Mapping the 170 districts designated as COVID-19 hotspots with the Reserve Bank of India disaggregated data on credit reveals that these hotspot districts account for almost 80% of the total credit outstanding of scheduled commercial banks.
As per the data compiled by RBI, the 170 districts that have witnessed large outbreaks had a total credit outstanding of Rs. 79.84 lakh crores, which accounted for 79.3% of the total credit outstanding of Rs. 100.68 lakh crore reported by the scheduled commercial banks as of December 2019.
Districts that have been categorized as hotspots include Mumbai, 10 of the 11 districts of Delhi, Mumbai Suburban, Bengaluru (U), Chennai, Hyderabad, Kolkata, Ahmedabad, Pune, Jaipur and Gurgaon among others. The top 10 districts alone account for Rs. 53.2 lakh crore of credit outstanding or around 53% of the total outstanding of SCBs.
According to economists, since business activity in the districts categorized as hotspots is likely to remain subdued, the impact on the economy will be severe.
However, the head of a mutual fund said that, the data might be misleading to some extent as many companies have only their headquarters in large cities, and so not all the credit outstanding will come under stress.