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

Good morning, everyone, and welcome to the analyst meet for Bank of Baroda's Q3 FY '22 Financial Results. Thank you for joining us today. We have with us, Sri Sanjiv Chadha, Managing Director and CEO of Bank of Baroda who will be leading the call along with the bank's Executive Directors, and the CFO. We will start with brief opening remarks by Mr. Chadha, and a small presentation, followed by the Q&A session. Over to you, sir.

Thank you very much. A very good morning to all my friends. So thank you very much for joining us a little early in the morning. We have our colleagues and let me begin by introducing them. So we have Mr. Ajay Khurana, our Executive Director, who is in charge of Digital Technology and Stressed Assets. We have Mr. Debadatta Chand, who is looking after our Wholesale business. That includes large corporate, treasury and international. And we have Mr. Joydeep Dutta Roy who looks after all the platform functions, including the finance function, the HR, compliance risk, everything. We also have Ian De Souza, our Chief Financial Officer, on the call. So thank you very much once again. And I'll just start with some opening remarks. You have seen the numbers, so we'll not go through numbers. I just put some perspective to those in terms of something, which I believe we need to understand, both in terms of the current context and also how things are likely to pan out in the future. So I think for us, what's really been the key piece in terms of the last few quarters and years has been how to manage the liability franchise at a time where liquidity was abundant. It was easy to get deposits but more difficult to deploy them. So we have tried to be very disciplined in terms of the liability gathering. So if you were to see the composition of the growth in deposits, it has come almost entirely from CASA deposits, from current accounts and savings. And if you would notice again that bulk deposits have gone down very significantly, and that has helped in terms of a very swift repricing at lower norms. Retail term deposit growth also has been contained because we have been offering rates, which have been almost the lowest in the industry. And specifically, because we did not want deposit growth to run ahead of our loan growth. So our CD ratio actually has remained pretty much stable right through this period despite the liquidity overhang. Similarly, the story of the loans has been equally focused disciplined. We are all aware that because of the abundance of liquidity, there was a huge pressure in terms of margins on the corporate book. And it was possible again to lend to corporates. But at times, it also meant that you are lending at negative margins. So we are trying to make sure that we do not particularly tie ourselves into any position, which might cost the bank in the future, when the interest rates rise. And therefore, corporate growth has been a little tepid if we see it on a Y-o-Y basis. On the other hand, we have seen retail grow well at about 11% organically. Within that, home loans have been relatively slow because of the refinancing pressure, which was there on our book. So disbursements were happening, but there was a lot of free finance, which was also happening. And we have been lending base contract for a long time. So the quality of portfolio is good. And they were bought the brunt of the refinancing pressure, which should dissipate now, now that the interest rates are starting to normalize. The auto loan story continues to be very good. I think for past very many quarters, we have reported growth of upwards of 20%. And this is despite the challenges we have seen in terms of supply when it comes to cars. Personal loans is something which is being driven more and more through BOB World, and this is something which, I believe, can be scalable, and we should see very robust growth going ahead also. Education loans for us is, again, a very important franchise. A major proportion of these loans, again, are well collateralized, very good quality. So that's been growing well as has been [ gold ] loans. So overall, we have seen growth, which has been reasonable at about 5%. But the composition of the growth, again, to my mind is what's important, and that's contributed to margins as well. For advances, of course, the concern was for us and possibly for you also that we have grown slower than the industry so far. That was in large measure on account of the second wave, where the first quarter was pretty challenging for us, partly because we were back at more than other banks because of our geographical -- particular geographical spread. But over the last 2 quarters, we have seen the base gathering, and even on the corporate side. You would notice that when you look at the Q-on-Q figures, the story is very different as compared to the Y-o-Y figures. And Q-on-Q, we have had handsome growth almost in every segment, which on an annualized basis would be anything between 15% to 20%. So therefore, we believe that this is something that is likely to continue. And by the end of the year, we believe, we should deliver on our guidance at the beginning of the year, which was that we would want to grow pretty much in line with industry while keeping our margins intact, and we have guided growth between 7% to 10% for our loan book. I think that is the kind of range we should be in going forward as far this year is concerned. So the impact of this disciplined approach has been there in almost every parameter, in terms of the net interest income, operating profit, profit before tax and profit after tax. You would, of course, have noticed that the profit after tax has grown by 100% Y-o-Y this year. But I think what's equally important is what we will see in the next slide that we have been trying to become consistent in terms of our performance, make sure there is more predictability as we go forward. Move to next slide. Yes. Sorry, I think, we have seen the previous slide. That was again the 9-month figures. Yes. These are 9-month figures. Sorry, again, I have decided to change. So this is what you see again in the 9-month figures that the -- it's not that this quarter's performance is some kind of a one-off. It is -- you'll see that there's been something which has been sustained over the last 9 months. And therefore, the growth that we see in terms of the profit ratios over the 9-month period is even larger as compared to what we have seen in the last quarter. The cost-to-income ratio is something which actually has come under a little bit of pressure because of the fact that the treasury income, which was a main state over the last few quarters has now started beating out. So that has, in some way, muted the improvement in the cost-to-income ratio. But as the NII starts, that's picking up, and replacing the mark-to-market gains we were seeing, we believe there is core improvement in the cost-to-income ratio also. Yes. So these are the margins, again, which capture in so many ways in the story that we have seen so far in terms of the impact of the discipline on the -- both the deposit side as well as on the advances side. And also, again, the impact that I discussed in terms of the credit-to-deposit ratio. So our CD ratio, despite, again, abundant liquidity, has remained where it was, and that has contributed to the margins along with the fact that the cost of deposits has come down, and yield has, during this period also, where actually there was -- rates were coming down, has remained pretty much stable. The second part, apart from the margins on account of deposit advances that we have seen is the secular improvement in asset quality. We have been guiding for some time that we believe that there is a long-term trend in terms of the improvement in the credit -- the corporate credit cycle, which is in place. And this trend was, to some extent, obscured by what we saw in consequence of the first wave, the second wave and the third wave. But I think that is now more and more apparent and is being reflected in the bottom line. And this -- and if you look at, again, the slippage ratio, it has been coming down. And right through the COVID period, the gross NPAs and net NPAs have trended downward, which is, again, remarkable in what was at least temporary challenges that we saw. This quarter, you would see that the credit cost has gone up apparently, but that is more apparent than real. The reason is that this quarter, we saw a significant recovery in a government-guaranteed account. And so therefore, we thought it was opportune to make some extra provisioning -- advancing some provisioning, which we believe might be coming in the next few quarters just to make sure that our balance sheet is strengthened. And as I mentioned, we have a little more accretive trajectory in terms of profitability as we go forward. So these are the figures of the gross slippages and the net slippages. I think in the past, analysts, some analysts have been talking about the net slippage figure, although we still again track the gross slippage more closely. The gross slippage, of course, has come down. But what is really remarkable is that possibly for the first time, in a long, long time, the net slippages are actually almost 0, in fact, marginally negative, which effectively means that our recoveries for the quarter have been more than our slippages. So I think this may be a little bit, you might say, again, a bit of a one-off in terms of it being a negative figure. But I think the trend in terms of slippages coming down is likely to sustain. So a consequence, again, of the profits that we have been booking, over the last year also. And we have seen that our capital accuracy remains very robust. We have been doing some issuance of AT1 bonds which are replacing the maturing AT1 bonds. But the impact of the profits of this year is still not there in the figures that you see. So this 15.5% capital adequacy ratio would actually be nearer 16.5% if we were to add back the profits that already have accrued. So to that extent, our profit position is robust. It contributes to our loan growth that we anticipate being almost self-funded. Therefore, as we speak today, apart from what we are likely to see by way of replacement of maturing capital bonds, we don't expect to go to the market anytime soon. We believe our internal accruals should be adequate to support the kind of loan growth we are likely to see in the next year. Our stance on loan growth is that we would want to grow as per market or a little faster while making sure that our margins are sustained or improved. And therefore, if we believe that next year's industry growth rate is going to be in the 10% to 12% range, and we grow by that or a little better. In that case, the kind of profits that we are seeing should be adequate to fund our loan growth. So those really were the opening remarks, very happy now to take whatever questions might be there. Sorry, I think there was one more site coming in. So this is about BOB World. So I think one of the remarkable pieces apart from the financial performance for us has been the rollout of BOB World. You may have come across some of the advertisements. So effectively, this has been a repositioning of our mobile banking to make it a much broader proposition, almost a self-contained digital bank. It has been an outstanding success. So our mobile banking customers who numbered under 10 million at the beginning of the year, are likely to cross 20 million by the end of the year, and cross it by a significant margin. In terms of ratings, the app has been very well rated among the top 2 or 3 banking apps. And a market share in terms of the incremental signings for this -- for mobile banking has actually been 10% as compared to a 6% market share now. And this 10% is what we are talking of after the migration of existing customers to the new app. So it is effectively new customers that we have been acquiring. The advantage of this to us is going to be very significant in terms of transaction costs. Already, as we speak, more than 2x customers visit our mobile app as compared to coming to our 8,200 branches. It's also, again, a very, very powerful channel for distribution of loan products as also for acquiring new deposit customers. We are even today, as we speak, acquiring hundreds of new deposit customers for the BOB benefit bonanza account, the BC account, which is acquired to -- with the KYC and where we actually service the customer almost entirely digital. It is designed to be only digital account. There are some costs, if you were to conduct at a branch, but there are enormous benefits like maybe a net fixed subscription or a bank-now subscription, which come depending on the minimum balance you keep in this account. So this has been very successful. Similarly, on the asset side, an increasing percentage of our retail loans, in particular, are now being -- customers are being acquired to BOB World. So even as we speak, 28% of our home loan leads, which gets converted, are coming through BOB World. Now this has a tremendous impact in terms of both acquisition costs as also in terms of customer satisfaction. So this is going to be a very, very powerful instrument for us, and a big focus. We expect that within the next year, a large proportion of the addressable client base of the bank in terms of customers who actually could be using mobile banking as the first port of call, should get booked onto BOB World, and which would mean the opportunities of cross-sell of saving transaction costs should expand tremendously as we go forward. So that is all. Thank you very much.

[Operator Instructions] First question is from Ashok Ajmera.

Congratulations, Chadha sahab. Congratulations mainly for this BOB World. You have really come out with a very, very powerful digital platform which is, I think, among the public sector banks, maybe second to State Bank in the times to come. So having said that, I have certain -- of course, the results are reasonable, not something very outstanding, as you yourself said that you are very selective in asset quality, and the loan book and the corporate book also has not grown the way it should have been. But the future is bright. Sir, my major question is on that when the pressure is there on the treasury operations, now the kind of profits which you used to have is no more seen in the near future with the interest rate hardening. So to offset that, you will have to go a little more aggressive into the -- on the loan book so as to get the profitability in the bank. So this is my first question. But since the moderator do not permit too many questions, I just ask a series of further 1 or 2 questions. In the budget, there is a major thrust on the CapEx are almost about INR 195,000 crores CapEx investment is proposed, bringing it to the level of INR 750,000 crores. So that is also a very big opportunity for the bank, and how the bank is weighing it for the future. Going forward, it is beyond that 9% to 10%. Can we not expect a growth like 12% or 13% with this kind of push given by the government? My third is on the digital currency to be issued by the Reserve Bank of India. How disruptive it will be? Have you made any assessment in last few days? Or will it change the way we do the banking? So these are my couple of just questions and observations. Because your CD ratio is almost at 78.5%, or something 78.25%. So unless you grow both ways, the profitability of banks may come under pressure apart from the recoveries from the written-off accounts, or the old recoveries, which are coming in. And the last is, how are we placed on -- is big provisions which we have done for the, I think, the future or [ Shri ]? Or what is this data of NCL, national asset recovery company?

So thank you, Mr. Ajmera. Always a pleasure, again, to meet you at the head of meeting. So you're absolutely right. I think the loan growth is very important. But if you were to look at the Q-on-Q figures that we discussed, right? That is something which I believe we need to pay attention to. So Q-on-Q, our loans have grown -- domestic has grown by 5%, and international by 6%. So as I mentioned in my opening remarks, we had a bit of a challenge in the first quarter because of the second wave of COVID. We were impacted more because of where we sit as a bank in terms of geography. But both in the second quarter and third quarter, we have seen very good quarter-on-quarter growth. So therefore, I believe that if you would look at those figures, where we have grown reasonably quickly, including on the corporate side, I think that seems to cover well in terms of loan growth. The second part is at the end of the day, the proof of the pudding is in the eating, right? Why is loan growth important? Loan growth is important because it helps you grow your net interest income. If you see our net interest income, it has grown by double digits. So this is despite the fact that the loan growth has been -- has tepid again. There's no doubt about that. So you have 2 choices, right, that you could grow your loan growth, your loans faster, it could be at the cost of margins. The question is, which is the best balance for a bank? How do you make sure that your NII actually grows where it needs to grow, right? So I believe we have been able to get that balance right, which is why our NII growth actually is double digits. It compares reasonably well with most of our payer banks, right? So that's number one. Number two, in terms of the government expenditure in terms of infrastructure, I think, it's very important. I have said before that even if we see where the areas we have seen loan growth, it's in large measure in areas which have been enabled by government intervention, government expenditure, and government having created an enabling environment. For instance, we have seen a large amount of loan growth as far as roads are concerned. Now that is because of what the NHAI has done both in terms of making sure that it comes up with a construct like HAM projects, where, to a large extent, the traffic risk is taken out again as far as both the contract is concerned as well as the bank is concerned, right? And also, the expenditure outlay, which there -- has been there on account of rules. Similarly, we have seen a large number of proposals of renewable energy. That, again, is on account of the fact that there's been enabling environment created, and PPAs are being signed by SEBI, which means that, again, the market risk gets taken out. So I think going ahead also the expenditure allocation that the budget has made on infrastructure should be enabling, again, growth of loans for the banks and also, hopefully, triggering off the private investment cycle, also. We have already seen the second order impacts even in the current year, which means that we have seen large brownfield expansion projects being announced for steel, for cement. So I believe that this improvement that we should see on the back of the government's commitment to infrastructure should start populating in the broader economy and private capital expenditure. Your third question was about digital currency. I think early days. We need to see what is the contour of what the central bank digital currency is. So I think I'll reserve my comments for when we know and understand the implications better. The last question that you raised was about the fact that a CD ratio is 78%, and therefore, how might the hardening of interest rates impact us, particularly since strategy regains are going to peter out? So you're absolutely right. But this is, again, you might say part of the normal normalization of the interest rate cycle that we see every time. Whenever the economy improves, the interest rates will normalize. And as a consequence, there should be an improvement in both loan growth and in net interest income, which should help general proposition, compensate for the decline of treasury gains. If we were to, again, look at it, you might say, in order of preference, I think, for banks rising interest rate, normalizing interest rate regime is better for the simple reason that while if an interest rate comes down, assets get repriced faster than liabilities and therefore, you lose out in terms of margins. When interest rates rise, the opposite happens, that the asset repricing takes plays faster than liabilities. That actually has a positive impact on margins. And we believe that should be the case also, this time.

And sir, on this recovery and this your national, et cetera [indiscernible] how much amount you are bringing in this current quarter? Provisioning on the, I think, [ Shri ] and future group, I think, if you can comment on that.

So I think as far as the provisioning on the NBFC, where initially the asset classification was put on hold by the regulator, we have utilized the recoveries that we got on a large government-guaranteed account this quarter to fund that. And therefore, again, we are fully provided there. As far as, again, the retail chain some -- there are some discussions in the Supreme Court. This is something where I believe that while they may be a one-off impact, again in going ahead in this quarter, the broader improvement in the credit cycle that I alluded to, the fact that overall slippages are coming down, right? And therefore, provisioning is coming down. Credit costs are coming down. I think those improvements are large enough, broad enough for us to take care of any additional provisioning requirements that might be there. I don't believe that's too much of an issue. Wherever you have -- in any quarter, again, you will always have something by way of -- again, a one-off extra or you might be getting a benefit also. We have been fortunate at times that they actually coincide that they did in this particular quarter. So I think the reason we segue and reassured as far that is concerned. And when it comes to NRCL, I think -- for us, the impact is not very large. We are not holding my breath in terms of when it happens. Whenever it happens, it's going to be a positive, but I believe that the group [Audio Gap] an improvement in the corporate credit cycle is a much more powerful cycle, which is happening, and that will have a much bigger impact as we go forward.

The next question is from [ Nilanjan Karfa ].

Sir, a couple of questions. First is on the net interest margin, are there a few one-offs? And how do you see that pan out assuming [indiscernible] Paribas on the yield curve? So that's one. Second is we are growing the personal loan book from a very low base, understandably. So the growth is looking large, but a couple of pointers will help. So what age profile are we doing this. For example, if you could talk about the split between salaried, government salaried, corporate salaried and self-employed. Any color on metro versus nonmetro, right? And a broad sense of what's the average ticket size or the -- as well as the yields. So a couple of points just -- and finally, the -- what kind of recovery from written-off assets or gross NPLs are we looking at from the next-year perspective?

Yes. So thank you very much. So I think as far as net interest margins are concerned, there is a one-off which is there in this quarter. That is on account of the recovery I mentioned in the government-guaranteed account. The impact of that would be somewhere in the region of about 10 basis points. But I think what we see again is that there is a significant improvement, which is happening broadly. And that, as I mentioned earlier, is being driven both by the deposit costs coming down and also again, yields picking up. So I think broadly, if we were to say that the 3% and north of 3% is the current net interest margin. And I think we have discussed in the previous quarter also that you may have one-offs, but this is where our net interest margins ought to be, and that's what we have been trying to protect. I believe there is scope for some improvement on this going forward. The reason again is, as I mentioned, we should be seeing a little bit of pricing power returning to banks because of the fact that the large liquidity overhang, which was there, which is impacting the corporate segment in particular, that should start to dissipate. So we believe that the current level that we see even if we were to include the one-off, right, I think that is sustainable, and we should be seeing some improvement going forward because we do intend to be as disciplined in terms of our underwriting as we have been in the past. The second thing, which I think is important is the composition change which has happened on the liability side, is something which will give us a sustained benefit going forward. So when we entered COVID, right, 2 years back, our CASA ratio was 37%. Today, it is 44%. So that means that even when deposit rates start getting repriced, and they will at some point in time, there is a larger proportion of our deposit base, which is largely protected against that rise because that is going to impact the term deposits a little more. That's number one. Number two, I think, there's still -- I think, they are significant banks where the current deposit ratios are relatively low. And therefore, again, I think, the pricing pressure on deposits should not be manifested immediately. I think there'll be some time before that is likely to happen. And therefore, there should be a broad coordination between the liquidity overhang, dissipating credit growth picking up, and possibly then the positive repricing happened. So I think that, to our mind, again, we should be able to sustain margins. So that's number one. In terms of personal loans, you are absolutely right. I think the factors that we have started from a very low base. But what is happening is -- and as an answer to another part of your question, that this personal loan is now being delivered largely through BOB World in an increasing proportion. And that's something which means that it is being -- it is almost entirely to our existing bank customers. So these are, again, seasoned customers where you have our track record. And based on that track record, you decide how much loan to give to which person. Therefore, in terms of quality, the quality is very good. I think not only for us, you would have seen in some other banks also that almost counterintuitively, the unsecured personal loans, the default rates are lower as compared to some of the secured loans, right? That's again because of the kind of client that you targeted against. So I remain fairly positive again in terms of the credit quality as we go forward. Of course, with the added advantage, that these are short-term notes, and you can recalibrate your stance if you believe that needs to be recalibrated. So in terms of the composition of our client [ field ], that's almost exactly in line with our -- the composition of our existing customer base. In terms of urban versus rural, semi-urban, I think, this is anecdotal. I believe it would be -- since again, in terms of the offtake of BOB World in particular. It has been more, first, of course, in the large urban areas. To my mind, it will be more in urban areas, but I think we can come back with those set of figures for you going forward. Was there another question, again? I think haven't thought...

Average ticket size. Average ticket size.

Yes. So average ticket size, we started off with small loans, right, which were only up for INR 50,000. So as of now, most of our book is up to that. But now we actually have transitioned again to larger ticket size up to INR 5 lakhs. But I'll just request Rana G, again, who is heading our digital and technology piece, to possibly confirm that.

Yes. You're right, sir. Actually, initially, we started with micro loan, and it was INR 50,000. And then we started extending to INR 5 lakhs. Now it is INR 5 lakhs, the loan, we have been sanctioning. So ticket size is -- now it is increasing, but it will be somewhere around INR 2.5 lakhs to INR 3 lakhs. This is what presently average is like. But exact number, of course, we can provide you separately. This is what is going. And because all the -- 96% of our PL is coming from our digital channel that is BOB World. So they are -- and existing customers, where we have been normally this is preapproved. So we have taken their track record as well as the civil law and everything, we have verified and then only we have given them in this category. So over this portfolio, it is likely to be very good as compared to other products.

Yes. So I think we also have Mr. Khichi, our executive, who is in charge of retail who has joined us, and his insight into, again, the earlier parts of your question in terms of what is the distribution between rural and urban demographic profile. And also, again, how do we -- in terms of the unit size, I think, it will be very, very instructive. So I'll request Khichi, again, to just have to answer this question.

No. Thank you, sir. In fact, that average ticket size Mr. Khurana has said, we have just started off with those mini PL that is above INR 50,000 to INR 5 lakhs, but still we got to cover a lot of ground there, but majority of the lowest preapproved loans to the existing customer where we do know the entire profile. And that has been in the range of INR 50,000 micro loans. So the average ticket size still would be in the range of INR 50,000 to INR 60,000, we have yet to build up on the mini PL side. As far as the demographic is concerned, sir, I think, almost 90% of the loans comes from the urban area at the moment where we have to -- since it is through BOB World, I think, the adoption in the urban areas is almost 90% -- I mean, of the total composition, 90% would be coming from the urban areas, and yet to pick up from semi-urban and rural areas. [indiscernible] is very good and that the delinquencies in this personal loan had been lower than what has actually experienced in the auto loans, also.

Right. Khichi, sir. Just wanted to reconfirm. You said 50,000 number of loans is it?

No. No, no, no. INR 50,000 amount. We started out with the micro personal loans that was -- limit was INR 50,000, and [indiscernible] approved. Now we have -- after having consolidated on that position, we have now graduated built up on the mini personal loans, started off with that.

Sure, sure. That's very helpful, sir. And the final question that I asked, sir, the kind of recoveries we might see from the pool of assets.

Yes. So I think there's no doubt about it that the first, you might say, phase of recoveries which was largely again powered by the NCLT accounts. That is largely behind us, right? So I think in terms of large chunky recoveries that we used to see in particular quarters, I think that is unlikely to happen going forward. In terms of recoveries for this year, we had budgeted about INR 14,000 crores for the year. We have already crossed that in the first 3 quarters. So I think the recovery climate is good. But again, as you generally see, then the economic cycle improves, recoveries -- businesses benefit, recoveries do pick up. So I think we should see an improvement, but I don't believe that we will see the big recoveries at this quarter-to-quarter basis. Having said that, I think, it's important to juxtapose slippages against recoveries. So as I mentioned in my opening remarks, this is the first time that we have seen net slippages as a negative figure, which means recoveries were more than the gross slippages. So I think both these trends should be happening in tandem. Recoveries will start leveling off. There'll be smaller recoveries. Overall quantum may be lower. But that were more than offset by the improvement in credit quality and -- which is likely to be there, [indiscernible] likely to be lower. But I, again, request Mr. Khurana, who looks after stress assets portfolio also apart from different technology to give his own understanding and his prognosis for the future.

As [indiscernible] sir told, these one-offs, of course, a few were there in our NCLT and big accounts, which are unlikely to be there next year. But there are accounts which are likely upgradation from those of you who were restructured. So that -- those some -- we are going to get some accounts there as well as our recovery in smaller accounts in MSME and retail, which were in Q4 of last year and Q1 of this year, which are [ EBITDA ] slippage was there. There we are getting a very good recovery in the smaller account also. So we -- like a recovery is likely to be -- is likely to remain there. And even in our return of account also, we are gaining almost same recovery we are expecting at next year also.

The next question is from an Manish Agarwal. Please share some update on standard restructured loan, COVID and MSME put together. And the second question is, what is the outstanding standard asset provision, including contingent provision, if any?

So pass it on, again. Khurana G?

All totals put together, corporate, MSME restructure, which are even the previous year as well as the last year due to COVID. It is total around -- it is INR 20,648 crores, which is around 2.65%. And there also -- majority of the accounts are standard. They are running well. And regarding this restructure provisioning, we have got around INR 3,000 crores restructure provisioning is there, in our book as of now.

The next question is from Mahrukh Adajania.

Congratulations. Sir, my first question is how much of provisioning reversal on the government-guaranteed account has happened, total?

So we reversed a total provision of about INR 1,300 crores. I will again request Joydeep to confirm that figure. But as I mentioned, we took the opportunity to make some advanced provisions, which was almost equal to the amount. So in terms of the net impact as per this quarter is the second sum, that would have been margining.

Sure, sir. Sir, would there be any pending provisions to be reversing in 4Q on the same account?

Yes. There are likely to be some provisions, which are likely to reverse in the current quarter.

Okay. But would that be of a similar quantum?

Broadly, yes. And this is, again, what I would want to emphasize that -- and this was to an earlier question in terms of some possible slippages of some large accounts. As I mentioned, again, we believe that it's been providential that we have had almost a counterbalance as far as the 2 items of entry are concerned. We believe that it is quite possible that should there be any mishap in the next quarter, this should be adequate to take care of that.

Sir, just to clarify on restructuring. Would this figure that you gave include restructuring in prior schemes, that is other than OTR-1 and OTR-2? So what is OTR-1 plus OTR-2 plus any other restructuring standard?

Yes. Yes. So yes, sorry. Yes, please. This is a bit complicated for me. So Khurana G, again.

Yes. Mahrukh, this is all inclusive. It includes everything.

Got it, sir. And sir, just one last question. What would be the yield on tenure GSEC? Up to which year AFS portfolio is safe, and will not make any MTM loss?

So tricky question. That's for our CFO. I'll hand it to him.

I'll request Chand sahab who looks out to treasury to just reply to that with.

Yes. See, just to give you a answer to your query, as on December, the tenure was at 6.47%, right? So currently, whatever we have provided has already 6.47%. And again, a fairly large component of the proposal in December is out of the international [Audio Gap] in our investment side. So the portfolio is fairly [indiscernible] in terms of ending a higher interest rate product exactly. I mean and that's [Audio Gap] bank like the structures and for the bank.

The next question is from Mona Khetan.

So my first question is on the BRLLR-linked loan. What share of your total advances would be BRLLR-linked? And what would be the benchmark here?

Okay. Khichi sahab, mind -- do you want to take that?

Sir, all the retail loans are now, they are BRLLR-linked and MSME also. So as far as BRLLR-linked loans are concerned, sir, INR 130,000 crores and [Audio Gap] crores should be in the BRLLR-linked.

Yes. So that's about 35%. So nearly 1/3 of our advances are general about this, right? That would be what we would look at?

Yes.

Perfect.

Okay. And this the external benchmark here would be [Audio Gap]

Yes.

Okay. And how much would be NCLR and fixed rate as well if you could just share that?

I think fixed rate would be a very small proportion, but I'll request Ian to possibly again give you the figures off-line.

Okay, sure. And just finally, if you could share the ECLGS outstanding. And how much was the disbursement this quarter?

Khichi sahab?

Bank as a whole, we had actually sanctioned around INR 12,500 crores of ECLGS, and INR 11,500 crores approximately was disbursed, out of which around INR 10,000 crores would be actually outstanding at the moment, and out of which around INR 8,000 crores would be coming from MSME and the remaining from the large corporate. Did I answer your question?

The next question is from Jai Mundhra.

Sir, last quarter, in our notes to account, we had said that there were 2 accounts which were stressed, but standard, and we had a reasonable large amount of provisions there. So that was like -- we had mentioned that INR 1,150 crores comprising 2 accounts, and which has now come down to very miniscule like INR 50-odd crores only in these notes to account. But at the same time, the corporate slippages are only INR 600 crores. So I'm just not able to reconcile this. So what actually happened with respect to these 2 accounts?

Khurana sahab?

No. Actually, just extend that these 2 accounts are including in that to INR 648 crores only. The provision was more because of their nonfund base. That is not presently showing as outstanding. Provision was higher in that. So that has been shifted now to NPA. These are the -- both accounts have been shifted.

Okay. Understood. So -- and now, sir, on this, what is the state -- I mean, the provision -- what is the provision that you are carrying against the retail -- large retail stressed account, which sir mentioned, of course, there's a possibility that it might slip in fourth quarter?

We have been -- we have already provided 20% in that.

Understood. And the exposure will be, sir, roughly? I mean is the same account, which is mentioned in the notes to account, which is still standard, and you have decent provisions, also?

I don't -- it is around INR 1,600 crores.

Understood. Okay. Great, sir. And second question, sir, is on capital. So if I see your CET1 in absolute amount, it has -- YTD, it has gone up by around INR 100 crores or INR 110 crores. And we, of course, have a much higher PAT than that. So what is the movement there? Are we netting off the family pension -- outstanding familiar pension there? Or how does it work? I mean the CET number calculation, sir.

Ian, please.

So -- can I take this as well?

Yes Ian, please.

So basically, the CET number has a regulatory deduction. So we've had a reversal in regulatory deduction of around INR 450 crores. And yes, we are netting off the unamortized balance of family pension, which is around INR 75 crores per quarter, and to impacts, you would see that.

Sure. And are we -- the CET number that is there, does this improve 9 months PAT? Or...

No. No, it doesn't. It doesn't. We said in our opening remarks. It doesn't include the INR 5,494 crores of PAT. If we had to include it, overall capital adequacy would be around 16.4%, but it'll be included with the full year profit at the end of the year.

Just a clarification, sir. Sir, on this government sovereign guaranteed exposure, how much of that has gone into NII? And I think, is there any other impact which is there in the NII, or rest of the entire thing is mostly organic or sustainable?

Yes. So I think I mentioned in my opening remarks that this one-off has an impact of about 10 bps on the NII for the -- on NIM for the quarter. So the impact on NII would be INR 300 crores, the rest is pretty much organic, as you said.

Ladies and gentlemen, that was the last question. I request Ian De Souza sir to give the word [indiscernible]

Thank you. Thank you, Sneha, for that. Thank you, everyone, for attending this call. It was an early morning call. And we are very heartened to have reported such good performance in this quarter. If there are any questions that remain unanswered due to paucity of time, please feel free to reach out to me and my team, and we will take them off-line or those separate one-on-one, if merited. So thank you very much, and I look forward to seeing you again next quarter.