Indian banks' net profit rose 20% year-on-year to Rs 1.2 lakh crore in Q2FY27, driven by higher interest income, loan growth and one-time gains of around Rs 10,000 crore at large public sector banks (PSBs). The growth was also aided by a weak base, with profits having risen just 4.2% in Q2FY26. According to a CareEdge Ratings report, net profit of scheduled commercial banks (SCBs) remained above Rs 1 lakh crore for the fourth consecutive quarter. Net interest income (NII) grew 15.4% as bank credit expanded around 19%. However, higher bond yields during the quarter sharply reduced treasury income. Profit growth varied across bank groups. PSBs reported a 15.9% increase in net profit, while private sector banks (PVBs) recorded 25.1% growth.