Axis Bank Adds ₹12.31 Billion Provisions on Crop Loans Following RBI Advisory, Sees No Future Provision Requirement

Image Source: CNBC TV18

Following an RBI advisory during its recent inspection, Axis Bank made an additional provision of ₹12.31 billion on two crop loan variants in Q2 FY26. The bank reported no divergence in asset quality during the RBI inspection and indicated no further provision additions are anticipated in upcoming quarters.

Axis Bank, one of India’s largest private sector banks, announced key updates related to its asset quality and provisioning status for the quarter ended September 30, 2025. A senior bank executive revealed that the bank made an additional provision of ₹12.31 billion against two crop loan variants due to a Reserve Bank of India (RBI) advisory issued during the quarter.

The provision was a one-time, standard asset provision meant to address risk concerns flagged by the RBI after its annual inspection for FY25. Importantly, the bank stated that these provisions are expected to be reversed once all outstanding crop loans under these variants are settled or concluded by March 31, 2028, or earlier if recovered ahead of schedule.

In a positive disclosure, the Axis Bank executive confirmed that the RBI’s inspection unearthed no divergence in the bank’s asset quality or non-performing asset (NPA) provisioning practices. This indicates robust credit monitoring and risk management within the bank’s crop lending portfolio.

Additionally, the bank noted there is currently no requirement to add further provisions in future quarters related to these crop loan products, signaling confidence in the existing provisioning buffer and borrower recoveries.

Axis Bank’s proactive approach aligns with its prudent risk management framework, maintaining adequate capital buffers while supporting agriculture sector credit needs. Crop loans remain a vital component of the bank’s retail lending segment, and maintaining asset quality is critical both for regulators and investors.

The bank continues to demonstrate resilience amid sectoral and macroeconomic challenges by embedding comprehensive monitoring and timely intervention strategies within its loan portfolio.

Key Highlights

Axis Bank made an additional ₹12.31 billion provision on two crop loan variants following RBI advisory.
The RBI’s annual inspection did not find any asset quality divergence or NPA provisioning lapses.
Provisions expected to be reversed upon full recovery or closure by March 31, 2028, at the latest.
No further provisions anticipated in forthcoming quarters for these crop loan products.
Signals strong risk control and credit monitoring in the agriculture finance portfolio.
Aligns with RBI’s strengthened regulatory emphasis on sector-specific loan quality.
Demonstrates Axis Bank’s commitment to prudent financial management and sector support.

Sources: Axis Bank Official Statement; Economic Times; CNBC-TV18; Financial Express.

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