Public sector lender Bank of Baroda posted a 21.6% year-on-year decline in the net profit at Rs. 1,012 crore for the quarter ended December against Rs. 1,290 crore in corresponding quarter a year ago due to higher provisioning for bad loans and a fall in other income.

"Indian economy is passing through a tough phase," said SS Mundra, chairman and MD, Bank of Baroda. "Non-performing assets (NPAs) are at elevated level. Rise in NPAs is the reflection in what is happening in the economy." Gross NPAs of the bank increased by 25% to R7,322 crore from R5,879 crore in the year-ago period.

Shares of the bank fell 7.5% to close at Rs. 802 at the Bombay Stock Exchange on Monday.