobs and businesses. Thus, it will have a direct impact on the repayment ability of millions of people.

Banks and NBFCs have to be cautious about recoveries in their existing portfolio in such a difficult scenario. At the same time, they also need to tap newer opportunities with opti...