Banking Article, Banking Finance 2020, Banking Finance September 2020

“Survival of the fittest”- The Post Covid Business World


“Survival of fittest” is a biological concept that is given by the Charles Darwin in 1859 in his book “On the Origin of Species.” The concept we read as a Darwinian evolutionary theory. Despite it is a biological concept it is more relevant to the business & economy particularly at the time when world economy is struggling due to the severe impact of the Coronavirus pandemic outbreak all over the world. The severity of the impact can be estimated by the fact that the most developed economies like US, UK & Germany having a sound healthcare system & infrastructure, are struggling to save their lives & livelihood. Why it is more relevant to discuss this concept here because there is an urgent need to adopt the change to survive, for human beings, for businesses, for economies& for nations. People, need to adopt the different life style with taking extra care about their health & hygiene, business need to change their business model which is best suited to the current situations, economies need boosters to survive and nations need more investment in the healthcare industry to save the life of their nationals as an immediate step. There is all-around need for change and those who will adopt to change will survive.

Key Challenges faced by Businesses & Economies

With the pandemic bringing business & industries to a halt because of the nationwide lockdown in most of the countries, promoters are storming their brain how to continue the business in these circumstances. Whether we need to wait for government lift the lockdown or need to search some alternatives for survival? The business & industries those are having enough core strength to survive, that we call here as business immunity, they have a room to wait for lifting the lockdown. But many business particularly small retailers and the small-scale industries, those are employment intensive industries having a direct impact on overall economy, these cannot be put on hold for a long time. For this reason, governments in many countries has decided to relax the lockdown in steps. Indian government also has also decided to relax the lockdown with certain restriction to restart the business activities that are in hold after the nationwide lockdown.

The key challenges that the businesses are facing during the pandemic are-

  • Forming the strategies for moving forward in the restricted environment.
  • Adopting the business model with digital infrastructure.
  • Safety and wellbeing of their employees.
  • Keeping a healthy mind-set with all around negativity.
  • Keeping the workforce motivated & engaged.
  • Disruption in the supply chain.
  • Decrease in demand due to all around lock down.

Despite all these challenges, one thing is certain that the business must go on. Business & economic activities should continue and to ensure continuity, industries have been forced to reconsider their moves & strategies, forced to adopt new business model, forced to make themselves fit for survival and that is exactly Charles Darwin has said- “The concept of survival of fittest”.

The changing business Model: –

The industries such as retail, education, media & entertainment and information technology witness a sea change in their business model and in the way, they used to do the business. The use of digital infrastructure playing a major role. By the way of virtual assistance, the educational institute has started classes through digital platform.

Digital Infrastructure & virtual assistance– In the field of training & development also the virtual trainings are replacing the physical classroom training, where no movement of the students is required and simply by sitting at their home they can take the advantage of the online trainings. The online retail chains are now having an added advantage. They are already having an enough digital infrastructure, now with some relaxation in the lockdown they have started to supply the grocery and other ordered items on the apps and websites. In the Media& entertainment industry,OTT platforms like Hot Star, Netflix and Amazon Prime have seen a significant increase in usage. The media houses & the producers are presenting content through these OTT platforms and it is very popular also. The relaxation has not been given to multiplex yet, and the film industry is feeling pressure. At this point of time few producers have decided to release the films on OTT platforms. COVID-19 has enforced upon us a digital transformation. The IT industries have adopted the concept of Work from home and that model is best suited to the industry like information technology.

The feasibility check– Before adopting a business model it is very important to check the feasibility of that business model because the market conditions are changing continuously .The cost and benefit analysis is also having a great importance before adapting any business model. Business need to evaluate the impact on the sales & revenues with a new model.

Remote working and Work from Home (WFM) –Businesses are facing the challenges fromensuring safety of employees for restoring of the supply chain. They have to seek possibilities of remote working with the help of technology and digital infrastructure. The organizations, those who had enough digital infrastructure before the Covid 19, they can perform better than their peers and the companies. Those who do not have a digital infrastructure with online presence, are struggling. Since, it is difficult to predict how long this epidemic will last, it is important to be prepared for all scenarios. Businesses need to make alternative plans and reconfigure the business strategy to reduce the expenses.

But problems are common for all, we need to think out of the box to make the things happen for immediate business continuity. Again, we have to learn the lessons to prepare our self for post Covid business world.

The immunity check of business: –

In the human body, immune system fights many of the harmful infections & diseases so that the body can function normally. Similar to human body, businesses too has immune system. The immune system of an organization is developed by the system, procedures and the mind-sets.  The immunity of the business refers to the inner core strength of business that protect the business in difficult times. The continuity of the business largely depends on the immunity of the business.

How to develop immunity in business– The ingredients that develop the immunity in business differs from business to business, it may be the capital infused, it may be the technical know-how of the business, it may be the market and it may be the business model of that particular business. The question here is that how compatible the business is, in such type of pandemic conditions and which factors are going to support your business. Now one thing that we have learnt here during this coronavirus pandemic is that the business should be enough immune to face such type of shock. In this difficult time when all the super markets and malls are closed the small kinara shops performed well to fulfil the public daily need. Similarly, when the big factories are on hold, the small business that can be handled from home, have performed well. Digitalization and the automation are another way to enhance the immunity of the business. Wherever the automation can be done, it should be. Wherever the digital infrastructure is needed, it should be provided. Now businesses need to immunize themselves against future shocks.

Digital customer Interaction-Covid 19 has changed the way we were interacting with our customers. Social distancing & work from home has become the norms now and we have to deal and interact with customers within these norms only. Virtual assistance & online support now have become the way that how we deal with the customers. Employees of the various organization also need to be reskilled with the ability to work in this digital environment. A continuous and lifelong learning has now become the need. Here too, the mind-set& attitude of the employees plays an important role to make them ready to work within the changing environment.

When any organization is going to implement change and going to adapt new business model for survival, the immune system of the organization plays very important role. Their core strength & know how, their digital infrastructure and the mind-sets of the employees are the key drivers in the process of transformation. How immune the organization is, decides the survival of the organization.

The Invest India Business Immunity Program of Indian Government– The government has also been trying to infuse immunity by way of various stimulus packages to save the businesses. Government has launched Invest India business immunity platform. It is the platform which provides the real time information to the business & investors about the various initiatives related to India’s fight against the coronavirus pandemic. It is a much needed and very important initiative in this difficult time for business and investors. This platform also provides the information related to business decision taken to help various sectors of the economy by the concerned ministries. This also provides various solutions related to business like how to protect workforce from coronavirus and supply of goods and services. These initiatives of the government will help businesses to turn around and come out from this crisis with more inner strength and more immunity.

Creation of supportive environment by the government-

The Government Initiatives– Government of India has announced Self –reliant Movement (Atmanirbhar Bharat Abhiyan) to boost the business & economy, which focuses on Economy, Infrastructure, system, Vibrant demography and demand. A comprehensive package of Rs. 20.97 lack croreshave been announced to cater to various sections including cottage industry, MSMEs, labourers& middle class. Many initiativeshave been taken by the Government and Reserve Bank of India to boost the business (including MSMEs). It includes

  • 3 lakh crore collateral free automatic loans for business, including MSMEs,
  • Rs 20,000/-crore subordinate debt for MSMEs
  • Rs 50000/- equity infusion through MSME fund of funds.
  • Global tender to be disallowed up to Rs 200 cores.
  • 2500 cores EPF support for business and workers for 3 more months.
  • EPF contribution reduced for business & workers for 3 months- Rs 6750/-
  • Rs 30000/- crores liquidity facility for NBFC/HCs/MFIs
  • Rs 90000/- crore liquidity injection for DISCOMs
  • Rs 50000/- crore liquidity through TDS/TCS reductions

Under Rs 3 lack crore collateral free loans Emergency credit line guarantee scheme (ECLGS) has been announced which is being provided by The National Credit Guarantee Trustee Company to Banks, NBFCs and Financial Institutions. According to this scheme eligible businesses including MSMEs, get a pre-approved sanction limit of up to 20 % of loan outstanding as on 29th February 2020. This is in the form of additional working capital term loan facility. This scheme will help small businesses to come out from the impact of Covid 19.

Support from Banking -Banking is life line of any economy. It provides support to business & economy when it is actually needed. In the difficult time of Coronavirus pandemic, the role of banking has become more significant.

RBI has also announced that banks and other lending entities, including nonbanking finance companies and microfinance companies, are permitted to pass-on the relief as forbearance measure due to precarious situation of COVID-19 to borrowers. It includes three months moratorium on payment of instalments for term loan, deferment of interest payment for three months for working capital loans, easing of working capital finance, classification as special mention account (SMA) and some relief in credit card operations.

One thing is certain from the above discussion is that the government and Reserve Bank of India has taken all the steps which are necessary to boost the immunity in the business. Now the roles of banks have become more important to pass the benefit to the actual beneficiary including business and MSMEs.

Digital Lending Infrastructure-Indian banks now have enough digital infrastructure & they are providing almost all the banking products through digital channels whether it’s an asset product or the liabilities product. Various digital initiative for the government and RBI has been taken as far as the banking products are concerned. It includes

  • TReDS-Trade receivable bill discounting platform
  • E Way bill system
  • Psbloanin59minutes .com
  • Udyamimitra portal
  • Vidyalaxmi portal for education loan

These platforms are providing enough digital lending infrastructure for the needy business enterprises. With the ongoing pandemic stress, we can observe that the digital channels are the better option to deliver the transactions and services. The offline transactions have significantly reduced because the physical currencies may be a carrier of virus. With the help of the QR code-based payment system, internet banking, points of sales terminal, cards, mobile banking and the mobile wallets people are doing their transactions and enjoying banking services.

Challenges before Banking-On the other hand, when there is a slowdown in the economy, banks cannot be untouched by the adverse effect of the Covid 19. Banks are going to face number of challenges during Covid and post Covid period. Low credit growth, increasing NPAs, low NIM and shrinking CASA will be the key challenge before the banking industry. Before Covid period also banking industry was under pressure because of many incidents that happened including the NBFCs and Yes bank crisis.

The dual responsibility of banking– Banking is having dual responsibilities, one they have to maintain their internal immunity and on the other hand, they have to work as a blood for the economy and business by continuous credit flow. The responsibilities of the banking are huge to be redesigned and reshaping the business and economy. The business may have a very good strategies to transform their business model &to stand again, but it requires funding and here the role of banking comesinto picture. Banks may face difficulties to apprise the business proposal amid all negative waves because of the Covid 19 pandemic, but the trust & support from the government side will support the decision-making capabilities of the bankers.

We know that this phase is critical for banking as well. They have to adopt new ways of working for ensuring the safety of the employees, help the business and pass the benefits as announced by the government and the RBI and also their own business continuity. They have to emerge stronger than earlier with the transformation in their system & procedure with the help of technology and automation. The good thing is that the Indian banking industry is already on the path of transformation because of the government push towards cashless economy and the various government measures including PCA framework, EASE reforms, Merger and Amalgamation of the public sector banks and the capital infusion in the banks.

Amidst the challenges and opportunities, the banking industry in India is performing its role as an immunity booster for individuals, for society, for business and economy and also for nation.

Business Continuity plan: –

Amidst all turbulence in the environment one thing is certain “The business must go on”. It has to be continued for survival. Thenovel coronavirus pandemic has compelled business to think over the strategy and plan for revival. It includes preventive measures to reduce the impact of disaster. The focus should be to bring the business back to normalcy with least delay and cost. Itrequirescontinues immunity check and immunity boosters at regular intervals when needed. Now businesses are reviewing whether their strategies remain fit in this situation or they need correction in their course of action pertaining to technological advancement, customer handling and employee behaviour and supply chain resilience.

The business and organisation need to prepare a sustainable plan which includes minimal disruption in the service, safety &well-being of employees and supply chain & delivery infrastructure. The cybersecurity standard is another important area because of the shift towards the digital platform. Among all these factors,inspiring & motivating the employees is another important aspect because in this changing business environment it is very important for the employeesto adopt the changes in system and procedures.

The way Forward-Businesses need to be fitter than earlier to survive in tough situations. Businesses needto follow a well-defined strategy which includes-

  • An immunity checks to identify the core & inner strength of the business.
  • To transform the business model that is feasible to the current scenario of Covid 19.
  • Adaptation of the digital infrastructure and automation.
  • Review the business continuation policy & procedure.
  • Take support for the Government and RBI initiatives.
  • Design the framework forthe wellbeing of the employees.
  • Approach the customer base by various digital means.
  • Maintaining the healthy relationship with business partners.
  • Inspiring & motivating the workforce to adopt the changes.


The strategy time is almost over, the Unlocks-1 has been announced in India and it the time to implement the strategies. As in the slack time, we sharpen our axe to use it later, now businesses have to start their transformational journey after lockdown is over.

Those who are fit enough will survive & grow, those who are not, need to increase their immunity to save themselves for such type of pandemics in future. It is not only applicable in businesses and organizations it is applicable to economies as well. The inner strength of the economy, the immunity booster by the government and the central bank plays the key role. One thing is certain the Indian economy has a sufficient immunity to fight against situation that aroused due to coronavirus pandemic and the Government & RBI are leaving no room to provide the boosters. Our domestic demand is our strength, our young population is our strength, our agriculture, our forest is our strength, and our well regulated financial sector is our strength. With these immunity boosters our businesses will be fit and will survive. Our economy will grow, our nation will flourish.

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