The Reserve Bank of India has identified significant compliance deficiencies in priority sector lending at two major private banks, directing them to make substantial additional provisions following annual supervisory reviews. The regulatory action highlights ongoing scrutiny of agricultural loan classification practices across the banking sector.

Provision Requirements and Regulatory Directives

The central bank has mandated specific provision amounts for both institutions to address portfolio compliance gaps:

ICICI Bank faces the larger provision requirement, with the RBI identifying misclassification in the agriculture portfolio amounting to ₹20,000.00-25,000.00 crore. Some of these loans date back to 2012, indicating long-standing classification issues that have now come under regulatory scrutiny.

Scale of Finance Compliance Issues

The regulatory action centers on banks' adherence to the official scale of finance, which defines credit requirements for specific crops, land sizes, and regions. HDFC Bank Chief Financial Officer Srinivasan Vaidyanathan acknowledged the need for operational changes during an earnings call, stating the bank must "operate in a model that is acceptable to the regulator."

The scale of finance framework covers essential agricultural inputs including:

• Seeds and fertilizers
• Labor costs
• Irrigation requirements
• Regional crop-specific needs

Only lending within these prescribed limits qualifies as agricultural credit for priority sector lending purposes, which carries regulatory benefits such as priority sector status and lower risk weights.

Market Impact and Expert Analysis

Market participants emphasize that the additional provisioning reflects regulatory enforcement rather than underlying asset quality deterioration. Ashutosh Mishra, head of institutional equities research at Ashika Stock Broking, characterized the provisions as "effectively a punishment in the form of additional capital set aside" despite the absence of provisioning gaps.

Prakash Agarwal, partner at Gefion Capital, noted that the RBI has required a 5.00% provision on the affected exposures. These provisions stem from specific regulatory directives rather than existing norms and are expected to be reversed as the loans are recovered or run down.

Broader Regulatory Scrutiny

The RBI has intensified oversight of agricultural loan classification, particularly targeting borrowings partly used for non-farm purposes. Banks are now required to tighten classification standards by ensuring only credit meeting genuine farm requirements receives agricultural lending treatment.

ICICI Bank Executive Director Sandeep Batra explained that the bank must make standard asset provisions "in respect of a portfolio of agricultural priority sector credit facilities where the terms were found to be not fully compliant with regulatory requirements."

Historical Context and Future Outlook

Similar supervisory exercises have affected other major lenders, with Axis Bank undergoing comparable scrutiny during the June quarter of the previous year. That institution clarified the impact was largely technical in nature, confined to specific product categories including cash credit and overdraft facilities.

Both HDFC Bank and ICICI Bank have indicated plans to address documentation gaps and regulatory formalities to ensure proper loan classification in future cycles. The banks expect to rectify compliance issues to bring their portfolios in line with priority sector lending norms, potentially allowing for reclassification of affected loans as agricultural credit in subsequent regulatory reviews.

Bank of India has announced its earnings call with analysts and investors to discuss the unaudited financial results for the third quarter ended December 31, 2025. The public sector bank issued the notification on January 16, 2026, in compliance with Regulation 30 of SEBI (LODR) Regulations, 2015.

Meeting Details and Format

The earnings call has been scheduled in hybrid mode, allowing both physical and virtual participation. The meeting will take place on Wednesday, January 21, 2026, at 6:30 PM at the Golconda Ballroom, Trident Hotel, BKC, Mumbai.

Senior Management Participation

The earnings call will feature comprehensive representation from Bank of India's top management team. The senior leadership participating in the discussion includes:

• Shri Rajneesh Karnatak - Managing Director & CEO
• Shri P R Rajagopal - Executive Director
• Shri Subrat Kumar - Executive Director
• Shri Rajiv Mishra - Executive Director
• Shri Pramod Dwibedi - Executive Director

Virtual Access and Support

For virtual participants, the bank has provided Webex meeting credentials with specific instructions to join by 6:15 PM to avoid login issues. Participants are requested to use their complete name and organization details when joining the virtual session.

The bank has arranged dedicated support through Concept Public Relations for any queries related to the earnings call. Contact persons Gaurav Girdhar and Yash Bhojwani are available to assist participants with meeting-related inquiries.

Regulatory Compliance

The earnings call announcement was formally communicated to both the National Stock Exchange of India Ltd. and BSE Ltd. through official channels. Company Secretary Rajesh V Upadhya signed the notification, which carries reference number HO:IRC:SVI:2025-26: 383, ensuring full compliance with regulatory disclosure requirements for listed entities.