Axis Bank reported a 4% YoY decline in Q1FY26 net profit to ₹5,806 crore, driven by a sharp rise in provisions linked to a regulatory-triggered overhaul of its asset classification norms. The Reserve Bank of India had flagged lenient stress recognition practices, prompting the bank to tighten its NPA framework, especially in unsecured retail and small business loans.
Axis Bank’s unexpected spike in bad loans and provisions in Q1 FY26 that dented its profitability was not entirely the result of the bank’s own internal decisions. CNBC-TV18 has learnt that a regulatory intervention by the Reserve Bank of India (RBI) prompted the bank to revisit its asset classification and stress recognition practices, particularly in its unsecured retail and small business loan portfolios.
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