Bajaj Finance Adds ₹400 Cr Cushion Annually

Bajaj Finance is enhancing its balance sheet resilience by implementing prudent flooring norms, which are expected to add ₹300-400 crore in annual provisioning. This strategic shift began in the third quarter of fiscal year 2026, with the company making an accelerated expected credit loss (ECL) provision of ₹1,406 crore. This amount was funded through the sale of its stake in Bajaj Housing Finance Ltd.

The new framework establishes a minimum Loss Given Default (LGD) floor across all product lines and ECL stages. Management indicated a commitment to strengthening this framework over the next two to three years, rather than relaxing it. This move is a key part of Bajaj Finance's strategy to become recognized as one of India's lowest-risk lenders.

The prudent flooring policy now applies to all loan categories, including vehicle financing and consumer durables. Bajaj Finserve, the parent company, reported a net profit of ₹9,801 crore for FY26, with an adjusted net profit of ₹11,211 crore, reflecting the impact of these additional provisions.