The havoc created by the world-wide pandemic COVID-19 toppled the complete economic status of the world. Perhaps the most tragic period of history human has ever seen. Whether it's developing country, under-developed or world's most powerful economy for that matter, no country escaped safe from its brunt. The economy has been extremely affected due to COVID-19 Pandemic. Reserve Bank of India; the Apex bank of India made necessary changes with the help of expert in their policy for facing COVID19 pandemic. Entire Indian Banking sector faced and continue to face many challenges such as liquidity issue, Reserve Bank Of Indian reduced REPO rate to name a few. Since people are struggling to receive income, Reserve Bank of India decided to provide concession for paying EMI from customer by increasing the period for re-payment. The objective of the research paper is to study the changes RBI bought in its policy due to COVID-19 and also in general how COVID-19 has impacted the Indian Banking Sector. Further the solution is proposed for Indian Banking system to tackle the losses due to COVID19 Pandemic. The research found that Indian Banking system has added various measures due to COVID-19 Pandemic to make Banking system smooth and effective. Most of the Indian Banks were facing the problem of NPA, Non recovery of loan, customer frauds, Bad Loans etc. and to add on to it COVID-19 has expedited the collapse of Indian Banking business. No doubt banks are established in India with a fundamental purpose to make profit by giving expected comfort to customers. But Covid19 has changed the scenario of Indian customers. Due to shut down of businesses income source of the people came to halt. Then where lie the scope of availing loan and repaying with interest. These challenges our Indian banks are facing in current pandemic situation.