Amid rising geopolitical tensions and macroeconomic uncertainty driven by a spike in crude oil prices, Amitabh Chaudhry, Managing Director & CEO of Axis Bank, said banks remain on alert as risks continue to evolve, cautioning that it is still “early days” to fully assess the impact on the financial system.

He said that a prolonged period of elevated oil prices or persistent supply chain disruptions could begin to strain businesses, potentially triggering second-order effects on employment and consumer demand.

“If the crisis continues and oil prices remain elevated, or supply chains stay impacted, businesses will come under stress. That eventually flows through to customers - job losses could rise, hiring may slow, and overall economic momentum could weaken,” he told Fortune India at the launch of the bank’s first digital locker-focused branch in New Delhi.

Chaudhry emphasised that the duration of these pressures will be critical in determining the extent of risk. “The key question is how long this environment lasts - how long oil prices remain high and how persistent supply chain disruptions are. Depending on how these factors evolve, the risks could increase,” he added.

In anticipation of potential stress, Axis Bank has taken a prudent stance by setting aside a one-time provision of ₹2,001 crore in the March quarter (Q4 FY26). The buffer is aimed at strengthening the balance sheet against any adverse developments if external conditions worsen. “This is to ensure that we are adequately prepared and do not face any hidden surprises going forward,” he said.

Chaudhry pointed out that while some public sector banks have also made precautionary provisions, lenders across the system are closely monitoring their portfolios. If risks begin to materialise, banks may recalibrate their strategies, becoming more cautious toward vulnerable sectors and adjusting their customer engagement models accordingly.

He also highlighted a deeper structural shift underway in banking, driven by artificial intelligence (AI). He stressed that continuous upskilling is becoming essential for employees to remain relevant in an evolving landscape.

“People need to upgrade themselves in AI to stay relevant. Simply having access to tools isn’t enough, the real value lies in using AI to create better customer experiences, drive efficiency, and generate deeper insights,” he said.

As automation deepens, Chaudhry noted, traditional roles will evolve or fade, making continuous learning critical for long-term career resilience.

Notable, the private lender’s workforce declined by around 3,000 employees in FY26 to 1.01 lakh, from nearly 1.04 lakh a year earlier. Chaudhry clarified that this was not due to layoffs in any specific vertical, but largely because positions vacated through attrition were not replaced, given productivity gains driven by technology.

Axis Bank also unveiled its first digital locker-focused branch at Capital Green, DLF Midtown Plaza in New Delhi today, as part of its push to enhance customer experience through technology-led offerings. The branch is designed to combine advanced automation, high-end security, and a differentiated locker service experience tailored for modern urban customers.

Speaking at the inauguration, Chaudhry said the initiative reflects the bank’s focus on anticipating evolving customer needs. “As customers seek greater control, transparency and convenience in safeguarding their valuables, our Digital Locker-focused branch reimagines the experience by placing access, privacy and security firmly in their hands, supported by advanced technology,” he said.

He added that the new format aligns with the bank’s broader strategy of building a future-ready, ecosystem-led banking model suited to premium and digitally savvy customers, while reinforcing its push toward innovation-led service delivery at Axis Bank.