The bank offers a comprehensive suite of banking products and services, catering to a diverse clientele. Its operations are broadly segmented into several key areas: corporate banking, commercial banking, branch and retail banking, retail assets, and treasury and financial markets operations. This diversification allows RBL Bank to serve a wide range of customers, from large corporations to individual consumers.
Latest News on RBL Bank
Financial strain and deteriorating loan portfolios threaten the stability of small microfinance institutions
India’s microfinance sector is facing a severe crisis, with at least half a dozen companies defaulting on bank loans due to asset quality stress and funding crunch. These companies, including VFS Capital, Navachetana Microfin Services, and Arth Finance, are struggling to survive due to a liquidity crunch and difficulties in operating without institutional funding support. The sector’s stress began building in April last year, after a brief revival from the pandemic, and has resulted in a significant increase in late-stage portfolios at risk, with a surge to 15.32% at the end of the September quarter.
The micro-loan market has contracted to ₹3.46 lakh crore, registering a 17% year-on-year drop, with a near 20% fall in the number of active loans to 132 million. Listed microfinance firms, such as Fusion Finance and Spandana Sphoorty Financial, have suffered net losses in the second quarter, extending the run of negative earnings they reported over the past several quarters. Mainstream lenders, including Bandhan Bank, IndusInd Bank, IDFC First Bank, and RBL Bank, have also encountered profitability hits due to the stress in their microfinance portfolios.
VFS Capital, which has a cumulative exposure of ₹143 crore toward five lenders, failed to meet its repayment commitments, with a total overdue amount of ₹82 crore. The company had applied for a small finance bank licence from the Reserve Bank of India (RBI) in January but withdrew it last month after its financial condition worsened. Other affected lenders, including Bank of Maharashtra and IDBI Bank, have told VFS to submit financial statements and a certified book debt statement for the quarters ended June and September.
The situation is similar for Navachetana Microfin Services, which has delayed debt servicing since April and submitted a debt restructuring plan to lenders with the proposal to repay the dues in the next seven years. Some of the company’s loans from banks have already turned into non-performing assets (NPAs) by legal definition. Lenders to these entities have suggested forensic audits to determine the cause of the default and to consider restructuring of bank accounts.
Sectoral leaders are calling for financial institutions to become more lenient while lending to smaller microfinance entities and are expecting the government to consider a proposal to provide a guarantee fund for the microfinance sector. Without institutional funding, several other small lenders are likely to be on the brink of default very soon. The government guarantee programme can facilitate lending to these entities and help them overcome the current liquidity crisis.
Kotak Bank finalizes assessment of IDBI acquisition.
Kotak Mahindra Bank has reportedly completed its due diligence process to acquire the government’s stake in IDBI Bank, making it a strong contender in the race to take over the bank. The due diligence process involved reviewing confidential information such as borrower data, exposure, and loan provisions to assess the bank’s financial health. With Kotak Mahindra Bank’s entry, the competition becomes more interesting, as two global players, Oaktree Capital Management and Fairfax Financial, have already completed their due diligence.
Fairfax Financial already owns a 40% stake in CSB Bank, while Emirates NBD may no longer be in the race after its recent acquisition of RBL Bank. Kotak Mahindra Bank could become the front runner in the race for IDBI Bank, as it is the only domestic contender to buy the government’s stake. The government and Life Insurance Corporation (LIC) hold 94% in the bank, and the transaction could involve acquiring a majority stake of up to 60.72%.
The government aims to finalize the winning bidder by the end of FY26, with the deal potentially valuing IDBI Bank around $8-10 billion. The bank is in advanced discussions with government-appointed advisers, and final financial bids are expected to be invited in the coming quarter. The government first announced its intent to divest IDBI Bank in February 2021, and the formal process began in October 2022, when the Department of Investment and Public Asset Management (DIPAM) invited expressions of interest (EoIs) for the bank’s strategic sale.
By January 2023, DIPAM confirmed it had received multiple EoIs, and around September, four shortlisted bidders who cleared the Reserve Bank of India’s ‘fit and proper’ assessment were granted access to the data room, initiating the buyer due diligence phase. Kotak Mahindra Bank’s spokesperson declined to comment on the development, stating that they would revert with an update if any. The acquisition of IDBI Bank is expected to be a significant deal, and the government is keen to finalize the process by the end of FY26.
The company’s profit has declined by 20% year-over-year, reaching ₹179 crore.
RBL Bank has reported a 20% year-on-year decline in its net profit for the quarter ended September 2025, with a net profit of ₹178.5 crore, missing the estimated ₹209 crore. This decline is despite a 4% increase in the bank’s net interest income (NII) to ₹1,550.7 crore, which marginally exceeded expectations. The bank’s core banking operations are still generating more income than before, but its profitability has taken a hit over the past year.
The bank’s asset quality has improved sequentially, with the gross non-performing assets (GNPA) ratio falling to 2.32% from 2.78% in the previous quarter. The net NPAs, however, rose marginally to 0.57% from 0.45%. In absolute terms, the gross NPAs declined to ₹2,377.6 crore from ₹2,685.9 crore, while the net NPAs increased to ₹572.4 crore from ₹428.8 crore.
The provisions for the quarter stood at ₹499.7 crore, which is higher than the previous quarter’s ₹442.3 crore but lower than the ₹618.3 crore recorded a year ago. The bank’s net profit for the same quarter last year was ₹223 crore, indicating a significant decline in profitability.
Despite the decline in net profit, the bank’s NII growth is a positive sign, indicating that its core banking operations are still generating income. However, the bank needs to focus on improving its asset quality and reducing its provisions to improve its profitability. The decline in net profit is a concern, and the bank will need to take steps to address this decline and improve its overall performance. Overall, RBL Bank’s results are a mixed bag, with some positive signs, but also areas that need improvement.
Stock Market Updates of RBL Bank
Recent Updates
Ten major banks are set to unveil their Q2 financial reports this Saturday, October 18, offering a glimpse into their performance.
On October 18, 10 banks in India, including both private and public sector lenders, are set to announce their September quarter earnings. The list of banks includes HDFC Bank, ICICI Bank, YES Bank, Punjab National Bank, IDFC First Bank, IndusInd Bank, IDBI Bank, The Federal Bank, RBL Bank, and J&K Bank. Other notable companies that will announce their Q2 earnings are UltraTech Cement, UTI AMC, SML Isuzu, and Can Fin Homes.
Analysts expect the Q2 earnings for India Inc. to rebound after a muted Q1, supported by a mix of cyclical and structural factors. The financial sector is expected to be a key driver of overall earnings growth. Banks and non-banking financial companies (NBFCs) are benefiting from steady credit demand across retail, agriculture, and MSME segments, while asset quality has remained stable. Despite slight pressure on net interest margins, profitability is being supported by healthy loan growth, controlled slippages, and recoveries from past stressed accounts.
In terms of asset quality, analysts expect a comfortable outcome for large banks, with private banks appearing to be more comfortable lending aggressively in unsecured segments such as credit card and personal loans. Mid-size banks are expected to see improvement in microfinance asset quality, although credit costs will remain elevated. The focus will be on forward flows in early delinquency buckets and X bucket collection efficiency.
Regarding margins, most analysts believe that margins have bottomed out in Q2FY26, but the decline will be limited for mid-size banks. Public sector banks are expected to witness relatively lower QoQ margin decline, while large private banks are expected to see a sharper decline. The net interest margin (NIM) for Axis Bank, which has already announced its Q2 earnings, came in at 3.73% for the quarter. The bank reported a 26% decline in standalone net profit to ₹5,089.64 crore annually for the quarter ended September 2025.
Overall, the Q2 earnings announcements are expected to be closely watched by investors, with a focus on asset quality, margins, and profitability. The financial sector is expected to be a key driver of overall earnings growth, and the performance of the banks will be closely monitored.
Bandhan Bank, Equitas SFB, AU SFB, and Axis are expected to experience a decline in net interest margin, while RBL Bank is likely to defy this trend, according to a Q2 preview.
The second quarter (Q2) preview for several Indian banks suggests that Net Interest Margin (NIM) may decline for most of them, with RBL Bank being an exception.
Bandhan Bank’s NIM is expected to fall due to a rise in cost of funds and a marginal increase in yields on advances. The bank’s focus on granular deposits and its efforts to diversify its loan book may not be enough to offset the decline in NIM.
Equitas Small Finance Bank (SFB) is also likely to see a decline in NIM due to an increase in the cost of funds and a higher proportion of low-yielding assets. The bank’s strategy to expand its reach and improve operational efficiency may take some time to yield results.
AU Small Finance Bank (SFB) may experience a decline in NIM due to a rise in funding costs and a moderate increase in yields on assets. The bank’s efforts to improve its asset quality and reduce its cost-to-income ratio may not be sufficient to offset the decline in NIM.
Axis Bank’s NIM is expected to fall due to a rise in the cost of funds and a moderate increase in yields on advances. The bank’s focus on improving its asset quality and expanding its reach may not be enough to offset the decline in NIM.
On the other hand, RBL Bank is expected to be an outlier, with a potential increase in NIM due to a decline in the cost of funds and a rise in yields on advances. The bank’s efforts to improve its asset quality and expand its reach may yield positive results.
Overall, the Q2 preview suggests that most of these banks may face a decline in NIM due to various factors, including a rise in funding costs and a moderate increase in yields on assets. However, RBL Bank’s ability to manage its costs and improve its asset quality may help it stand out from its peers.
It’s worth noting that these predictions are based on current trends and may be subject to change based on various factors, including changes in the economic environment and the banks’ individual strategies. The actual performance of these banks may differ from the predicted outcomes.
The Q2 results will provide more clarity on the performance of these banks and the trends that may shape their future growth. Investors and analysts will be closely watching the results to gauge the impact of the current economic environment on the banking sector.
In conclusion, the Q2 preview for these Indian banks suggests a decline in NIM for most of them, with RBL Bank being an exception. The actual performance of these banks will depend on various factors, including their ability to manage costs, improve asset quality, and expand their reach.
Bandhan Bank, Equitas SFB, AU SFB, and Axis are expected to experience a decline in Net Interest Margin (NIM), while RBL Bank is likely to be an exception: Q2 preview
Motilal Oswal Financial Services (MOFSL) forecasts that the September quarter (Q2FY26) will mark the bottom for the banking sector’s net interest margins (NIMs), with profitability expected to recover gradually in the second half of the year. This recovery will be driven by deposit repricing and the phased Cut in Cash Reserve Ratio (CRR). According to MOFSL, credit growth remains modest, with system-wide credit growth standing at 10.3% year-on-year as of September 5, 2025. The brokerage expects systemic loan growth to sustain at 11% in FY26E and improve to 12.5% in FY27E, aided by a pickup in consumption from GST rate cuts, income tax relief, and lower borrowing costs.
MOFSL notes that system deposit growth held steady at 9.8% year-on-year in September, despite rate cuts. However, banks continue to face challenges in mobilizing low-cost Current Account and Savings Account (CASA) deposits. The moderation in policy rates has led to reductions in both savings and term deposit rates, which should lower the cost of funds in the second half and aid NIM recovery.
The brokerage expects sharper NIM declines for certain banks, including Bandhan Bank, Equitas SFB, AU SFB, and Axis Bank, while RBL Bank could see a slight improvement. Stress remains in unsecured retail segments, such as microfinance and credit cards, though collection efficiencies are improving. Select segments, including micro-LAP, CV loans, and affordable housing, are also showing signs of stress, with additional risks from recent floods in northern and eastern states.
For Q2FY26, MOFSL estimates a decline in Net Interest Income (NII) for its coverage universe, with a 0.9% year-on-year decline and a 1.8% quarter-on-quarter decline. Pre-Provision Operating Profit (PPoP) is projected to fall 5.5% year-on-year and 14% quarter-on-quarter, while Profit After Tax (PAT) is expected to decline 7.2% year-on-year and 4.5% quarter-on-quarter. However, the brokerage sees earnings traction building from the second half of FY26, leading to a 17.7% PAT Compound Annual Growth Rate (CAGR) over FY26-28E.
In terms of specific bank performance, MOFSL forecasts that private banks’ PAT will fall 7.3% year-on-year in Q2, with NII growth muted at 0.6% year-on-year. Public Sector Undertaking (PSU) banks’ PAT is projected to fall 7.1% year-on-year, driven by NIM compression and lower treasury gains. Small Finance Banks are expected to face persistent NIM pressure in Q2, while fintechs and payments companies, such as SBI Cards and Paytm, are expected to report strong growth. Overall, MOFSL expects the banking sector to recover gradually in the second half of the year, driven by deposit repricing and the phased CRR cut.
Rollover of Nifty futures dips below 6-month average, with RBL, PPL, Federal Bank, and Tata Power emerging as top gainers.
In a recent analysis of market trends, the textiles sector stood out as the only area showing increased rollover activity. This indicates a positive sentiment or momentum specific to this sector. Rollover activity refers to the practice of carrying over existing positions from one expiry period to the next, which can be an indicator of investor confidence or enthusiasm in a particular sector.
On the other hand, several key sectors experienced lower rollover rates, signaling a more cautious approach or potential shifts in investment priorities. These sectors include chemicals, new age, telecom, cement, and technology. Lower rollover rates in these areas may suggest that investors are becoming more selective, choosing to exit or reduce their positions rather than carrying them over into the new expiry period.
The decrease in rollover activity in these sectors could be attributed to various factors, such as changing market conditions, regulatory developments, or shifting investor sentiment. For instance, the technology sector, which has been a major driver of market growth in recent years, may be experiencing a period of consolidation or rotation as investors reassess their positions.
The chemicals sector, which is heavily influenced by global demand and supply chain dynamics, may be facing headwinds due to factors such as trade tensions or fluctuations in raw material prices. Similarly, the telecom sector, which is characterized by intense competition and regulatory pressures, may be experiencing a period of caution as investors wait for clarity on key issues such as spectrum allocation or tariff structures.
The cement sector, which is closely tied to the construction and infrastructure industries, may be facing challenges due to factors such as slowing demand or increasing competition. Meanwhile, the new age sector, which encompasses emerging industries such as e-commerce or fintech, may be experiencing a period of adjustment as investors reassess their growth prospects and valuations.
Overall, the contrasting trends in rollover activity across different sectors suggest that investors are adopting a nuanced approach, selectively choosing to maintain or increase their positions in areas with strong momentum, while exercising caution in sectors where sentiment is more subdued. As the market heads into a new expiry period, it will be interesting to see how these trends evolve and whether sector-specific momentum can be sustained.