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

Okay. So a warm welcome to everyone to the Q1 in FY '21 results for Bank of Baroda. Hopefully, everyone is safe and doing well. We, first of all, apologize for the delay, and we have uploaded the presentation on the link. And so we can directly start with the opening remarks by MD and then we will be taking the question and answers, which will be followed by the closing remarks. Over to you, sir, please.

Thank you, Sameer. A very good evening to everybody. We had some challenges in terms of auditors in Delhi getting results signed. So -- sorry, again, for the delay which has been there. I do hope everybody is well, and all of your families are doing well. This is now 1 year since the bank reported its first results post amalgamation in -- for June of 2019. So to that extent, it has been an eventful year, a, the impact of the merger, which is, of course, will be beneficial in the medium-term, but the short-term impact is something which has been -- all these are challenges. And then, of course, COVID. You have a copy of the presentation. So I would just request you to have -- make sure that you download the latest copy and have a look at that because there are some figures which have changed, I think, over the last hour or so in terms of the analysis. I think material in terms of results, but in terms of some growth ratio which have been given. So I would just request you to look at -- just have the latest version. So we're not going through the entire since you have a copy. But I'll just dwell upon 5 main themes, which I believe are important and which we can discuss, and I also think would be the major part of your questions. So first is, again, so maybe if you can just move to the first slide please. So these are the -- this is again, the figures that we would have, right? I think some these figures, again, the one in the old figure, which is there in terms of growth piece. Sameer you're there?

Sameer, you're...

Yes, sir. Yes, sir.

So you have the -- the first slide is the one that you -- are the figures that [indiscernible] [ slide ] need to change, right?

Right, sir. Right.

So would you want to bring it up again?

Yes, Sanjiv. Bring it up again.

Okay. I'll just start speaking in it. So fundamentally, what we see is some of the figures will change the cycle. But fundamentally, what we see is that despite the challenges that have been there on account of the merger and also on account of the COVID-19 situation, the growth in futures of the bank remains pretty much intact, and we have been gaining a fair bit of traction in terms of business as we have gone along. On the deposit side, we have, both in terms of CASA as well as in retail term deposits, we have seen very good figures, which are at par with industry or better. CASA has gone up by 11.9%. And in the process, the CASA percentage has moved up by nearly 3 percentage points from 36.5% to 39.5% Y-o-Y. Retail term deposits have similarly gone up by 10.4%. The overall deposit growth has been more muted at about 4.3% because we have been very careful in pricing our deposits and making sure that the deposit growth is closely aligned to the advances growth. As a consequence, the CD ratio has actually gone up significantly during this period from about 78% to 81%. So that's been a significant improvement. Going ahead also, we would want to make sure that we align our deposit and our advances growth. On the loan side also, again, in most heads, we have seen growth, which has been pretty much at par with industry and some measures, better than industry. Net of pool purchases, home loans have grown by 10%. Education loans have again grown in the mid-teens. And car loans have grown by about 26%. The overall growth in retail loans has been about 13.5%, aligned to the corporate loan growth, which has been about 8 -- 9% as you end up with a total advances growth of nearly 8.6%. So overall, we have had very good robust growth despite the challenges which were there. And if you were to look at the slide, which is there on the right-hand side, the Y-o-Y change in advances would suggest that the momentum has been [ guaranteed ] as we have gone. The quarter ended June it was 5.86%. And then post-merger, as the challenges were there in terms of integration, they came down to nearly 3%. And now over June '20, it has moved up to 8.6% growth Y-o-Y. So to that step, I think we are seeing a gathering momentum. Along with good growth in business, we have seen improvement in asset quality. The gross NPA ratio has been down nearly 1 percentage point from 10.28% to 9.39%. The net NPA ratio is down by more than 1 percentage point from 3.95% to 2.83%. The slippage ratio this quarter is down possibly understandably from 3.56% to 1.64%. But I would want to draw your attention to domestic slippage ratio because there were some one-offs which were there be in [indiscernible] the book, which is down from 3.9% to 0.45%. So all in all, we have been able to deliver both a fairly good growth in terms of business figures, both deposit advances and also a significant improvement in asset quality going ahead. The PCR now stands at 83%. So the question, of course, is that if our loan growth has been good, our deposit growth is mostly composed of CASA, then why is it that we actually had a quarter, a loss during the quarter. So this is largely on account of [indiscernible] the standard assets. If you were to look at the presentation, there was actually a [ write-back ] of provision of about INR 100 crores last year in Q1 on account of standard assets. And against that, we had about INR 1,800 crore provision on [ standard assets ] this year. Part of it, of course, is on account of the COVID loans, which would have [ skipped ] otherwise, about half of it. But the other half is on account of actually a standard asset, which is guaranteed by the government. But where -- because even [indiscernible] is that in case you are not able to do [ discussion ] or taking account to NCLT, and in this case, both are not possible, you are required to make a provision. The circular does not, as of now, distinguish between government-guaranteed accounts and others. So therefore, we made a provision. We do believe that this provision, over the next few quarters as the situation resolves, will get written back. So we see this provisioning as something which will be available to the bank for, again, COVID-related stress should it arise as this gets released in the subsequent quarters. The total amount of provisioning we hold against this loan, which we -- again, which we provided both in the last quarter and this quarter is an aggregate of INR 2,500 crores. On that, about INR 1,000 crores in this quarter. So that is really the context in this period loss, which is how we actually square the circle that you have, good growth in deposits, good growth in advances. NII has gone up by 5%. Slippages have come down. But nevertheless, the figure, which is there in the [ loan ] loss on the account. Along with that, the other interesting piece is the moratorium, which I believe would be a matter of discussion today. So you might recall that in the first round of moratorium, BOB had given an [ outward call ] to all our customers, and the moratorium came out at a relatively higher figure at about upwards of 60%. In the second round from June, we decided that only accounts which are up to INR 10 lakhs, we would actually do a moratorium which would be opt out. For everybody else, it would be an opt in. As a consequence, the moratorium figure has come down very significantly. And we have tried to, again, express it pretty much in a standard way because all banks were doing it in different ways. So the moratorium term loan book which [indiscernible] moratorium, as a percentage of total loans held is today 21%. And to fix that figure, term loan book, which is under moratorium as a percentage of total loans, is today 21%. And for this, what we have taken is the -- all loans, where the last installment has not been paid. So even if 2 or 3 installments have been paid, but the last installment has not been paid, we have taken that as loan missed under moratorium, and the figure there stands at 21%. Of this, the ones which are at [ par out ] is about 5.74% as you will see. And the balance, 16%, is the loans which are opted in for the moratorium. If we were to take a definition of, say, where 2 installments have been paid, this 21% figure would drop down further to 17%. So to that extent, we have seen a very significant improvement in the position -- in the loans under moratorium, which is in line with the guidance that we have given earlier, that a lot of people who are opting for moratorium only to preserve liquidity, not necessarily because there was an inability to pay. The last piece, which I would just mention before we can move to questions, is our valuation exercise. So this is moving apace, both in terms of rationalization of branches, which is [ indiscernible] cost savings. We have targeted 1,300 branches to be rationalized. It's a significant part of the cost base and the network. Out of that, about 900 have already been co-located. And the balance will be done over the next few months. And in terms of the executing the entire valuation process, we expect to complete that within this financial year, fairly comfortably despite the 3 months which were lost on account of COVID. Also the targeted savings, which were supposed to accrue, that, again, 9% of those savings have accrued to the back. So in summary, the amalgamation process is absolutely on track. So with that, I will end the opening remarks. Very happy to receive any questions that might be.

So the first question is -- should we start?

Yes, please.

Sir, the first question is on what were the additions to [ n ] downgrades from the watch list during the quarter?

Yes. I think I can see the question. So one is on account of the downgrades from the watch list and the total outstanding standard asset provisions, including general provisions and sharp rise in watch list from NBFC sector, right?

Yes, sir.

Okay. So I think the addition to the watch list is the answer, I think, lies in your third question, right? This is mostly on account of the NBFC, which we have added to the watch list that accounts for the major addition. In terms of downgrades, I think of slippages, 90% have come from the watch list. But having said that, the downgrade during this quarter are relatively small, right? In terms of the total outstanding standard asset provisions, excluding general provisions, maybe again, Sameer, you can give that figure.

Right. The total provisions?

Standard [ provisions ]. [ Do you have the ] figures?

Yes, I have. So the total provisions for standard assets during the quarter were INR 1,811 crore.

So if total provision, total amount of provision that we [indiscernible]standards assets, right?

So the total...

Outstanding standard [indiscernible] asset.

Yes. We'll just get that. We'll just get that.

Yes. Okay. Yes, Sameer, we go to next question, please?

Yes, sir. Sir, the next question is, sir, for which segments will you do onetime restructuring? Will there be no restructuring in retail? Why has the NBFC losses gone up?

So I think in terms of this segment's onetime restructuring, I don't believe, again, this is something which is necessarily going to be segment-specific. But clearly, again, if we look at the composition of our book, I would suspect the larger portion would come from corporate loans simply because of the composition of the account, which are under moratorium. Of the 21% accounts which are under moratorium, about 10%, [ about half ] are accounted by the profits. In MSME, we believe there would be some restructuring, but partly because of the fact that there are other scheme which are available, including a 20% increase in fund-based [ limits ] guaranteed by the government. We believe there are other possibilities which will vary in terms of supporting SMEs. But the corporate book is likely to be single largest component of that. As far as retail is concerned, yes, the possibility of restructuring is there, and it is also true that the -- as far as the retail loans are concerned, there would be some stress simply because of the impact of COVID in terms of the personal incomes of people. Having said that, the quality of our retail book is very robust. Nearly 74% of our retail loans are growth with the credit scores of [ 7 25 ] plus. So therefore, we believe -- and we also -- the proportion of unsecured loans is relatively small in a retail book. So therefore, we believe that our retail book should hold up relatively well. But nevertheless, we should, again, be looking at -- we have -- we open the possibility of some restructuring, which is required. But to repeat, again, the much larger percentage are to be the corporate book. In fact, NBFC watch list has gone up only on account of 1 single large account, which is there, which remains standard, which also visibly highly rated, but which we believe shows some signs of stress. So therefore, we have gone ahead and put that on the watch list.

Sir, we -- should we go to the next question, sir?

Yes.

And sir, the total standardized asset provision is INR 7,906 crores.

Yes. Okay.

[indiscernible] answer that.

Thank you. But just again, just to emphasize on the NBFC piece, that overall, our NBFC book tends to be very, very good quality. We are comfortable with the quality. There's only a one-off account which we have [indiscernible] on the watch list. But otherwise, if we are looking at the risk profile of the NBFC book, I think what we would find is, again, and this is there on slide -- on Page 16 of the presentation with you, that the percentage of books, which is private others, which means those NBFCs are not backed by central or state governments, PSUs or large institutions has come down from 34% to 27%. The overall book, which is rated AAA and AA, continues to be very high at about 89% to 90%. So we are very, very comfortable with the overall quality of the NBFCs.

Sir, the next question, is the moratorium is 21% of the term loans or 21% of domestic total loans or 21% of total loans?

Come again.

Sir, the question is moratorium -- is the moratorium 21% of term loans, 21% of domestic total loans or 21% of total loans. So that I think you've already explained that it's total...

Yes. So it is -- so 21% is [ for term loan are moratorium ]. Sorry, 21% of our book is under moratorium. This is composed of term loans.

Yes, and this is a percent of total. Correct, sir?

Yes.

So the next question is on the watch list of March '20, is INR 12,500 crore. So any color or clarification on that? And now it is at INR 13,000 crore.

Yes. So I think this is for the point that we made earlier. The increase in the watch list is mostly on account of 1 NBFC, which we have put on the watch list because we believe that the portfolio of [ loans is ] showing some signs of stress. That is the single largest and addition of watch list, which accounts for the increase on the watch list.

Right. Sir, the next question is on the quality of the triple -- below BBB book, in terms of some quantification or color, which is there in Slide 14.

Slide 14, let me look. Okay. So this is loan accounts which are above INR 5 crores. So the quality of the book continues to be good in as much as that any -- the fact the loans are rated AAA is more on account of the fact that these are medium -- normally medium-sized enterprises and which have balance sheet structures, which requires -- [ specifically required ] related to BBB. Otherwise, the -- in terms of -- if you would look at historically, the stretch levels, the -- our BBB book is of fairly good quality, and it is something which has held up well. Also the fact that the moratorium has come down precipitously after we chose to have an opt-in for all borrowers above INR 10 lakhs would suggest that the quality of the book remains pretty good. So we actually have no reason to suspect that it could be booked as a [ leeway ] significantly more prone to stress. Of course, we had their account rated BBB. It would mean that the quality of the account is [ good ] as compared to weighted accounts. But otherwise it could be rebooked -- it is a good quality [ asset ].

Right. Sir, the other question is what are the outstanding provisions on standard global assets? I think the earlier one was also there. So the -- we can give shape -- we've already shared the breakup for domestic assets for INR 7,906 crores. If we take the global one, that number will be approximately INR 9,000 crores. So the next one is quantify the unrealized MTM treasury gains.

This is something which -- unrealized?

Mark-to-market.

Yes. So I can just add -- I don't really have [indiscernible] have an answer? Or would you leave this -- if it was [indiscernible]on the [ quality ], maybe we can answer that.

Sir, this here in [indiscernible]credibility, INR 8,900 crore. [indiscernible]

So there is the answer. Okay. So we can move to the next question. That says, can we have the stand-alone balance sheet for the quarter? That you've already uploaded. So that is not the issue. The next one is, sir, what is the -- term is what percentage of the overall loan book?

Come again.

Term loan, what is the -- question #11, sir, 11.

Okay. Yes. Term is what percentage of the overall loan book? In my mind, clearly 50-50, is that...

Slightly higher, sir. I think it will be approximately closer to 65, 35 [ kind notation ].

Okay.

Okay. Sir, we'll move to the next question.

But as I can -- just make sure you could send the specific answer. So that we can have the exact breakup please.

Yes, [ Santi ] will send it. Yes. So the next question is some color on the moratorium on working capital. And what is the total exposure to government-guaranteed account, both funded and non-funded? And then the third question, sir, part is the NIM outlook.

Yes. So I think we can send you these figures on the working capital. Here, of course, I think the point is that it is only interest, which is, again, not being paid compared under moratorium and which, again, will be put into [indiscernible] this financial year. So that is why this is not something which is taken as part of computation. But the figure is available and we'll give that to you. Sameer has the figure. I think he can give you a call or he can send you immediately after that. The total amount of loans, which are, again, guaranteed by the government, is something which we can, again, provide. Not [ variable ] fund movement, but we can give you that figure also. But I think what we need to bear in mind is that it is not the issue of government guarantees, which was the point. The point was that there is actually a June 7 circular and which again makes provision for operating against the loan credit facility [ because ] it's moving up by [ 5.25% ] in case you do not take out on to NCLT. And this circular does not make a distinction, specifically between government guaranteed loan and otherwise. So the point that we had been able made only in the limited context of the June 7 circular, not government-guaranteed accounts per se. The last part was in terms of NIM outlook. The net interest margins are certainly are going to be a little bit under pressure for the reason that the liquidity surplus situation [ leans ] on some credits are coming down. And what we have been able to contain that by -- because of the fact that in terms of deposit growth, it has mostly come from -- and that percentage has come from CASA. And going ahead also, our endeavor would be to make sure that deposit growth is, on one hand, contains pretty much in line with the loan growth, so that the impact of the equity overhang is minimized. And second, to make sure that in terms of composition, the deposit growth comes as far as possible from CASA growth. Our CASA has moved up from about [indiscernible] 36.5% to 39.5% over the last 1 year, and we are targeting to take it up furthermore 42% by the end of this year. But again, given the way the liquidity is playing out, it is -- we believe that it is possible that there could be some further [ pressure headwinds ]. And as of now, our base case is that it could continue to come down by another 5 basis points.

Right. Sir, we'll take the next question. It's on our equity raising plan. So please share your equity raising plans in the future, price issue, et cetera, to maintain your share in the banking business. Please share plans and indications for deposit growth and CASA growth. And then SBI and Kotak have shown satisfactory growth. Please share indications for operating cost, slippage ratio and credit costs for 2021.

So [ thanks very much ]. Let me see what is this question number so I can just make reference to that.

[ 13 ].

#[ 13 ]. All right. So I think the equity funding plans are something which we have published. We propose to raise a total of [ INR 41,000 ] crores by way equity during the current year, INR 4,500 crores by way of [ CET1 ] issue, and we are partly through that already. And the balance amount will also be raised in the next few quarters. INR 9,000 crores will come by way of our equity. And that's something which is possibly, again, looking at in the second half of the year subject to market conditions. Now the exact composition or the auction that [ we include ] on that price to certainly a possibility. But that's something which we have not chosen as of now. In terms of deposit growth, as I mentioned, we would want to align deposit growth to our loan growth. As of now, we are looking at growth in the loan book, about 7% to 8% during the year. And we believe that the deposit growth should also be aligned, largely only same lines between 7% to 8% with the predominant proportion coming through CASA growth, which should move up from 39.5% now as close to 40% as is possible. So in terms of operating costs, I think the operating cost has gone up during this quarter. Y-o-Y it is up by a few basis points. We believe that given the fact that the cost synergies are going to play out over time, but nevertheless, it is the fee income, in particular, has taken a hit. In this quarter, if you look at the figures on the income side, it is fee income which is the one which actually had negative growth. NII has grown by 5%. Other income, which is negative. So as the recovery gathers momentum, we believe fee income would be under pressure Y-o-Y as compared to previous year. So therefore, in terms of cost-to-income ratio, we possibly might end up on the lines which are similar to where we are now, hopefully, with some improvement. But we do not expect the cost-to-income ratio as of now to move north of 50%. It should remain well under 50%. The slippage ratio, you would have seen the slippage ratio has come down during this quarter significantly as compared to Y-o-Y. And if you look at the domestic slippage ratio, even more so. Because the international slippages, there were some one-offs which were there. And we do expect that the slippage ratios should be significantly lower as compared to the previous year on 2 accounts: a, because of the fact that we have seen the moratorium has come down; and b, because of the reason that the RBI restructuring option is available and therefore, a percentage of loan which may have [ slipped ] otherwise, the option of restructuring would be available.

Sir, we take the next question. This is on what is the reason for decline in CET1 of around INR 20 billion on a quarter-on-quarter basis? What is the total term loan of the bank? And what is the share of loans which have not paid any PMI in April to July period?

So I think I'll just pick on the last piece first. So this 21% figure that we have given, this is for loan account, which have not paid the last PMI. Which means even if they had paid the previous PMI, we have still computed them as part of the figure under moratorium. This 21% figure that I mentioned earlier would come down to 17%. If we were to take accounts which have paid 2 installments as one which are not under moratorium, but we have taken a conservative view, and that is the figure that we have. In terms of the CET figure again, I think Mr. [ Jain ] will probably, again, will give you some color on that.

Yes. excellent CET is basically 2, 3 pieces. One is because of the losses. Second, because of the [indiscernible] it created. The third one is because of regulation results. We have three [indiscernible]

Sir, on that we'll move to the next question. Same thing, what explains the 36 basis point reduction in CET1, so we've answered that question. The next question is the question pertains to the number of 21% given for moratorium. Does 21% refer to total global loans of the bank? Or does it refer to 21% of domestic loans? Or does it refer to 21% of domestic term loan? So this we've already answered, sir. The next part is absolute number will be helpful to avoid confusion. So we've already answered is 21% of total loans, and we've given the total loan figures, this can be completed. Also, as this number further reduced in July, so this is the July number 21%. If so what we -- so basically we have already given the latest number. The last part is, what percentage of your retail loans are to government employees or employees working for government companies?

So I think we don't have readily the figure of retail loans to government employees, but the figure that we do have is that 74% of our retail loans are to borrowers who have a trade score of 725 plus. So the quality of the retail book is fairly good.

Right. So we'll move to the next question. The person requires a breakup of total savings and current account figure global. So this we can provide it separately -- we provide it separately. The next question is which sectors, your credit risk team considers as stressful. What are your views on home loan growth and infrastructure sector?

So I think over time, we start to, again, talk of this sector as a, right? The usual suspects are there in terms of aviation, hospitality, CRE. So our exposure to the those sectors [ 1$, 2% ] of the loan book so we can come up with the exactly figure [ INR 300 ] [indiscernible] So we can just give you the exact figure, but it's relatively small, particularly if we take off the government guaranteed portion. The other part of the question was on terms of home loan growth. So again, this is something which we remain comfortable with, exactly because of the way we have positioned our home loans. As we mentioned to you, a, we are -- our loan -- pricing is something which is very aggressive, but intended toward those with the highest credit scores. So if you -- if a person has the highest credit score, then our home loan rates are the best on the market. In fact, to everybody on the Board, if you assure all of you have home loans, I would request all of you to look at the BOB home loan rate very, very carefully. I'm sure you will end up saving a fair bit of money there. And as far infrastructure sector goes, I think it's as much a function of opportunity. And if you were to look at the figures that we have given in terms of industry breakup, our exposure to infrastructure sector has come down from 14% of the book to about 10% of the book. So we are okay in terms of growth of -- growth in the infrastructure book, but we are very, very careful in terms of quality. And given the opportunities which are there today, we believe that as a percentage, the proportion of infrastructure loans is likely to probably come down as part of the overall loan book.

Right, sir. And sir, as you are saying, the credit risk to stress those 3 stressful sectors as a percentage of domestic exposure, that would be 2.8%.

Yes.

So we'll move to the next question. That's on the domestic NIM has been declining over the last 5 quarters. Where do you see the domestic NIM? Anything that the bank is doing to improve it to 3%?

So yes, first of all, again, absolutely, again, I think it's very important that we make sure that the net interest margin improve significantly. That, to my mind, is going to be a function of the composition of the book. I think part of the challenged resources at 50% of our loan is corporate. Also -- and when it comes to highly-rated corporates, I think the yields, again, have been driven down because of the excess liquidity. And the only way you can protect NIMs for the moment is to make sure that the deposit rates come down in tandem. So if you look at our deposit rates, they are pretty much the lowest in the market. And also bring up the CASA ratio. So we expect that to end up the year with a CASA ratio of as close about 42% as possible, which would pretty much place us among the best banks as far as CASA ratio is concerned. But coming back to taking the net interest margins to 3%, I think we need to [ visit ] our portfolio. For instance, again, when it comes to the mortgage book, mortgage loans as compared to home loans against carries the higher rate of business. So we would be looking at our loan book very, very carefully, very actively within this year to see how we can start pushing up our net interest margins. We absolutely recognize the fact that it is imperative that we push them up to as close to 3% as possible. Although, of course, during the current year because these portfolio [ visits ] happen over a period of time, we do expect the net interest margin to be under a little bit of pressure simply because of the equity overhang, which is like to persist over time.

Right, sir. Sir, we can go to the next question now. It's on the stressed NBFC on part [ upon ] acting real estate developer finance. For question #20, sir.

So I -- we can confirm, I presume it would be EBITDA financing. I think that is something that -- and you take it from there.

Right. Sir, so the next question is, again, it's sort of similar, sir, what is the NBFC loan under the watch list? So a similar question.

So it's a really small part of our portfolio. Our total NBFC book is in the region of [indiscernible] right? So I think in terms of the percentage of book of the watch list, which is [possibly of 2%] So our NBFC portfolio continues to be very strong, very robust. About 90% of the portfolio rated AA and above. It is performing really, really well. A very, very large percentage is supported either by the government or [ incumbent ] companies or PSUs or, again, very large private sector groups. So we are fairly confident of the NBFC portfolio, and we believe that the one account which has been [ removed from the watch list ] there's a bit -- it's bit of a one-off, and that would have been done on approvals.

Right. Sir, the next question is, what is the loss given default historically from our below BBB and BBB rated accounts?

Okay. And I think this is, again, a lot of statistics, which are there. This is from Sashank from Axis Mutual. I think LGD is what is required and also in terms of corporate book and moratorium breakup in the sector rating and all. So I think there is something which probably we have to see if we can provide off-line.

Right, sir. The next question is, sir, what is the reason behind the higher standard asset provision this quarter? What has been the disbursement under the ECL GST?

So I think we did mention we're using for the higher sector during the quarter. So this was one account of 1 account and also the applicability of June [indiscernible] to that. We expect that this provision should, again, getting back over the few quarters. And as of now, our assessment is, within this financial year, we should be neutral as far as extra provisioning is concerned. In terms of the ECL GST, I would request to [indiscernible] give us the figures, please.

Yes, sir. We have sanctioned almost INR 8,000 crores, which translates to around 94% of the eligible accounts have been sanctioned. And out of which INR 5,564 crores has been disbursed. So that translates to [ 53% ] of the all eligible accounts.

Right, sir. Sir, the next question is, there is a slippage of INR 2,100 crores from international book. Any particular loan account which accounts for a large portion of this? And if so in which sector?

So I think yes -- so that is from [indiscernible]. So I think the -- I think it's an important question. Because of this international slippage is something which is really out of the ordinary -- normally assets do not [indiscernible] INR 400 crores. So of this, about INR 1,100 crores is from one group from the Middle East, where, again, some issues have come up in terms of the authority of information as far as that group is concerned. The balance amount is composed of 2 accounts. One is a large diversified group from India, which is -- which has, there again, have [encountered] some issues there. So one of the group concerns, which is a Singapore -- all the assets have been sold off. We expect to get the money with -- by September. And there is INR 600 crore outstanding which is there. So that is part of this slippage, which means, in sum, that INR 600 crore slippage, which has happened, we expect a full recovery within 3 months or so. Another INR 250 crores is on account of a boon out of a which is almost fair, is again a large group from India, where the restructuring shall happen. On the fact that the restructuring, the account has been classified as NPA and therefore, there is provision. But the loan is being serviced on time. So the [ INR 2,049 crores ], about INR 1,900 crores plus is accounted for the 3 categories. One large [ company release ] and about INR 900 crores, which is there because of one very -- since we expect to recover the money and INR 250 crores restructuring, which is successful.

Right. We'll move to the next question, sir. What percentage of loans haven't paid a single view between March and July end, which is 5 months. Moratorium is only from the term loans, right? So we've answered that it is only from the term loans. What is the moratorium on working capital? Why has the domestic NIM or loan yields declined in Q1?

I think we have answered part of the -- I think most of the questions have been answered, except in the fact that what is the percentage of loans where -- which are about the [ basic installment ]. As far we are concerned, we are not really focusing on that as people have not paid the [ gas support ][indiscernible] . As far as we are concerned, that limited moratorium. We have taken a fairly conservative view of that. And I think as I mentioned before, if we were to take people paid 2 installments, the moratorium figure will come down from 21% to 17%. So we are being fairly conservative on this, and we actually don't have a [indiscernible] figure of who has not [indiscernible] installment. I think it's quiet, we can come back on that particular piece. So working cap is, of course, only the interest and which we also will be paid back within this financial year, which is why this is not part of this figure, but we can give that to you separately. In terms of domestic NIM, again, I answered the question. The decline is actually, I think as we're looking at Y-o-Y, we've got 78 basis points. The NIMs have been under pressure, which is mostly on account of the liquidity position, which is there and how that impacts the NIMs on the corporate book and the highly-rated corporate book in particular.

Right. Sir, the next question is, within our retail loans, what proportion of customers have -- would have a reliability relationship with us?

So I'll request [indiscernible] to answer the question. My understanding, I think 90% those people have accounts with us, but [indiscernible] will give the answer.

Yes, sir. This should be around 90 to -- 90-plus percent would be having retail liability and relationship with us. More and more have -- do have an account. Even if we have new to bank relationship on the asset side, we do develop into the liability relationship also.

And the absolute number in rupees crore for moratorium. That we'll share separate figure, [indiscernible] said that's 21% of quarterly growth. Which segment is the NBFC into the one added to the watch list. So that also -- you've already given a color on. Yes. Sir one question that has come is what will be the guidance on the credit deposit ratio as well as the net interest margin?

So I think the credit deposit ratio has now settled upwards of 80%. I think there's still some room to push it up. Some room to push that. Although I would believe that, first, you would want to make sure that we optimize the credit cost by taking up the CASA figure to as high as possible. The other part, of course, is that we are in slightly uncertain times. So you might want, again, to be a little more conservative in terms of liquidity cushions. So -- but if we're looking at guidance for the next few quarters we are looking at growing the asset and liability book in tandem. As of now, we expect the assets to grow by about 7% to 8% in current year, and we want to grow our deposits by a similar percentage.

Right. Sir, the next question is, is wage revision entirely done? Or is spilled over to the next 2, 3 quarters? [indiscernible]

[indiscernible] please.

Yes. [CM make up] [indiscernible] is about INR 278 crore in this quarter. We are having a provision of INR 2,200 crores. And as per the MOU, we are more or less toward close the finer details are. But as far as the MOU, we have more or less.

Right. Sir, the next question is on the assessment of impact of current -- the circular on our current account by RBI. What do you, in your opinion, is the assessment of the impact?

Current account circular?

Yes, sir.

I'm sorry, again. Maybe [indiscernible] officer may have got idea about this, please?

As far as current account is concerned, we are having around 667 consortium accounts. And we are having around 210 multiple accounts or about 875 accounts. And majority of these accounts they are having more than 10% of our shares. So going forward, we should be in this because we [indiscernible]

So okay. I can probably get the question right. So absolutely, so we will welcome the RBI circular. We believe that this circular should really help us in terms of maintaining credit discipline. And it really is a big help, and we wanted to maintain it again as diligently as we can.

Right. Sir, the next question is, how much has the bank provided against standard NBFC exposure under watch list? And the higher slippages from the international book in any color -- probably around the same, that we've already given a color. And this retail we can share separately in terms of what is the exact provision under the standard NBFC account that we've provided before. Sir, the next question is, what is the amount of interest accrued and deferred that has been booked in the P&L in the quarter?

Okay. Again, [ Jian, sir ], if you have a figure [ with your version ] I will need to probably provide that later.

Yes. That we will also provide. [indiscernible] accounts payable interest and it is part of our income. Of course, as far as capitalization is concerned, that will be a [indiscernible]

Right. Sir, the next question is, as per the last finance ministry disclosure, Bank of Baroda has approved only about INR 8,000 crores under MSME guarantee scheme. But the broader question is, why is the cumulative approval from banking system very slow and is only about INR 1.3 lakh crores still? Are MSMEs declining? We -- declining takeout of funds or banks are more reductive. But some thoughts will be useful based on your discussion with SME clients.

So I think I can only speak for [ Jaipur ] product I think [indiscernible] just now mentioned that of all accounts which are visible, right? And the visibility criteria has very clearly down by the government of India of all accounts that are eligible for assistance, 94% have already been sanctioned loans, right? And more than 60% have already been disbursed. So I think as far as BOB is concerned, we believe that this scheme of the government is a very useful, and we would want to do our best to make sure that we can help our customers access credit under this scheme. So I don't think there's any challenge at all. Now there's been an expansion of the definition, and we made sure that we similarly help the clients who are part of the enlarged definition.

So the next question is again, it's similar, sir, what is the impact of the new regulations of the current account circular by RBI? What will have -- what will be impact on the bank in the medium term?

I think, for us it's a kind of an impact. So I don't believe that there are too many cases where people have got loan accounts somewhere then they have a current account with us, mostly again the other way. So the bank will greatly benefit from the credit discipline that is in instilled among our borrowers. And I think given the challenges that we have had in terms of issues like the available funds, I think it's in the interest of our borrowing clients also make sure that the current accounts are kept with the lending banks.

Let me add on that. I think the report that is coming right now is for all the PSU banks, almost 65% have that credit, but 45% current account. So it's basically in our -- these guidelines are definitely going to be good for us.

So from corporate book 48% of our loan book is corporate and 14% MSME, 62%. So we will be gaining from this circular.

Right. Sir, the next question is also -- there are 2 parts to the question. First is on the current account guidelines, again, which we have explained. The second one is if you can quantify the stress government account for which the bank has made higher standard asset provision. I believe, sir, this also you've already explained. So we can go ahead. Sir, the next question is, what is the other adjustments of INR 700 crore as part of reductions from the asset quality movement?

Yes. The [indiscernible] in current, [indiscernible] part of [indiscernible] that is subject to our investment book. [indiscernible] because we cannot consider this as a recovery. So NPA [indiscernible]

Sir, the next question is, kindly share proportion of -- sorry, kindly share the proportion of your working capital loans under moratorium. This we can share separately or we'll add in the presentation given the need. The absolute amount of global clients of or balance is also shared separately. Is the NBFC added in watch list are domestic exposure?

Yes, indeed it's a domestic exposure.

Sir, the next question is we were quite confident of the NBFC book last quarter, but now we have shown INR 1,800 crore increase in the NBFC watch -- in the -- partly in the watch list in the NBFC sector. What is the reason for this deterioration?

So I think we factored that in any book, there will be some accounts that will be under stress, right? And again, the [ NBFC book ] is what happened. But I would want to emphasize that if you look at the overall loan book and the overall size of the watch list, the overall size of the nonperforming assets, I think the NBFC book stands up well, and that is largely on account of the nature of the NBFC book. As I mentioned before, 90% of the NBFC book is related AA and above. So we are -- that is the reason why we are comfortable with the NBFC book. It is not again that NBFC are not having any challenges, but the quality of the NBFC book that we have, we are comfortable with them. And this one account being put under watch list, to my mind is not, again, any kind of reflection on the overall portfolio. I think if they want to be -- no account on the watch list, I think I will be worried whether we actually are working a [ portfolio capital ] or not.

Right. Sir, the next question is we've already taken it up. What are your views on the current account guidelines issued by RBI. What are the expected gains we'll -- We've already taken this.

I'm sorry, I didn't quite -- say it again, the gains are going to be more in terms of credit discipline, not so much in terms of kind of current account balances. Because if current account is with, then they will go towards -- again, those old levels are coming down. But the credit discipline is invaluable as again for [the bank].

Sir, the next question is, what is the total exposure to the single asset, which is government-guaranteed but delinquent? And we have provided INR 25 billion.

Yes. So the total exposure is of the order of about INR 7,600 crores. Of that INR 5,800 crores I think is guaranteed by the government. And we are carrying today a provision of about INR 2,500 crores again because as I mentioned, the book sales, in first instance, if you do not take an account the NCF will structure, you provide 20%. And after elapsing of certain period of time, this moves by another 15% to 35%. So we have gone ahead and done that. Just technically, [ this P& ]L which is currently there. There's not make a distinction between government-guaranteed account and others.

Right. And sir, the next question is what is the provisioning that we have done for the weak overseas asset?

So I think I possibly answered that question some form. So the provisioning is done as far as standard provisioning norms, which would mean that the substandard asset, the bank provides 20% in the first instance. But in this particular quarter of the INR 2,000-odd crores, which has slipped, about INR 800 crores, INR 900 crores is on account of 2 accounts. One is where we expect to come even 3 months and in the other, it's a restructured account where the structuring is performing over a period of time, even that you get.

Right. And sir, the next part is the residual watch list in the overseas book pertaining to the same book?

The residual watch list, I think I'll just confirm that. I think it's possible, but I just have to look at all the details. I'll just come back to the -- it seems to be another reduction, but we just need to look up that.

Right. And sir, again, this question, which we've already answered this. Apart from that, sir, again, this is the last question is again on the current account framework, how did it impact Bank of Baroda? So that we've already answered. And let me see if there are any few fresh -- new questions. Otherwise, I think we are pretty much at the end of the in this -- check in the next talk. So sir, I think that was the last question, sir. So whatever details we have not provided, we will send it individually you -- to the [indiscernible] exquisite question. And sir, so would you like to give some closing remarks or we can close the call?

I think thank you very much for everybody for being on the call [indiscernible] in the evening. And again, very thankful for you all joining in. Please keep safe, and thanks a lot again. Hope to catch up with you all soon, certainly next quarter.

Right. Thank you, sir. So thank you, everyone, for joining us on this conference call, and look forward to seeing you again. Thank you.

Thank you.