**ICICI Bank Reports Q3 Net Profit Decline Amid RBI Provisions**
ICICI Bank, the second-largest private-sector lender in India, announced a net profit of ₹11,318 crore for the quarter ending December, marking a 4% decrease year-on-year. This decline was primarily attributed to a provision mandated by the Reserve Bank of India (RBI), which impacted the bank’s overall earnings and led to results falling short of analyst expectations. Analysts surveyed by Bloomberg had predicted a 6% increase in net profit, estimating it at ₹12,493 crore.
The bank disclosed that following the RBI’s supervisory review for FY25, it was instructed to set aside an additional ₹1,283 crore for its agriculture priority sector loan portfolio. Sandeep Batra, an executive director at ICICI Bank, indicated that the affected loan book ranges between ₹20,000 and ₹25,000 crore, representing approximately 24-30% of its rural loan portfolio as of December 31.
Batra explained that the RBI conducts an annual inspection, and this year’s assessment revealed that certain terms of the facilities did not fully comply with regulatory requirements for priority sector lending (PSL). Under RBI guidelines, banks are required to allocate 40% of their total credit to sectors such as agriculture, small businesses, education, and renewable energy.
Despite the additional provisions, Batra reassured stakeholders that there would be no changes in asset classification or borrower repayment behavior. He emphasized the bank’s commitment to ensuring that the loan portfolio aligns with PSL guidelines and minimizing the impact of provisioning.
In a related development, ICICI Bank’s board has decided to extend the tenure of current CEO Sandeep Bakhshi by two years, following the completion of his existing term in October. This extension is subject to approval from the RBI and shareholders. Batra noted that the board, in consultation with the managing director, opted for a two-year term, which he believes is effectively similar to a three-year term given the timing of the reappointment.
As the market anticipates further clarity on Bakhshi’s leadership, the bank continues to navigate regulatory challenges while maintaining a focus on loan quality and compliance.
**FAQ**
**What factors contributed to ICICI Bank’s profit decline in Q3?**
The decline in ICICI Bank’s profit was primarily due to a ₹1,283 crore provision mandated by the RBI for its agriculture priority sector loan portfolio, which affected the bank’s overall earnings.