For the first time in almost a decade, India’s banks are in a sweet spot—the balance sheets of several public sector banks and private sector banks have seen a remission of bad loans, led by higher provisions, which were possible due to government-induced recapitalisation. Private sector banks have also seen improved asset quality due to better provision, slippages being brought under control and increased deleveraging by corporates. This has also meant benign credit costs for banks in recent months.