Indian banks increase loan loss provisions amid West Asia crisis
With the West Asia crisis making things shaky for global trade, Indian banks are playing it safe by setting aside extra funds to cover possible loan losses.
Even though their finances looked solid at the end of fiscal 2026, rising costs, especially for exporters and small businesses, have pushed banks to boost their backup plans.
Axis Bank leads with ₹2,001cr provision
Axis Bank led the way with a one-time ₹2,001 crore provision, Axis Bank reported a gross NPA ratio of 1.23%, improving 17 bps sequentially.
Public sector banks like Union Bank, Indian Overseas Bank, and Indian Bank have also set aside hundreds of crores each as a cushion.
Federal Bank used ₹456 crore interest on an income tax refund to create a floating bad-loan provision.
Despite all this caution, most banks say they're still confident about the quality of their loans and overall financial health.