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    Lockdown should be lifted entirely, piecemeal approach will not be effective: Axis Bank CEO

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    Lockdown should be lifted entirely, piecemeal approach will not be effective: Axis Bank CEO

    The government needs to lift the lockdown entirely now as a piecemeal approach may not work because of interlinkages, Amitabh Chaudhry, Chief Executive Officer of Axis Bank, said on Wednesday.
    India has had the strictest lockdown with no major fiscal support like other countries, said Chaudhry, adding that it will take 6-9 quarters for revival of the economy.
    According to Chaudhry, if the lockdown does not get lifted soon, it is given that a number of corporates and individuals will go through severe stress and some will become non-performing.
    "If we keep the country shut for anywhere between 7 weeks and 10 weeks, we need to open up the entire country, we cannot be opening parts of the economy, there are so many interlinkages of everything you open up. You can continue with your strict norms in terms of how you will shut down parts of country or city or districts if there is a red spot developed but the country has to be opened up. Otherwise it is going to lead to a huge economic crisis," he said.
    "India – based on where we stand today – has one of the strictest lockdowns in the world and from an economic support perspective, we have still got some distance to cover," Chaudhry added.
    The private sector lender on Tuesday reported a surprising loss of Rs 1,388 crore for the quarter ending March 31, as provisions rose sharply compared to a year ago.
    Despite a healthy 19 percent net interest income growth over the last year, 15 percent growth in its loan growth, and a 17 percent rise in operating profit, the bank posted a loss because it set aside Rs 7,730 crore as provisions and contingencies in Q4 FY20 against only Rs 2,711 crore during the previous year. The steep rise in provision is partially due to COVID-19 related uncertainties, and a clear indicator of the times ahead.
    The CEO said that the retail part of the business was practically shut and that no one is borrowing. The bank said that it has set aside a sum of Rs 3,000 crore for any potential impact because of the COVID-19 pandemic.
    Axis Bank mentioned that 10-11 percent of customers asked for moratorium and it formed 28 percent in value of the total loan book.
    Axis Bank’s total advances are at Rs 5.7 lakh crore, which means that around Rs 1.6 lakh crore of loan book has asked for moratorium.
    The bank expects COVID-19 impact on economy and financial sector to be long drawn and thus remains cautious in its approach. Given the looming uncertainties, the bank has decided not to offer any forward looking guidance.
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