NPA provisions fall 27.3% year-on-year as banks slash loan loss buffers
Indian banks reduced non-performing asset provisioning by a record percentage in June 2026, with aggregate figures dropping to over ₹21 trillion as corporate debt quality improves.
The aggregate loan loss provisioning by Indian banks fell by 27.3% year-on-year in the June 2026 quarter, reaching ₹21,314 crore. This represents a second consecutive quarter of double-digit reductions driven by improving asset quality and fewer fresh loan slippages. For the sample of 29 banks tracked, 23 reported lower provisioning than the previous year, the highest count since March 2022. Public sector banks saw provisions drop to ₹10,717 crore while private sector banks reduced their buffer to ₹10,597.5 crore. State Bank of India recorded the sharpest decline at 31.9%, lowering its reserves to approximately ₹3,800 crore from the prior year level. Overall corporate debt quality has gradually improved over five years, reflected in the CareEdge Debt Quality Index rising to 97.2 in July 2026 compared to 90 levels seen five years ago.
