Bank of Baroda Limited (BANKBARODA) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to Bank of Baroda's Q4 FY '20 Analyst Call. First of all, we thank you for joining us and taking out time to be part of our analyst conference call. So to begin with, I'll start with the safe harbor statement in the -- which is presented in front of you. So I will not repeat it, but as safe order, we're just bringing the safe harbor statement upfront. So we'll start with the major highlights of the results in the quarter. The operating profit for Q4 FY '20 increased to INR 5,121 crore, which is an increase of 48%, and it is driven by a large decline in operating expenses. We -- notably, in Q4 of FY '19, there was an amalgamation related one-off. Because of which, the operating expenses have declined substantially in the quarter. Trading gains for the quarter continue to remain point at 74% Y-o-Y increase. The global margins or the net interest margin has increased to 2.67% in the quarter from 2.62% in the previous year, so there is an increase of 5 basis points. And the domestic margin is up by 10 basis points to 2.78% adjusted for the IT refund. The domestic cost of funds have also -- the cost of deposits have also fallen to 5.2%. That's a decline of 33 basis points on a Y-o-Y basis. The domestic CASA ratio for the quarter ended Q4 FY '20 has increased by 181 basis points. The global advances have increased by 5.95%. They're led by international and domestic retail loans ex of portfolio purchase, which grew by 21% and 16%, respectively. Within retail, home loans have done well ex of portfolio purchase, which have increased at 11.5%. And auto loans have increased by 41%. Notably, the gross NPA ratio has come down to 9.4% as on March 31, 2020, as against 10.43% as on December 31, 2019. The net NPA ratio is also down to 3.13% as against 4.05% as of December 31, 2019. Notably, the slippage ratio in the quarter has fallen to 1.9% compared to 6.8% in Q3 FY '20. And for the year also the slippage ratio has come down substantially. The PCR, the provision coverage ratio, has gone up, including TWO at 81.3% as of March 31, 2020, which is substantially higher than 77.8% as of December 31, 2019. The bank reported a net profit of INR 507 crore in the quarter. The consolidated net profit for the bank for FY '20 stood at INR 927 crores, and the cost-to-income ratio has also come down substantially. The credit cost in the quarter has declined to 1.82% compared with 3.88% in Q3 of FY '20. A similar decline of almost more than 90 basis points is visible in FY '20 as against FY '19. The integration is progressing as per plan, and IT integration is supposed to be completed in the current financial year. In terms of the major highlights in the business, we are seeing the retail term deposits have continued to see an improved traction at more than 8 point -- at more than 8%. And the domestic retail term deposits continue to show great traction in the year. And the same is the case with the CASA ratio. So -- and the CASA deposits have also continued to show a healthy growth, led by the domestic saving deposits. In terms of CA and SA ratio, both -- all of them are showing an uptrend, and we have seen a substantial increase in our SA ratio, which was at 31.1% to 33 -- almost 33% now. The quarterly cost of deposits, as we've already discussed, has come down both on a Y-o-Y basis and a sequential basis, so is the case with the yearly cost of deposits. The -- in terms of advances, the overall share of retail has continued to go up. It's almost at 20% compared to 18.3% in the last year. The retail loan growth, as you can see in this chart, is driven by -- all the 3 cylinders are firing. So we are seeing a substantial growth ex of portfolio purchase in home loans, and auto loans are growing at 40% plus. Even the education loan piece for us is growing in the mid-teens. The risk profile of the retail book continues to be strong. We are seeing -- the credit score above 725 continues to remain the overwhelming proportion of the book has -- and also has gone up compared to what it was last year. The MSME portfolio as such, also you can see in CMR-1 to -4, has increased from 57% to 58.4%. The similar case is visible in our corporate book, where the A and above outstanding book has increased to 62%. And the onboarding in the last year A and above has been almost 75% of the total onboarding in the previous financial year. In terms of overall exposure to different industries, we are seeing in infrastructure the exposure has come down, whereas in retail it has gone up. In terms of segment-wise breakup, we can see in the NBFCPs [ NBFCs ], the overall share of AAA book has gone up to almost 57%. And within the NBFC book, the private others has come down by almost 10 percentage points. The yearly yield on advances has gone up by almost 20 basis points. And on a sequential basis also, the domestic yield on advances is up by 4 basis points. Though the global has come down because of larger margin pressure in the International Business, given the global liquidity conditions and the actions taken by different central banks. The treasury operations continued to generate reasonably good profit in the quarter and in the year. And the overall duration of the HTM book is 4.75, and the total book is 3.6. The yield on investment is coming down in line with the decline in domestic yields and the global yields as well. The International Business has been a bright spot. It has shown an increase of 21% over the same period last year. And sequentially also, the advances have increased by 9%. In terms of deposits also, there is an increase of l4% -- 13.7% on a Y-o-Y basis, with CASA deposits in the International Business also increasing by 16%. These are the key ratios of the International Business. As you can see, cost of deposits has come down, but the net interest margin is also lower because the yield on advances have also come off substantially in the global book because the readjustment in the global book is faster. In terms of financial inclusion, the business has done actually really well compared to March '19, where we had an average balance of less than INR 3,200. The balance is upwards of INR 3,650 in March '20. And even in a sequential basis, the business has done extremely well. So there's almost a 15% increase in the balances compared to March '19. The market share in the business continues to go up compared to 14.02% market share in the PMJDY accounts. It has now increased to 14.75%. Now we come to the financial performance. So the NIM on a Y-o-Y basis, the quarterly NIM has increased by 10 basis points from 2.68% adjusted for the IT refund to 2.78%. On a yearly basis also, the NIM is up from 2.77% to 2.84%. In terms of operating performance, the operating profit for the quarter is up 48% almost. And for the year, it's up by 19%. The cost-to-income ratio, both in terms of sequential basis and in Y-o-Y terms, has seen a large decline. In terms of fee income, the total fee income ex of the IT refund has actually increased by almost 10%. As you can see, the total fee income is up and so is the other noninterest income. So the total noninterest income adjusted for the IT refund is actually up by almost 10% in the quarter. In terms of operating expenses, there is a large decline in the quarter. And for the year, the operating expenses are pretty much flat. And we can see that the large decline is driven by the provision, which had to be made in Q4 FY '19, which we saw in the first slide as well, because of the adjustments related to amalgamation for the amalgamated entity. So this is the slide on operating profit as well as the provision. So we are seeing a decline in provisions for the quarter by 69% and so is the case for the yearly number, which has seen a decline. And because of which, both the net profit in the quarter and for the year have seen an improvement. Now we will come to asset quality. In terms of asset quality, we have seen the sharp decline in slippages to INR 3,050 crore from more than INR 10,380 crores in the last quarter. And for the financial year also, there is a large decline in the overall fresh slippage number compared to last year. So as a result, the slippage ratio in the quarter is down to 1.94%, and the credit cost is down to 1.82%. The provision coverage ratio shows that we have taken a substantial amount of provision and the [ PCR ] and excluding -- almost 69. This is a slide on the NPA ratios, which we've already seen earlier. This is the overall sectoral and industry-wide contribution of NPAs. This slide, you would have already seen, so I don't have to discuss it in detail here. The exposure to NCLT accounts, we have a large provision there as well. In terms of the watch list, the overall number stands at INR 12,500 crores. And this is the movement under SMA, which has come down to 1.2%, both for 1 and 2. In terms of overall capital adequacy, we are adequately capitalized and the CAR -- CRAR is at 13.3% for the quarter ended, which is higher than what we have seen in the September and the June quarter. In terms of integration, the integration is progressing fairly well. We have already done a branch migration of a certain number of branches. And we are looking at the entire IT integration in the current year. In terms of sales and initiatives, this is the geographical coverage and the international coverage. So I would just like to bring your attention to the supply chain business, which is showing a healthy traction in terms of the sanctions as well as the revenue. And this business continues to show a reasonable -- we expect it to continue to show a reasonable growth in the coming quarters and the years. The same is the case with our cash management business, which is showing a very, very healthy traction. As you can see, there is a large increase in fee income in the month and the year, both in terms of treasury -- treasury income, contribution to treasury income and to the fees. And you can see the number of customers steadily keep on increasing. It just shows the value proposition of the -- proposition to the customers. And the same is the case with our credit card business, which is showing a large traction. We've also seen a large increase in our digital footprint in the quarter. Our mobile banking app now is ranked top 3 amongst the large banks. And we can see there's a large increase in customer onboarding in terms -- in the quarter, and it has continued in the month of April and May, where we are likely to see a much higher traction in terms of user onboardings. Same is the case with our merchant onboardings. The digital footprint shows very, very robust growth, as you can see in some of the numbers in Y-o-Y terms. And this is the quality of the app, which is -- and some of the user feedback, which we have received. This is some of the impact that we have analyzed the impact of COVID on our vertical. So I would leave this for you to be seen at a later stage. It's just that we would like to show -- bring your attention to our consolidated profits as well. And that would be the last slide before we open it up for the remarks of the MD -- and in which you'll see that the -- for the year as a whole, the consolidated profit after tax is at INR 977 crores (sic) [ INR 927 crores ]. And the overall capital adequacy ratio on a consolidated basis is also higher than what we have seen for the standalone entity, which is at 13.8%. Here are some of the awards. So at this point in time, I would like to ask our MD, Shri Sanjiv Chadha, to please give his opening remarks before we open the floor for Q&A.

Thank you, Sameer. Very good morning to all of you. First of all, thanks very much for joining the call. I've been now with the bank for about 4 months. But if you look back at the last 1 year, it's been very eventful. The amalgamation, of course, was the key event. And I think if we are to judge the performance, we must see it in the context of the amalgamation. To my mind, by some key measures, the amalgamation seems to have achieved the purpose for which it was executed. One was, of course, the -- to see how you can integrate the banks and to make it a more efficient balance sheet. I would like to draw your attention to the liability side first, where what you see is increase in the CASA ratio by about 180 basis points. So BOB had a reasonably healthy CASA ratio traditionally, about 39%. But then Vijaya Bank was driven more by wholesale deposits with a CASA ratio, which was near 25%. So therefore, for the combined entity to move up from 37% to 39% in a matter of 12 months even while the amalgamation is in progress, I think, is creditable. And we expect to further strengthen the CASA franchise in the coming year. The second area in which the amalgamation seems to have worked very well is in terms of cost management and cost efficiencies. So the cost-to-income ratio of the combined entity has come down to under 50%. It's near to 48%. Now this will be seen in the context of the fact that one of the amalgamating entity, which was under PCA, had a cost-to-income ratio, which was as high as 70%. So I think to that extent, the benefits of amalgamation have already flowed very significantly, and we expect them to continue to accrue during the current year. On the credit side also, there seems to be reasonably good traction. Retail, as Sameer mentioned, if you were to adjust for pool purchase it has grown very well overall. But even apart from that, that's barely 15%. But these particular segments where the bank focused, car loans grew by nearly 40%, education loans by 16%. And this was as compared to an industry growth of minus 2%. And the credit deposit ratio also is upwards of 80%, showing efficiency in fund utilization. The credit quality also has improved. Gross NPAs are down 100 basis points. Net NPA is almost as much. The provision coverage ratio, including technically written off accounts, is up to 82%, which would indicate that the downside from the existing portfolio is limited. Going ahead, we feel comfortable with the credit quality, and we remain conservative in our provisioning practices. As against the RBI norm of 15% for substandard assets, Bank of Baroda continues to provide 20% against all substandard assets. And also the accounts where the bank benefited by way of the standstill clause of RBI amounts to about INR 4,000 crores. This is where, instead of the 5% that we were supposed to provide this quarter, we have gone ahead and provided 20% because 20% is what is applicable, as I mentioned, for our substandard assets as against 15% mentioned by RBI. We remain cautiously optimistic in terms of the asset quality outlook going ahead in the current year. We are acutely conscious that the stresses caused by COVID are going to have an impact, and they're going to tell upon asset quality in some measure. But on the other hand, we believe that it's going to be balanced by the fact that, unlike last year, we are not exposed to as many chunky potential NPAs. So overall, when it comes to slippage ratio, our assessment is that it may not be any higher than it was the last year despite the impact of COVID. In terms of capital, we remained well-provisioned. We have a capital adequacy ratio of 13.3%. And we have approval from the Board to raise up to INR 13,500 crores, about 1/3 of which will come from a possible AT-1 issue, which we might be considering in the quarter starting 1st July. So we believe that there is an opportunity for the bank to strengthen the balance sheet. The amalgamation is on track. We are mandated by our Board to completely execute it in the current financial year. And we believe that despite the dislocation caused by COVID, which would mean about 3, 4 months in terms of lost time, we still believe it is still possible for us to complete the integration entirely by 31st March 2021. And therefore, we would expect that the benefits of the amalgamation will continue to accrue during this year as well as in the coming period. We also are very strongly focused on -- this particular juncture as an opportunity to rethink the bank to expand the digital footprint. We are setting up a digital lending department, which will focus on digitally delivering home loans, car loan, education loans, MSME loans. We also, again, are focusing on our mobile app. I would request you to download it and use it. It is a first-rate product. It's ranked #3, again, among the large bank apps. So we feel very confident that it is possible for us to establish a digital ecosystem around the app in terms of even -- currently, current account and same bank account opening. Between 80% to 90% are opened through Tab banking, which means without any paper being used. So I believe the bank is well-positioned coming out of this cycle, both in terms of asset quality as also in terms of business, capital and its ability to take advantage of the current situation to be a much more digital bank going ahead. So that's my opening remarks. Really welcome any questions going ahead. Thank you.

Thank you, sir, for the opening remarks. Now we can open the floor for Q&A. And sir, we have received some questions while more are coming on the way.

So I'll start with the first question, sir, it's by Mahrukh Adajania from Elara Capital. The -- what is the moratorium on total loans at end April and end May? What will it be in June? That is the first question.

Okay. So I think the moratorium is obviously the elephant in the room. So let's address it first. So it's very good that it will be first question. So I think we have gone on record to state that the -- our book, which was loan book, which is under moratorium of the accounts which are eligible for a moratorium, was about 2/3, about 65%. We recognize the fact that this is higher than most peer banks. The reason is as follows: we had allowed opt-out clause to all our customers, which meant that unless there was an explicit special request from them, we would not raise the demand. Now in the case of most banks, the retail loans, in particular, they are normally funded by standing instructions, which means your saving bank account is debited and your loan account is credited. In the case of BOB, our practice is that we actually don't have as many SIs. And instead of that, we have the option of drawing money from the accounts of our customers. But that withdrawal of money can only happen once you actually raise the demand. And since we were -- our system actually stipulated that you don't raise demand unless there is explicit instruction from the customer, the demand was not raised, which is why our moratorium ratio is high. It is not on account of the fact that the money is not available to fund the loans, it is simply the system that -- the technology system that the bank operates. Now this ratio of 65%, actually in May, has already come down to about 55%. And we are talking about the amount, not the number of accounts because we believe it is the amount which is the most useful indicator in terms of moratorium. And we believe that as we go ahead, it will come down, and that was for the following reason. For the next -- second quarter, which means between June 1 and August 31, the dispensation we have adopted is that instead of a uniform opt-out, we will have an opt-out for loans up to INR 10 lakhs. And for the balance amount -- balance loans, we will request customers to opt in. We have free dispensation on our website. We are sending messages to our customers. So therefore, we believe that we will achieve a significant difference in customer behavior because every -- customers are conscious that there's increase in interest cost on this account. So our assessment at this point in time is that our -- the moratorium had some count from currently 55%, which was in May. Overall, it was 60-odd percent for the quarter to 35%. So this is really the reason why a moratorium was higher and why it should during the quarter, which we have now begun, quarter in terms of moratorium quarter, June to August, why it should trend down towards the industry level.

Sir, there is another question from Mahrukh Adajania. You answered the second question. So she had 3 questions. You answered the second. The third question is, what is the amount of MSME funding done by BOB under the emergency scheme? And what is the amount eligible?

So we are talking about the emergency scheme, which has been guaranteed by the Government of India. So our total portfolio, which is eligible under that, which means that loans, which are up to INR 25 crores in terms of total credit limits -- fund-based credit limits from the banking system and INR 100 crores in terms of revenue, is about INR 50,000 crores. So these are the loans which are eligible, which means that the total amount that we can put out under this scheme is about INR 10,000 crores. And as things stand, about 2/3 of that has already been sanctioned. So we are seeing very good traction, and we believe that the -- for the MSME segment as well as for the bank, it is something which is very supportive. It will allow us to address the liquidity issues of MSMEs while making sure that our own book is fully protected since these lines are guaranteed by the government.

Sir, the -- we've got another question that is from M.B. Mahesh of Kotak Securities. And that question is, could you give some color on the upgradation for the quarter and the pipeline on resolutions that you have for FY '21?

Mahesh, so I will pass that question on to Mr. Shanti Lal Jain, our Executive Director.

Yes. So over this, recovery was around INR 6,000 crore, and the -- and slippage was INR 3,000 crores. So our recovery is basically in all accounts business. We have done recovery through compromises. We have recovery through some NCLT and through upgradations as well. So in upgradations, there are few accounts where there is a recovery is made -- Sonu, which account is it? INR 2,500 crore will be the account.

Thanks, sir. Sir, then we have another question from Dev from Horsepower Security. The question is, how do you save so much on employee cost?

So I think, again, Mr. Jain would be right person to answer that. Jain sir?

Yes, sir. In employee cost, we are making provisions as per the actuarial valuations. We have done the actuarial valuations based on the IBA guidelines. And in fact, there was a slightly higher provision in the second and third quarter. So in the fourth quarter, this is slightly less, but it is based on -- purely on actuarial valuations.

The next question is, how much were the MSME special loans under the COVID package -- COVID-19 package in the quarter?

So I think we have answered the question, right? So the total amount, which is -- which could be disbursed under this scheme is about INR 10,000 crores. We have already sanctioned about INR 6,500 crores odd as things stand today.

Right. And the next question is, what would be the bank's...

One more point, Sameer. Sameer, one more -- last time, last time, the employee cost was higher by around INR 300 crores because ESPS we came out in the third quarter and whatever discounts we have given ESPS as a part of employee cost in third quarter. That is why third quarter is slightly higher.

Right. Sir, the next question is on the bank's loan mix. So how do you see the bank's loan mix going ahead?

Yes. So I think the bank's loan mix is pretty diversified. So about 50% of the book is corporate, and the balance is almost equally distributed between MSME, agriculture and retail, with retail trending upwards. We do expect that this mix is something which would be enduring. Within that, of course, there may be differences of emphasis, depending upon what the economic conditions are. For instance, as far as the current year is concerned, we expect that the kind of growth we saw in car loans last year, about 40%, that may not persist. We expect loan -- the retail loan growth to be a little dampened going ahead. But the MSME loan growth and the agricultural loan growth should be stronger as compared to last year. But for all these segments, we continue to emphasize upon quality. For our retail loan segment in terms of the credit scores of our customers, they are very high. And as you would have noticed in Sameer's presentation in the corporate book also, the proportion of loans, which are highly rated, A and above, has moved up significantly. In our NBFC portfolio, about 90% of our book is rated AA and above and 95% A and above. So we would believe that we would want to, of course, trim our sales, depending upon which way the winds are blowing. But our general proposition, 50% in corporate and 50% in the broader definition of retail, including MSME and agriculture, will continue.

Right. So the next question is, what led to the sequential decline in international link?

So I think as you -- as everybody would be aware, there is -- all central banks have flooded the markets with liquidity, more so abroad as compared to in India, which has meant that there's been a very sharp drop in terms of yields, particularly in terms of short-term asset deployment. On the other hand, there is a lag in terms of repricing liabilities, which is why there's been a sharp decline in net interest margin. Given the fact that the asset yields probably have bottomed out and there will be a repricing of liabilities, which would happen, we would expect some recovery going ahead.

There is a -- it's actually part of 4 questions. So first, we've answered. The second one is, in the NBFC rating composition what explains reduction in BB-and-below book from INR 2,900 crore to approximately INR 960 crore?

So I -- so at the end of the day, I think mostly it would be a function of maturities and also what is the kind of fresh underwriting you do. So we have -- the emphasis has been in terms of making sure that any incremental growth in NBFC portfolio is very heavily biased towards high-quality NBFCs. So as I mentioned, the proportion of AAA NBFC exposures has moved up very, very sharply. So I would believe that, that is the trend that would continue. Overall, we would expect our NBFC to grow. But we are conscious that it is slightly higher than -- no, significantly higher than what the market share in loans is. So overall, the NBFC growth should not be happening. But within the NBFC portfolio, we should expect steady improvement going ahead.

Sir, this -- so as the third question is, any large accounts that contributed to higher recoveries during the quarter?

I'll pass it on to Mr. Jain again.

Told you this one account where we have recovered -- upgraded this account by -- having outstanding of INR 2,500 crore. This is one account. All others are small accounts. Here, we have done number of compromises. We have done even some amount of -- received from NCLT as well.

Right. And last question is, can you share the additions and deductions from watchlist during Q4?

So I think in terms of the addition, because there has been a net increase of about INR 2,000-odd crores, I think this is on account of an international exposure that we have. I am not entirely certain about the reductions. But again, Mr. Jain might want to give some color on that.

Yes. Yes. As far as the slippage part is concerned, it is INR 3,050 crores. So where the agriculture part is of INR 500 crores. And MSME is around INR 1,000 crores. Retail is around INR 350 crores. Corporate is around INR 311 crores and international is around INR 800 crores. This is a measured breakup of the slippage.

Jain sir, the question was more about the watch list.

Yes. In watch list, basically, one international account having a huge exposure of around INR 2,000 crores, which we have added. And the second point is that, again, INR 4,053 crore where we have taken a standstill clause. This is also a part of watch list. Because -- these accounts were at a standstill, and of course, we have provided 20% on that.

Right, sir. So the next question is, what is the segment-wise loan under moratorium in retail, MSME, agri and corporate?

Okay. Since I -- I think we'll just -- we'll send this, I think, figures separately. But to my mind, the proportion is not very different from each other. So the -- I think the 2/3, which was there, the early part of moratorium period probably hold and so does the fact that all of them are trending downwards. But I think we can supply the figures later on.

And the second question from the same person you've already answered, sir, on the SME loans disbursed and sanctioned. The third question is, what are the capital adequacy plans...

Yes. I think there's a follow-up portion to that in terms of disbursement. So about 1/3 of the sanctions have been disbursed when it comes to the MSME schemes. 2/3 of the amount has been sanctioned, which means about INR 6,000-plus crores. And 1/3 of that is already disbursed, I believe.

And sir, the third question is capital raise plan, if any.

Yes. So we had, at the beginning of the year, taken approval from our Board to raise an amount up to INR 13,500 crores. So we routinely have that kind of mandate from the Board every year. That comprises INR 4,500 crores as a possible AT1 issue, and the balance would be by way of equity. We would believe that even though we are well-capitalized, we are considering going to the market for the AT-1 bonds in the quarter, beginning 1st of July. When it comes to pure equity, that is dependent upon market conditions. And I do not anticipate us visiting the market in the first half of the year.

Right. The next question is on reason for increase in provisions for standard assets in Q4 versus Q3?

So the standard has been going -- has gone up for a couple of reasons. I'll just give 2 main points, and then Mr. Jain can, of course, see if there's anything more to add. First, there's an account which has been provided for to the extent of INR 1,500 crores on account of the RBI June 7 circular. This account is -- we expect that this is entirely on account of technical reasons. And there's a very fair possibility or that this could be the worst going ahead. So that is one. The other part is the point that Mr. Jain mentioned, that there is a INR 4,000 crore book, which is under the standstill clause of RBI. And as against the 5% required provisioning, we have gone ahead and provided 20%, which is the standard provisioning, which is applicable to substandard assets for Bank of Baroda.

And remaining provisioning on account of increase in our credit.

Right, sir. And there's a second question, which is slippage breakup segment-wise, which you already have answered, sir, I believe.

Yes.

Right. So the next question is on a couple of data points. One is the revaluation reserve, second is outstanding provisions on standard assets, third is outstanding total restructured book, fourth is outstanding security receipts, fifth is outstanding amount of BBB and below-BBB book for the percentage is given on Slide 15.

That information will be provided.

Yes, sir. We'll provide it separately. So the next question is the outlook on the SME book. Based on Cliffs higher-marked rating, what proportion is Cliffs rating 6 and above? What is our experience on slippages in this segment? What if we are to reduce the NPAs and also onboarding new customers? What we are doing to reduce NPAs and in onboarding new customers in this segment?

Okay. So I think when it comes to the figures of the Cliffs rating, I think probably, Sameer, you can provide that. But in terms of the SME book, the factors that we expect that the opportunity that we have of addressing the requirements of our SME customers through the guaranteed loan facility, which is being made available with the support of the government, is a very good opportunity for us to address whatever incipient stresses might be there in the book while keeping the bank's own capital buffers intact and also making sure that our clients can actually go through this period with the liquidity support that they require. So to that extent, I would believe that the MSME book should remain reasonably well-protected in the current period. Additionally, we also are the leading bank in terms of using the PSB 59 platform or SME loan underwriting. And the slippage ratio is there, the propensity of accounts to become NPAs for those PSB 59 loans is much lower as compared to -- or significantly lower as compared to our normal book. So we would expect that as the digitization agenda moves forward, and I mentioned earlier that we are launching a specialized department called the Digital Lending Department, which we focused entirely on making sure that we are able to digitally deliver loans for home loan customers, car loan customers, but most importantly, for MSME customers, where you'll also have an opportunity to draw in various data points, which are not normally captured in underwriting processes based upon balance sheets. We expect this to have a salutary impact on MSME portfolio going ahead.

Thank you, sir. So there's also a question from the same person. On -- what is the -- on employee cost, what is the wage hike assumed?

We have considered 12% base hike.

All right, sir. And on pension, despite interest decline, the pension provision has declined. Any reason for the same?

So I have already told that in the Q3, cost to us high was up INR 300 crores on account of ESPS project, which is a onetime provision, first. And second one is, there was slightly higher provisions and in the current quarter, there is no [ actuarial ] valuation. We have done the AS 15 provision and [ met ]. And this 12% provision we have made, and it is a part of provisions.

Right. And what is the outlook on the cost-to-income ratio?

So the cost-to-income ratio has come down significantly. And as of now, I believe it would rank pretty favorably in terms of peer banks. Nevertheless, we believe that there is scope to bring it down further. We do not expect that the improvement is going to be as precipitous as it was in the last year, but we are targeting a further 100 basis points improvement in the cost-to-income ratio.

Thanks, sir. And then the next question is, can we know what are the major decisions that you have taken internally? And what are the areas where you are likely to build focus for improvement of the bank in the next few months and/or quarters?

Okay. So I think this is the current juncture is a very important point because, one is, of course, that very probably that the world is going to change significantly and including how we do banking. Apart from that, it also gives us the time and space to actually strategize and to execute. So we believe that's going ahead, the changes that we see would be significantly around seeing how we deliver customer -- services to our customers. The branch channel, which is an overwhelming part of how we deliver services and also overwhelming part of cost will, over a period of time, probably become less important. So we will be focusing on how do we deliver services digitally, how do we deliver services through our business correspondence, how do we deliver services through lighter footprints in terms of branches, which are actually much [indiscernible] in terms of their footprint and in terms of costs. So I think looking at service delivery is going to be one key part. The other part, of course, is as -- even the fact that we are having this conversation today by through -- to the Team's platform rather than meeting as we normally do. I think, to some extent, it has changed our way of working entirely. So we will be leveraging technology more and more in terms of our customer interactions, interactions with our staff. Today, it is possible to almost reach out to the entire 80,000 family of BOB through a platform like Teams. So in terms of how we conduct our reviews, how we drive business, I think we are looking at all those processes again. In terms of HR policies, what is going to be the composition of the workforce, can you actually leverage part-time workforce going ahead, can you leverage skilled people who may not necessarily be available full time to you, I think all these are going to be very important components. We believe over the next quarter, we would be fashioning out our strategies to see how we can use this opportunity to drive efficiencies and prepare the bank for the future.

Right. So the next question is, what is the overall core spread debt management intends to maintain for FY '21? What is the guidance for NIM for the year? And is possible to share if there are any large slippages in the current quarter? And if so, from which sector?

So I think as far as net margins are concerned, it's a very fine balance that we'll need to strike between maintaining net interest margins and also making sure that the credit costs are contained, not only now but also in the medium term. Given the liquidity overhang, which is there and which is likely to persist and also given the fact that there is going to be emphasis on underwriting standards, on making sure, again, that the credit quality is such that can withstand the stress, which is that we see around us, my own sense is that we do not see any expansion of [ interest ] margins, not significantly, to some extent, the international banking, the net interest margins should recover. But overall, I would tend to believe that they may be flattish with also the possibility of possibly contracting a few basis points as we make sure that our underwriting standards are right up there to ensure credit quality.

And is it possible to share any large slippages in the current quarter and from which sector?

Yes. I think Jain sir, wanted to say something about [ net interest margin] .

Sameer, you asked about the 3 data points, but is the revaluation reserve, it is INR 6,080 crore. And what is the standard asset provision. It is INR 7,248 crore. And how much is security receipt is INR 1,753 crore.

Very good, sir. Yes. So in terms of the slippages, I would believe that the current quarter and the next 2 quarters for which you have reasonably clear visibility, the slippages should be trending downwards. And this is not only because of whatever dispensation, which is there of the RBI. But we do not, in our book, have the kind of large exposures, which were tethering on the edge that we had in the previous years. So I would believe that we should be looking at a fairly strong position in terms of asset quality going ahead. Having said that, one would want to hastily add that the impact of COVID is not completely known, it is not completely apparent. And it's only in the second half of the year that we'll be able to make a full assessment in terms of how that is likely to play out. But as things stand today, we have room for cautious optimism.

The next question is, what would be the focus area for growing advances?

So, I think we have addressed in some measures -- in the previous questions. We believe that the growth in the retail segment is going to be lower than what is the trend line. MSME is likely to grow strongly powered by the guaranteed scheme of the government. As I mentioned, the amount that we can disburse under scheme is about INR 10,000 crores, which is about 10% of MSME book. So therefore, 8% to 10% growth in MSME seems to be a very reasonable prognosis. Agriculture also seems to be in very good shape, and we would want to aggressively target growth in the agriculture segment also, which we would want to be in double digits. So the emphasis is going to be on MSME and agriculture. Corporate book should be growing pretty much as per trend and in terms of market growth. The retail segment is -- really depends upon how soon again employment recovers -- but my guess is that you get a little lower than trend line.

All right. So the next question is, if you look at Slide 37, there has been substantial improvement in NPLs in the power and textile sector. Could we specify which companies you saw these recoveries of growth?

Mr. Jain?

Yes, sir. So basically, I told you a number of accounts we have done and one big account is a INR 2,500 crores, rest all other outs are small accounts, maybe INR 50 crores, INR 60 crores INR 100 crores, not a of big account.

Right. And what is the total quantum of loans where the bank has signed kind of ICAs? Total quantum of loans where the bank has signed the ICA?

In basically, in 9 accounts, 9 accounts we are having just a moment. Actually, we are having 373 accounts where exposure is more than INR 2,000 crore of a banking system, not a loan, right? And where the -- and NPA accounts are already 34, 5 is basically IL&FS group account and only 9 accounts were there, right? So out of these 9 accounts, we already made a provision of 5 accounts. And remaining accounts that time period of 180 days has not been over.

All right. And how much of the LTRO -- TLTRO did the bank do till date?

So the total was in the INR 6,500 crores. INR 5,500-odd was in TLTRO 1 and INR 1,000 crores in TLTR 2. I think, as we speak, since we are coming towards the end of June, almost the entire amount is committed now.

All right. The next question, which we have already -- which we will send later on is, what is the moratorium on retail, agriculture, SME and MSME, corporate and credit cards as of May 21. Credit cards in BOB financial services.

Yes.

So then there's a question is last year, treasury gain was INR 2,700 crore. What is the outlook for the current year in terms of the treasury business?

Yes. You would -- might want to answer the question? Subrat, do you want to take that?

Yes, sir. See, the last year, you all must be appreciating this fact that [indiscernible] in a similar way. [indiscernible] [ 6% 10-year ]. So we don't see much movement in the [indiscernible] is concerned. So we are of the view that it will be like around between INR 1600 crores to INR 1,700 crores [indiscernible] from the profit on sale of assets [ and credit ].

So from what I understood -- so what we are guiding is it is about INR 1,600 crores?

Absolutely, sir. Yes, sir. Around INR 1,600 crores.

The next question is on breakup of slippages, which we have -- Jain sir has already given the detail of. The next question is growth visibility post-April in retail book, auto, home loan. How is the growth part looking in the domestic corporate book and international asset monetization of stakes or real estate?

So I think when it comes to the growth on the retail segment, what -- I think we, for the moment, again, are a little cautious. We would want to probably give another month or so before we actually see which are the segments we might want to aggressively push. But particularly when it comes to car loans, where we have seen very robust growth last year, we believe that it would be dampened simply because car sales are likely to be significantly lower as compared to last year. But we would expect that our home loan growth probably should continue as per trend going forward. In terms of the international book, there was, again, a sharp spike, which was there towards in the last quarter. But we would expect, again, the growth to be double digits. I'm not really looking at 20%, which was in the last year because part of that was driven by the devaluation of the rupee. The growth that you see is expressed in rupee terms.

The moratorium in rupees crore for retail MSME, agri and corporate, these details we can share separately. And you've already mentioned about them. How do you see the overdue loans, which is 11.5% of total loans?

So I think when it comes to the SMA book, we have the opportunity of actually addressing requirements of customers and through, again, various instruments which are available to us. And of course, the COVID situation has added some extra stress. But nevertheless, it has also given us the time and space to look at individual accounts and to see what is the solution, which is best useful for them. To just give an indication of the INR 4,000 crore of book, which benefited from a standstill allowed by RBI, INR 1,500 has already been regularized. So I think that should give us a fair idea that, while COVID is creating stress, nevertheless, there is an opportunity for us to also make sure that we can track with borrowers and try to make sure that we address their requirements and also pursue them to regularize accounts. So I would like to believe that maybe early days in terms of a prognosis, but we are looking at the [indiscernible] contain slippage.

Sir, as you...

Go ahead, please.

Yes. Out of this 11%, what we are talking about, this 2/3, around 8%, is basically SMA 0, where is basically 1 day default. So generally happens -- it happens. So there's no big worry on account of that.

Right. Next question is the outlook on cost-to-income ratio post merger, can we see it consistently below 50%?

I can't give any [ source ] from that. But look, it's like this, we have seen cost savings all the time. A lot -- a significant proportion of the cost savings are yet to come. Because when we're looking at branch rationalization, for instance, that is something which is a work in progress, and we've seen benefits. In terms of hiring, we don't see significant hiring going ahead. But nevertheless, again, they are at times imponderables, which you may not necessarily have a handle on, right? For instance, again, how do rates spend, how do actual valuations move, where exactly does the wage settlement come down and settle. So these are imponderables, which we do not really have a handle on. But if you're looking at general trend, given where we are today, we would -- we believe that we should be consistent targeting a cost-to-income ratio of below 50%. And even in terms of where we stand today, I think you should be looking at effecting more cost savings.

Right, sir. Besides the NPA provisioning, what is the total provision pool at the bank? And of that, how much is for standard assets?

Standard assets [indiscernible] are INR 7,248 crores. In addition to that, we are having a provision for employee benefits. Every quarter, we are making INR 200 crore provisions. The number we've already disclosed in the -- our filing the stock exchanges. Cumulative number, I can -- [ cumulative ] number.

I'll tell you.

I'll take the next question in the interest of time.

Yes.

What would be the outlook on BBB and below exposure of 38% due to COVID disruption? So, do we see more downgrades and higher NPAs? And a related question is, what -- how do you see the recoveries in FY '21?

So to answer your second question first, I would believe that the recoveries should be lower this year as compared to last year because in terms of active recovery effort, the first quarter has not really worked out very well because of the lockdown. Having said that, the fact is when you look at the outlook for BBB portfolio, I don't think that is something which really should -- because of the rating be a cause for concern. We have been looking at a number of accounts when we look at -- review their facilities. A lot of manufacturing is coming back. And we would expect over the next 3 to 4 months, the manufacturing as a sector should probably be the one which should be recovering the fastest. So therefore, I am -- as of now, we don't really have too much room for concern. But again, the fact is that it is also true that all businesses, individuals, they have certain capacity to withstand stress. Now therefore, it's only after 6 months that we would really come to know whether there has been any significant disruption. But as things stand, I would just want to repeat what I said before: that we believe that while there would be an impact of COVID in our portfolio. It should be offset by the fact that we don't see so much stress on our large corporate book.

Right. So in addition to net asset provision of INR 7,200 crore, we are having INR 1,922 crore on account of base division provision.

Sir, the next question is how much of the retail book is unsecured? And what is your expectation of stress from that group and the breakup between salaried and self-employed or the unsecured book.

V.K Khichi, or...

Actually unsecured, we are giving -- we are active in housing loan, which is fully secured. We are active in auto loan, which is fully secured. Only the education loan part is unsecured, and we are not having measure exposure in personal loans. So very small amount will be unsecured.

It's around 3%, 3%.

Yes, Mr. Khichi. Mr. Khichi.

Yes.

Yes.

Sir, around INR 1,25,000 crores of that is the retail portfolio, only INR 4,000 crores is basically unsecured. So that comes to around 3%. 3% is the unsecured.

So also in terms of education loans, although it is technically unsecured. But the education loan portfolio of the bank, which we have grown aggressively, is of very good quality. So we are not really seeing any signs of stress there. So overall, we are reasonably sanguine in terms of the quality of underwriting. Of course, the fact that how the COVID stress will play out is something that we will see. But in terms of underwriting standards, the kind of credit scores that we insist on, I think we're going to be in a good position.

So the next question is with the moratorium number being higher versus peers, what gives us the confidence that our slippage number will be similar to FY '20?

So I mentioned earlier the circumstances in which the moratorium is higher. As I mentioned, it is mostly on account of our accounting system and how our technology system works, whereby you need to raise demand before you can recover money from the customer's account. And in more than 95% of the cases, we have the customers' accounts from which we draw the money. It's simply that we could not draw the money because with the opt-out clause, you could not raise the demand. As I mentioned now, the opt-out clause is available only up to loans of INR 10 lakhs. Above that, it is an opt-in. So therefore, we should see a significant reduction in the effective moratorium, one. Two, even when the moratorium was there, it was not because of the lack of propensity to pay. It was simply that we were not able to make a demand effectively because of the system that we operate. That is something that changes from June onwards. So -- and the other point, again, which I made earlier was -- or if I did not, you'll pardon me, it might have been in other interaction. The fact is even when we were sanctioning our emergency credit lines, which are available to corporates 10%, there were a number of cases where we have sanctioned lines to corporates, where the regular working capital limits are either not drawn or very substantially undrawn. So people are looking to preserve liquidity. So when you opt for a moratorium or when you opt for an emergency line, it is not because you cannot pay. It's simply that you recognize that these are difficult times. There's uncertainty, and you would want to bridge the uncertainty gap by keeping a liquidity cushion. So that is what gives us a room for optimism and also the confidence that the fact that people have opted for moratorium is not necessarily or even in large measure an indication of stress.

Right, sir. Your next question is addition to watchlist from international book is high at INR 2,600 crores. What are the reasons for this and outlook on watchlist?

So the are they have been again some large [indiscernible], which will at actual bookings, which have shown signs of stress. So -- and it is something which will, over a period of time, get resolved. So we have been fairly conservative there, which is, again, the reason why that is high. Having said that, I would want to emphasize that a significant proportion of our international portfolio is composed of ECBs, which are exposures on Indian companies; trade loans, which are secured by letters of comfort or letters of understanding from banks, effective their bank exposures. So as far as the overall book is concerned, a large proportion of that is actually very, very safe and solid.

Right. The next question is, what is the bank's exposure to DHFL? And what is the provision held against this exposure? Also, is the account classified as fraud by the bank?

Yes. Mr. Jain?

Yes. We are having exposure around INR 2,000 crore in DHFL. We have already made a provision up to INR 500 crores in the accounts. We already classified the account as fraud.

Right, sir. And what is the share of loans with ticket size higher than INR 10 lakhs in the overall book?

So the proportion of term loans which are under INR 10 lakhs is about 10%. So those are the ones which, again, would be the mostly the one which where, again, there'll be a moratorium on repayment. There will be, of course, working capital also, but that is less impacted by moratorium because the only interest which gets impacted.

And the next question is what proportion of our retail book is linked to the external benchmark?

That's a yes. Around 5% of our book is linked to external benchmark as on date.

Right. The next question is, have you recognized exposure to Dubai-based BR Shetty group as NPA? Any plans to raise equity capital in FY '21? And the next one is what is the moratorium on home loan portfolio. That you already answered, sir? And second one, also the first question is, which just needs to be answered.

Murali Ji?

So see, we have red flagged the account. We have not classified it as NPA. The question is, if you see that the group accounts is all very secured. Here BR Shetty Finance Company also [ Central Bank of U.S. ] they can charge. And we don't think there will be any big problem there. Other group accounts also, you have got NMC Hospitals. That is also very secured. And we have got in other pharmaceuticals also. So all our exposures are very secured. And I don't think there'll be a big issue there. Those that companies -- the news, there's nothing much to worry [ anymore], that is there.

So I think the -- some in substances, we have our concerns. But as of now, I think we are still a little early as far as assessing what the final [development ] is going to be.

The next question is in the international book, what was the increase due to rupee depreciation? And what was due to fresh disbursements?

So I think the rupee depreciation is something which is well documented the extent of that. But in terms of the exact breakup, we can come back on that.

All right. There's a question on the share of slippages also. So that we can share [indiscernible] sir, and Jain sir has already explained it. The next question is on -- against everybody is asking for the slippages breakup. So there are 2 questions, so we'll share that later on. The next question is on the wage revision provision we have taken so far. But that also, sir, you have already answered. The next question is, please explain how NPA recognition will happen post-moratorium period lapses. Will Baroda reset the clock from 1st September or for all of it? Or it would start recognizing all loans as NPAs, where borrowers did not pay interest during the moratorium?

So which is that question number again -- once again, Sameer?

49, sir, 49.

Okay. Okay. I'll have to refresh it. I think I have got passed that.

I'll repeat the question, sir.

Yes, please.

Please explain how NPA recognition will happen post the moratorium period lapses. Will Baroda reset the clock from 1st September for all the accounts? Or it would start recognizing all loans as NPAs, where borrowers did not pay interest during the moratorium?

So I think let me try one to that, but I think Mr. Jain will give the definitive answer, but let me attempt to answer that. So the fact is there are 2 categories are there, which [bunked] their are term loans, right? So when it comes to home loans, for instance, effectively speaking, the installments which have not been paid, they get added at the back end of the loan period. There is no extra demand, which is raised at the end of the moratorium period. Only the regular demand is going to be payable, which means that there is no stress which is being created on account of the payments which have not been made. When it comes to interest on working capital, there's a provision for [ FITPL ], which is there. So therefore, there is no cliff edge which is there, where you fall at the end of the moratorium period. That's my understanding. But the definitive view will come from Mr. Jain.

Yes. So what RBI has allowed stand still period on the exposure is on [ INR 29,000 crores ] is one point. Second point is there will be no demand for 6 months. When you granted a moratorium because there's not demand for 6 months. So what will happen after 31st August, those accounts which are on SMA2, maybe hitting 60 days, [indiscernible] 61 day will start from 1st September, right? But in between, there is no demand. In between, there will be no demand. So wherever we have granted a moratorium, account will shift after 90 days from the rate of demand.

So effectively, in terms of the SMA book, where, again, you need to make sure that at the end of the moratorium period, the account is regularized within 90 days from the period it was overdue. But when it comes to standard assets, there is no stress which is created on the book. The installment simply get added to the back end. It is like instead of having a 15-year loan, you have [indiscernible], as an example.

So there is no demand for those accounts, sir. Absolutely, there is no demand. So whatever demand is at the end, it will shift to the end.

All right. And there's another question from this similar gentleman. This is -- what is the share of loans we have where clients were given a moratorium? And does Baroda expect to completely forgo all interest income applicable to these loans under moratorium?

Ravi? Yes, go ahead Sameer.

Yes, sir. The next question is -- is on moratorium, which is that 65% of the moratorium is as of which date and 55% is as of which date?

60%, is in April, right. [indiscernible] down 55%. And I repeat, we are talking of [indiscernible].

Right, sir. The next question is, what is the BOB's share of loans provided for development of India's infrastructure? What is bank's call on funding such projects, whether the bank is aggressive in funding to government organizations, which will in turn give boost to development countries infrastructure.

I think we -- in our presentation in terms of the outstanding amount of infrastructure loans. So it is -- so we remain active players in the infrastructure sector. Having said that, the general trend in terms of CapEx and infrastructure projects has been dampened in the recent past, but we remain open to the idea of funding these projects. Although we believe that given the fact that, particularly in the private sector, the new projects have been few and far between. We don't expect our [indiscernible] in private projects to actually be going up very significantly. But we do continue to support public sector companies, which are executing infrastructure projects, and that remains a significant part of our book. We believe that is something which is -- something which, of course, works well for the country. But also in terms of our risk profile, we find very favorable.

Right. And the next question is, what is the absolute amount of BBB and below B book for the percentages given on Slide 15?

So that's for Sameer.

Yes. That we will share later with the person later on. Then the next question is, again, on the international slippages. The [ $25 billion ] addition to single account is from which geography. And can you indicate which sector it is from?

Okay. Murali Ji?

Sir, this is from our UAE [indiscernible]. This is from the hospitality [ exchange house], a group, which is dealing in [hospital] [indiscernible] and pharma. And as I mentioned earlier, that the exchange as the administration are monitored by the Central Bank, UAE and I think that will come into control because all international banks [indiscernible]. Regarding hospital, we have got good security, you've got good cash as per also. And coming to pharmaceutical also, we've got good security and pharmaceutical is doing well. So I don't think, though we cannot say that we are out of woods, but I don't visualize a very big issue in that. That will come into order, and we don't feel it's a grave concern at present.

Right. The next question is, are you concerned about Moody's negative watch where the agency said essentially what can see in the ratings of bank is a large capital inclusion by the state?

So I think the fact is that negative watch is obviously something that suggests that one needs to be vigilant and take whatever proactive action is required. But from my understanding, the negative watch was driven more in terms of the overall economic environment rather than any bank-specific concerns. Having said that, we remain fully conscious that even though we are well capitalized and we do not see very high volumes [indiscernible] or too concerned. But nevertheless, if there is an opportunity to build our capital buffers, we want to do that. And therefore we, as of now, are proposing to access the market for through an AT1 issue.

Right. The next question is linked to this. Is the -- in the evolving economic environment, how is the bank gearing up to meet the challenges?

So I think one reason to be very conscious of where these [ spaces ] are developing. And you need to draw a very fine balance between supporting your customers, making sure that they have enough liquidity support to get through this difficult period. But at the same time, not overexposing the bank and in any way, creating any stress on the bank's balance sheet. It's a very fine balance. It's easier said than done, but I would believe that would be our view. And that is, I believe, it would probably could be the strategy of all banks. The good part, of course, is that, as I mentioned, through the guaranteed line of the government prime SMEs, there is an opportunity to address a very large part of our client base through support, which is [ backstopped ] by the government. The agriculture segment continues to do well. We -- our corporate book has very large exposures to government and quasi-government entities, which we believe, again, is a source of strength under the present circumstances. There is a very significant increase in the rate -- improvement in rating profile of the bank's portfolio, where A-and-above-rated companies have gone up. As I mentioned in our NBFC portfolio, which is, again, large for us, the AA-and-above book is 90% and A-and-above book is 95%. So I believe these are all sources of strength. And we can take exposure selectively while making sure that our book is not unduly exposed to recurring prices.

Right, sir. Sir, the next question is, what is the expected credit loss and outlook considering the COVID?

So I think it's a bit premature to really talk on the COVID impact. One is that I think reminded of that famous saying, which was -- I think it was an old Chinese leaders, I think it was Zhou Enlai, when he was asked about the French Revolution a full 200 years after the revolution occurred. But what do you think about the impact of French Revolution, he said it's too early to say. Right? So if it was too early to say after 200 years, I'm sure that it is a little premature to have a definitive assessment of the impact of COVID. We'll see how it is going forward. But on our part, we are making sure that we are fully prepared.

Right. And the next question is, what is the total amount of advances lent to PSU/ government accounts? And how much of the loan is guaranteed by government, either state or central government? And where bank is aggressively lending to PSUs government organizations?

So I think the [indiscernible] under the present circumstances, if you have to see that where do you have assurance and visibility in terms of credit quality over the next 2 or 3 or 4 quarters that the PSUs, again, seem to be a good bet. So that is something which does make sense. In terms of the exact figures, I believe off hand, it is there, I think, at the bottom of one of the slides, that 37% of our non-NBFC exposure is probably government PSU. But I think Sameer will give you that correct figure.

Right. So next question is, what is the composition of non-SLR investments?

Okay. That should come from Subrat, Mr. Jain.

Subrat?

Yes, Subrat.

So I think here [indiscernible]. Would you please repeat, Mr. Sameer?

What is the non [indiscernible].

Our total investment in [indiscernible].

The next question is what is the overdue number as of May? And as a lot of customers who have paid the dues, outstanding the DTA numbers as of 4Q? And in your notes to account, you have mentioned that there is no virtual certainty of the profits, and hence, you've not any DTA. How should we look at this?

So I think as far as the DTA is concerned, the fact is that we do not have a taxable profit in the year that we have just closed, right? That was to some extent on account of provisioning that we've made on a standard asset, which we believe is for tactical reasons, which was a very significant provision, which reduced the scope of any taxable profit. And going ahead in the current year, our current assessment is that we would be having a taxable profit. And therefore, our present assessment is that we should be looking at moving to the new tax rate when it comes to the current year, which means the next assessment year. This is my current prognosis. But again, Mr. Jain would probably, again, give the definitive view on that.

Yes. So very right, sir. We will be moving in the new tax in the current financial year because we'll be having a taxable profit. Last year, we were not having taxable profit. So there is also a point of [ moving ] to that.

Right. So the next question is also -- you've already answered that, have you moved to the new tax regime. What is the expected tax rate for FY '21? And what is the outstanding deferred tax in the balance sheet?

Yes. Yes. Yes, no.

Yes, our -- first I'll tell you the number, I'll get back to you on those numbers.

The next question is on the question of interest on working capital, can the amount be deferred for 6 months and be paid up to 31 March, 2021?

Yes. Mr. Jain. Yes, you can to repeat the question, for Mr. Jain, please.

Yes, I will repeat it again. On the question of interest on working capital, can the amount be deferred for 6 months and be paid up to 31st of March 2021?

Yes. Sir, this is declared by the RBI guidelines Whatever interest for this period will be accumulated in the FITL accounted, it will be paid up to 31st March. This is our guidelines.

Correct. The next question is, what will be the impact of waiver of interest on moratorium loans with respect to Supreme Court cases recent outcome?

So I don't believe there's a judgment, which is there as far Supreme Court is concerned.

Right. The next question, sir, that I think we've already answered. Are you concerned with 11% of the overdue book? Is it entirely SMEs? We've already answered that question. The next question is on what is your view on funding to NBFC sector? Given the current environment, will you increase funding to NBFCs? Do you see any systemic risk emerging in the NBFC sector?

What question number?

This should be question #72.

Okay. Can you repeat that [indiscernible] question please?

Yes. What is your view on funding to the NBFC sector? Given the current environment, will you increase funding to NBFCs? And do you see any systemic risk emerging in the NBFC sector?

So our NBFC book is large, so which means that we have had a fairly positive business [ chance ] as far as NBFC is concerned. The book is as of now 15% of our loan book, which is significantly higher than most peer banks. But as I mentioned, there's a very significant bias towards quality. 90% is AA-rated and above 95% A-rated and above. So as one is because of the ratings and the quality book. Number two, of course, is the fact that significant liquidity cushions were built by NBFCs in the post IL&FS scenario. Three, there have been instruments that have been made available by RBI, including the TLTRO funds. TLTRO 2 was specifically meant for NBFCs. So I think there has been an opportunity to address any issues that NBFCs might have. As things stand, we remain very confident about the quality of our NBFC portfolio.

All right, sir. sir, now we come to the last question for the day, which is how much of the retail disbursals in FY '20 is a pool purchase? And how much of the outstanding retail loans is the pool purchase? Did the bank also buy portfolio in SME and MSME segment in FY '20? Would you quantify, if any, what is the below BB and rated portfolio in the non-SLR book? And what -- when do you intend to switch to the new tax regime, that you already answered. So the first 3 questions you need to answer. Yes.

So I think those are pretty much specific figures. So I think we will probably send that over.

Right, sir. Sir, on that note, sir, we've come to close in terms of the questions that have been asked from the analysts. So we'll end the analyst call at that note. So in terms of closing comments, I would like to thank all the analysts who have logged on to the call and asked questions. We really appreciate the effort that you put in, and thank you for your time. And we also thank the entire top management who's on the call and taken out time to explain the results. So we will hope to see you in the next quarter, probably in person in our auditorium. So on that note, we end the conference call. Thank you for your time, and hope to see you soon. Thank you, sir.

Thank you.