Banks see sharp rise in bad loan recoveries in Q2

ICICI Bank, Axis Bank, State Bank of India and Punjab National Bank (PNB) have all reported a sharp rise in bad loan recoveries in the second quarter, largely due to improvement in retail collections that had fallen sharply in the first quarter through the second wave of Covid 19.

Bankers and analysts said the improvement in recoveries is another indicator of improving consumer sentiment and is a start of better asset quality for banks in the immediate future.

“Two things have happened in the last quarter – one is that recoveries from large corporate bad loans are catching up like we saw with the completion of the DHFL resolution,” said Rajiv Anand, deputy managing director at Axis Bank.