Banks are proactively strengthening their balance sheets by creating floating provision buffers. (AI Generated Image) Amid the ongoing West Asia crisis, the banks in India are proactively strengthening their balance sheets by creating floating provision buffers. The move aims to mitigate potential credit risks. In its quarterly results announcement, the Axis Bank took the lead with Rs 2001 crore one-time precautionary provision. The announcement came even as bank's gross non-performing assets ratio improved 17 basis points sequentially to 1.23% at the end of March. Axis Bank managing director Amitabh Chaudhry said, "In an environment marked by uncertainty and volatility, our conservatism is our strategic advantage. We tried to strengthen the foundation and enhance our resilience." Union Bank of India set aside Rs 700 crore one-time standard asset provision while Indian Overseas Bank and Indian Bank made additional provision of Rs 400 crore and Rs 300 crore respectively Another private sector lender, Federal Bank, has earned Rs 456 crore interest on income tax refund. The bank has used the amount to create floating bad loan provision without specifically earmarking it for war impact. Further, among the public sector lenders, Union Bank of India set aside Rs 700 crore one-time standard asset provision. Asheesh Pandey, Union Bank of India Managing Director, during the results call told that this additional provision would be used against any eventuality, either to cover risks arising due to the war or to cover the requirement for expected credit loss-based provisions. Indian Overseas Bank and Indian Bank also made additional provision of Rs 400 crore and Rs 300 crore respectively. The Reserve Bank of India (RBI) on the impact of the Iran War on the Indian economy has said, “The Indian economy continues to hold its ground despite facing a major supply shock due to the conflict in West Asia.” The key external sector vulnerability indicators, viz., external debt-to-GDP ratio, net international investment position (IIP) to GDP ratio, and debt service ratio, remained contained at end-December 2025, RBI said. Get Latest News Live on Times Now along with Breaking News and Top Headlines from Business, Economy and around the World. Vikas Kumar is Deputy Editor (Business) at Times Now driving coverage across policy, economy and markets. He possesses nearly a decade of experience i... View More