Recoveries and upgrades of commercial banks declined to Rs 29,000 crore in the quarter ended September (Q2FY27) from Rs 33,000 crore in the year-ago period. Sequentially, they were higher compared with Rs 27,000 crore, according to CareEdge Ratings.
Private lenders saw a dip in upgrades and recoveries, from Rs 18,000 crore in Q2FY26 to Rs 14,000 crore in Q2FY27. For public sector banks (PSBs), they were flat at Rs 15,000 crore.
ALSO READ
Write-offs knocked out from books after making full provisions, declined to Rs 22,000 crore for the quarter under review, from Rs 28,000 crore in the same quarter last year. For private lenders, the figure fell from Rs 18,000 crore to Rs 13,000 crore. PSBs reported write-offs worth Rs 9,000 crore in Q2FY27 against Rs 10,000 crore in Q2FY26. Fresh slippages were lower at Rs 44,000 crore, compared with Rs 49,000 crore a year ago. Sequentially too, they fell from Rs 50,000 crore in Q1FY27.
Since the legacy non-performing assets (NPA) clean-up is largely complete, FY27 will be about containing fresh stress and preparing for ECL, the agency said. With restructured books shrinking and gains from resolving old accounts fading, the asset quality will increasingly depend on how well banks manage unsecured retail, agriculture and small-ticket MSME loans. Under the expected credit loss (ECL) regime, banks will also have to provide for early stress well before it turns into NPAs, it added.
STORIES YOU MAY LIKE
ALSO READ
Vineet Jain, senior director, CareEdge Ratings, in a statement said bank asset quality kept improving in Q2FY27. The gross NPA ratio fell to 1.54% from 2.07% a year ago. The net NPA ratio reached a record low of 0.34%. The asset quality is expected to stay broadly stable in FY27. The weak monsoon is the main risk for agriculture loans, and bad loans in agriculture could rise in FY28.
Read Next
This article was first uploaded on November ten, twenty twenty-six, at ten minutes past ten in the night.
© The Indian Express (P) Ltd
