Bank provisioning at 3-year low on better recoveries, asset quality (opens original article in a new tab)

Bank provisioning reached a 3-year low in Q1 2026 due to improved asset quality and better bad loan recoveries, with private sector banks showing significant declines in provisioning compared to public sector banks.

• Loan loss provisioning by banks dropped to a 12-quarter low in Q1 2026
• Private sector banks saw 17.4% sequential and 23.5% year-on-year decline in provisioning
• PSBs had 27% sequential increase but 20.4% year-on-year decrease in provisioning
• CARE Ratings noted gross NPA ratio fell to 1.8% in March 2026 quarter