Bank of India Limited (BANKINDIA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Bank of India Q3 FY '21 Earnings Conference Call. We have with us today on the call, Shri A.K. Das, MD and CEO; Shri P.R. Rajagopal, Executive Director; Shri K.V. Raghavendra, GM Finance; Shri Shankar Sen, CFO; and other top management team from Bank of India. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Shri A.K. Das, MD and CEO. Thank you, and over to you, Mr. Das.

Thank you very much. Thanks a lot for joining this conference call on our Q3 numbers. We welcome all the analysts and investors who are all present in this virtually. It's been a long day. I think the day will end with a, I think, exhaustive interactive session with all the analyst friends. And Q3, probably, we are the last one to come out with the results among the PSBs. So Q3, too, has been good like Q1 and Q2. There are lots of positives, which were done in the Q1 and Q2 have been carried forward. Certain new initiatives have also been taken, especially with regard to asset quality with a view to safeguard further possibilities of any kind of shock that we may encounter going forward, this current quarter as also subsequent quarters. Top line, we had a good -- decent growth of about 15% -- 14% and comprising 17% in deposits and almost 10% in advances. Deposits, CASA deposits grew by about 12%. And in the advanced segment, RAM segment grew by 10%, and MSME by 14%, Retail 11%, Agri about 6%. Overall, it's been a good business quarter for us. We have -- like the first and second quarters, we have also stayed ahead of the banking system as far as deposit and loan growth are concerned. Having a fourfold increase in net profit also is a redeeming feature. That too after doing a lot of provisioning upfront and over and above the required mandates, including provisioning for pro forma NPA. Operating profit has been decent, although comparable quarter last year, it showed a decline, mainly because of one-off item, which was there last time around. Otherwise, operating profit will show a growth of about 9%. Our NIM has come -- under Slide 8, it has come down, domestic NIM, but we believe that's a feature that is common to many banks, especially in the aftermath of rate transmission and new benchmark rate like repo. So -- but we feel comfortable that we will bring it back to 2.70%, 2.75% range going forward. And our business growth guidance will be about 8% to 8.5% for this current year. And for the next year, when we expect a lot of demand, it will be in the range of 10% to 12%. Regarding capital, we are comfortable. Regulatory capital is very comfortable. Some amount of growth capital also we do have, 12.51% is the CRAR and 9.44% is the CET1. Of course, we have not factored there the recent INR 750 crores that we mobilized in 81 bonds. We are soon doing as part of our plan for Tier 2 bonds and followed up by a QIP possibly by the end of this month or early next financial year. Overall, it's been a good quarter, where we have done a lot of proactive and PMT provisions over and above the mandates. For example, the pro forma NPA also we have taken due care and we have provided, although, recovery efforts are concurrently on. For example, out of INR 5,800 crore of proforma NPA, we have already recovered INR 660 crore. I think we -- our approach is more skewed towards asset quality, conventional business. But from Q2 onwards, we have been very conscious of the fact that asset quality is going to be a decisive factor as far as our P&L is concerned, more so in the COVID and post-COVID scenario and the Supreme Court standstill. So all in all, it's been a good rewarding quarter for us. We'll consolidate the good aspects in this quarter also with about 40 days left, and we'll try to also improve business further. And volume-led growth, we'll aim at, so that our net interest income also could be improved substantially. I think with this introductory remark, I think we will keep the floor open now to questions.

[Operator Instructions] The first question is from the line of Ashok Ajmera from Ajcon Global.

Sir... [indiscernible].

Sir, sorry to interrupt you, Mr. Ajmera, your voice is breaking. May I request you to come into a better reception area, please?

Yes. How is it now? Can you hear me?

No, sir. Your voice is still breaking. [Operator Instructions] The next question is from the line of Prasanna, an individual investor.

Yes. Sir, this is regarding the development on the buy deposit front. So what is the cost? And what are your -- deposit to the area of the bank?

Yes. Yes. Did you catch?

Yes. See, we have on deposits of the order of INR 60,000 crores, but in the fixed terms, these deposits are not deposits, they are at high costs. These deposits are at a discount to our normal buckets. That's not a regulatory issue.

[Operator Instructions] The next question is from the line of Shashi Chowdary from Security Advisers.

Congratulations on a good stable results.

Thanks.

Sir, what is your guidance on credit cost, return on assets and return on equity as a basic...

Mr. Chowdary, sorry to interrupt you, your voice is not coming clear.

So my first question is what is your credit cost guidance for next 12 months?

I think our credit cost guidance, it will be remaining within 2. It will be in the range of 1.5 to 2. And a lot of provisioning we already made, that is evident from our PCR number. Now first slippages, if any, they will define the credit cost, but we expect it to be within the range of 1.5 to 2 max.

Sir, are we being conservative with PCR without write-off at 83.5% and with technical write-off at 89.3% at 1.5% and 2%? Or we are -- the restructuring book, led by COVID, we are estimating some problems?

So, we are not estimating problems. We had our assumptions at the beginning of the restricting exercise. The traction has been quite less, not as much as we expected. There are not many takers, especially in the Corporate segment and in the Retail segment, too. So we are not expecting much of a problem there. And that is better part. Our provision also has been kept up to date, whether it has been front ended, so to say, to take care of any kind of future shocks. So that way, there are no issues in that. It's an ongoing exercise. Our entire employees are in exit and in the street more now for the next 40, 45 days. So as much as possible, we will do it. So there is no risk upside to that according to us. And as regards to return on assets is 0.28% is now. I think by the year-end, we will expect maybe in the range 0.45% to 0.50%. Because it was on a low base, so it will be in the range 0.50%.

What's your thought process on CASA deposits, specifically main led by the savings account in...

CASA, you see, we got a 12% growth in CASA. And I think that's a fairly decent number. And we have got a lot of support from the government departments and government deposit front also. Many schemes, we are the linked bank. So CASA is not an issue. Yes, current deposits, we are trying to address. There are little volatility in current deposits. Otherwise, savings, we have done exceptionally well.

Now you can give us a guidance on advances and deposits already for the year around 8%. Where are you seeing based on that on absolute number, where gross NPA and net NPA is concerned for the year-end?

Gross NPA number for the year-end, that number, in a worst-case scenario, I would say it will be about 14.5% compared to 13.25% as of now. And net NPA ratio, we will maintain below 3%.

So how are you seeing your treasury income in the coming quarters with the current challenges which have emerged after 11th of January? And are you seeing sustainable number quarter-on-quarter? Or there will be a fair decline in the calendar year '21?

Yes, [ Perry? ]

Yes. The year so far has been very good, and as you said, post January 11. There seem to be some challenges, but RBI is going to continue to [ set quantities down, continue to market it, ] continue with the employment operations and it will give us the opportunity...

Sir, sorry to interrupt you. Sir, may I request to speak a little louder, please?

This is not working.

My last question before I join the queue again. Sir, you made a wage provision of INR 1,856 crores compared to INR 1,503 crores in the second quarter and INR 1,450 crores in the first. Was it this is because of deficit as for the new [ big provision ] package it was signed or is some exceptional increase was there?

There is no exceptional increase, it's only because of the bipartite and the...

Agreement.

Yes. Yes.

Okay. And what would you estimate your annual rate is still around INR 6,000 crores or a little higher than INR 6,000 crores?

Yes, around INR 6,000 crores.

Around INR 6,000 crores.

Not more than that.

The next question is from the line of Ashok Ajmera from Ajcon Global.

Yes, I hope you can hear me now, sir?

Yes, pretty much.

Compliments again for yet another quarter of good results, which requires a lot of offense in spite of gaining only 1 Executive Director in the bank as compared to 4 in the -- some of the other peer banks. So compliment. Sir, I have got a couple of observations and a question. Number one, this 81 bond, you came out with INR 750 crore you collected. It was something about beyond 9% coupon rate, which is, I think, the highest on the PSBs, public sector bank, PSB. So what is the reason for such low collection and offering such high rate of interest, fund rate?

You take it?

Sir, actually, the -- one of the rating was AA-. And if you see some of the banks have taken the coupon at around 8.8% has gone up 8.80%. So State Bank of India coupon was less than 8%. So 81 [ year long ] because this participation is there. So it attracts higher rate of interest. It was 9.04%. So it is on the expected lines because one of our rating was AA-. It is an estimated basis only. But whereas Tier 2 coupons, which we are proposing...

Our rating supports that.

Yes, our rating also supports that.

So the rating is supposed to be upgraded now at AA-?

Yes, yes, yes.

These are 2 different instruments, there are 2 different ratings then,[indiscernible] Tier 1. Tier 2 one we got already AA+ valid up to '23 or '22?

'22.

'22. So to that extent, we will get a discount on the coupon. But here, it goes predominantly to some extent, market appetite, number one, like 1 or 2 banks that just before ours came out and didn't succeed. We've got bids in excess of INR 1,000 crores, but we decided a cutoff of 9.04% and INR [ 750 crores. ]

All right, sir. Sir, what is our collection efficiency in this December quarter?

About 70% overall, but the maximum is 89% in Retail and 79% in MSME. It changes. Every week, it changes, that number, but December, this was the number.

So the performance is lackluster in case of the corporate, isn't it?

Corporate is also same, almost 57%, 58% there. So there are challenges for everywhere. It's never an ideal situation and more so in a COVID and post-COVID -- corporate, sir?

74%.

Corporate, 74%, sir.

Corporate, 74%.

Corporate 74%. Retail is max at 89%.

Okay. Sir, one observation on Note #11, because of the Supreme Court decision. But for that, the gross NPA would have been INR 60,517 crores and a net NPA, INR 13,725 crores versus INR 54,997 crores and INR 9,077 crores. So if you take out the difference, the gross NPA would have gone up by INR 5,520 crore, whereas net NPA also came down by INR 3,648 crore. So how -- I mean, is it -- that the 70% provision almost is already made on this? The difference in the net NPA...

Pro forma increase.

Would be INR 3,648 crore?

Yes, we have made additional provisioning in the pro forma NPA, URI. So that is why it is coming down. Over and above the requirement, we have done the provisioning.

Sir, the gross NPA would have gone up only by INR 5,500 crore, whereas the net NPA difference is INR 3,648 crore?

Yes. We have done upfront provisioning on these accounts. Although we are certain that all these numbers will not definitely crystalize into NPA because the recovery action is on. But as a matter of prudence, we have done the provision on our entire pro forma NPA. So in a way, we will expect, as the things pan out, good number of reversals, of the provision reversal also.

But still you are maintaining gross NPA of 14.5% can be up to the end of the year?

Yes. Yes.

So by the time you think that Supreme Court judgment might come?

Yes, we hope so. We hope so, but we are prepared for the worst.

All right. Sir, next is Note #13, you have given the figure for divergence. Was it required in this quarter? Because I don't think any other bank has given for any RBI audit and divergence numbers. So INR 358 crore in this quarter, I think the difference you are providing, isn't it?

[Foreign Language] When we have the leeway, I think -- it's better for us provide for it. Like we have complied with the regulatory also. That's a plus point rather than waiting for future. So we...

That's not only I'm saying that the profit otherwise would have been much higher, isn't it?

Absolutely. Absolutely. Much higher.

And sir, this operating profit going down by almost -- as compared to the last quarter of INR 350 crores or say, I think, something around the INR 250 crores is only because of that wage -- I mean, salary bill burden? Or is there any other extra item?

Salary provision is not from there. It was basically last quarter, I think, precisely Q2, we had one extraordinary head under which -- that is IT refund, interest and IT fund, we got the benefit of INR 280 crores. But that was not available this time around. I mean, that was a one-off case. So that probably is the only variable. That were not there, the operating profit would have been flat.

Sir, this dispute resolution, that one case of 180 days have not expired as per the new guidelines, as on 31st -- on March 1, 2020 of INR 376 crore, which is this case? Or if you cannot give the name the segment, the industry? Note #15.

Airlines.

Note #15. We'll get back to on this, sir. We'll get back to you. Please inform -- we'll check it and inform. Aviation, aviation. It is in aviation sector.

Sir, this is aviation?

Yes.

And some light on those 5 accounts of INR 203 crore provision has been made on that, those 5 accounts for which the resolution could not be worked out up to 180 days?

NIM is the factor.

[ NIM, ] it's not. But wherever there are some stress or there is some resolution going on, we have provided additional provision - provided additional provision just to be on the safe side here. So that our P&L will not get any strain going forward.

The problem with accounts -- Ashok Ji, those 5 accounts, the problem with those 5 accounts are most of the accounts are in NCLT, I admit, and there you are, okay? And the resolution made, so 180 days [ so that the provincial ] framework [Foreign Language]. So resolution may work because of NCLT line. NCLT [Foreign Language]

[Operator Instructions] The next question is from the line of Jayant from Crédit Suisse.

First question, sir, is the pro forma NPA number. Can you give us the absolute amount that you have provided on this INR 5,800 crore?

INR 706 crore.

INR 706 crore. INR 706 crore.

And sir, on the restructured book, do you have any estimates, -- early estimates on what would be the quantum of this book?

Quantum of what?

The restructure book, the flat restructuring?

As on date, it is INR 10,000 crores, it will continue to be as such.

But you're not estimating a significant rise in that?

No, no, no.

And sir, the SMA-2 number, which has gone up, does this include the pro forma NPA?

Yes.

So that would be only by the quantum of pro forma NPA? Meaning we are not estimating any further stress beyond the INR 6,000 crores in your overall book?

See, of course, in the last quarter, what happens is, see, if you see the trend line of NPA numbers for the bank for the last 3 years, it is actually -- the gradient is downwards. So from that perspective, it will be around INR 10,000 crores, that's what our estimate is, we'll continue to be there as of 31st March 2021.

Okay. And sir, what is your capital requirement? How much is the issue size that you're looking at?

Capital requirement. As of now, we have actually got around INR 750 crores in 81. Ideally, we need around INR 4,000 crores. So we are looking at that. So depending upon how the government is going to respond, we'll take a call on that.

[Operator Instructions] The next question is from the line of Jai Mundhra from B&K Securities.

I have couple of questions, sir. First is on restructuring. So what is the number -- what is the onetime restructuring request that we had received in this quarter? Because I think the restructuring slide that you have given is hardly changed. I mean, so what is the restructuring quantum request that we have received?

There is around 49,425 requests have been received. the amount is INR 6,000 crores.

Okay, Sir. So the amount on how much, sir, INR 6,000 crore?

INR 6,000 crore.

INR 6,000 crores.

Sorry, it is not very clear, sir.

No. The number of accounts where requests have been received is 49,425, okay? And the amount involved there in is INR 6,133 crore to be precise.

Okay. And this -- okay. And any breakup there in Corporate, Retail and MSME?

Retail, it is INR 1,800 crores. MSME, it is INR 918 crore and Corporate sector is INR 3,400 crore.

Okay. And within Corporate, sir, out of the INR 3,400 crore, can you bifurcate into, let us say, a, organized retail; b, power; et cetera? I mean, other sectors that you may have?

You have answered it yourself.

Okay. Also the quantum, sir? I mean, maybe 2, 3, 4...

Quantum retail it will be a little -- around more than 60% of that.

Okay. And this INR 6,000 crore number, this is not there in the slide, right? So -- because these may not have been implemented. The slide that we have given is the number of implemented restructuring, right?

Precisely. Precisely, yes. But however, one thing I can tell you in the slide that we have given, the OTR implemented to the extent of INR 1,178 crore, that is INR 1,200 crores already included in this slide. INR 1,200 is included.

Right. Okay. Right. And sir, now -- and to the next section, which is SMA-1, 2. I think you had clarified that the SMA-2 number that we have given, that also includes the pro forma slippages, right?

Yes.

So if I were to remove the pro forma slippages, assuming they are already there in your pro forma GNPA, then the SMA-2 is only INR 3,200 crore something, right?

Yes. As of that date, 31st December, yes.

Right. And then SMA-1 is also, you have given INR 3,100 crore. But sir, the only confusing part is -- so SMA-1, SMA-2 all put together is like 3%, 4% -- less than 5%, and your collection efficiency is 75%. So does that mean that around 20% of the book is SMA-0? I mean, how should one tie these things?

Yes, that's a great question. 20% is not -- it's around 11% is SMA-0. Because see, there is a lag that is happening because of COVID issue, okay? And many of these accounts are still enjoying moratorium in terms of the RBI guidelines. The payments are slowly coming now. Many of them have got their accounts rescheduled, many of them [ have got their ] deals funded or inter-funded, all that. So from that point of view, your guess is right, but it is not 20%, it is around 11%.

Right, sir. And last question, sir, before I come back to the queue. If you can provide the sectoral breakup of the pro forma slippages of INR 5,500 crores, mainly retail, Corporate, MSME?

Pro forma [indiscernible]. Slippage, agriculture is INR 1,002 crores -- agriculture is INR 1,600 crore. SME -- sorry, sorry, agriculture INR 1,600 crores, SME INR 649 crores, Retail INR 294 crores.

Retail is INR 249 crores, right?

Others Corporate sector INR 2,500 crores.

[Operator Instructions] The next question is from the line of Ashok Ajmera from Ajcon Global Service.

Sir, in view of, I would like to have your views on the -- number one, on the budget optimism, and the announcement of the bad bank, so-called, I mean, asset reconstruction company by the bankers, which will have a sovereign guarantee of the government, that's what, I mean, we understand. How according to you, it will be beneficial to the bank like you? And overall for the banking system or for the credit system of the country, sir?

Bad bank is a concept which is being advocated for quite some time. Although sufficient cleansing of the system is happening, but still banks are holding used amount of [ implied ] assets. Now bad bank is a good concept. I think we have to know the contours of the scheme and all once it gets finalized. We have a feeling that it will be of help to banks in cleaning up further their balance sheet and moving ahead there. We have to look at the contours of the entire scheme. But overall, I feel it will be a positive move.

Okay, sir. The budget optimism, and the kind of amount is going to be spent by the government, and the overall reliance on the deficit financing and giving major [ fill up ] to the growth. With that, we do not change your own credit growth target -- and firstly. And secondly, are you capable of that, based on your own capital base, like how much comfortable you are for growing your credits, your advances?

Yes. First of all, about deficit financing, our budget announcement, that was a dire necessity. Dire necessity was to go consciously for some fiscal slippage, then only the multiplier effect will facilitate the bounceback of the economy. It has happened in many countries. So there are no 2 opinions about that. Now as regards the appetite, I think most of the banks, including Bank of India, we do have the appetite now. We are expanding credit. As I told, in a down market, we have been able to show credit growth of 10%. We are mobilizing more capital now to create that elbow room for further capital for the loan growth. So I don't think there is any issue in that there. That's how I told in the beginning, that we are slightly projecting higher growth -- credit growth in the subsequent financial year, that is '21, '22, anywhere between 10% to 12% should be there.

Okay. Great, great. Sir, that is, I think the first banker who have given this kind of very optimistic growth target. And I think you should achieve it, sir. Just that, just on the [indiscernible] -- it is always my concern, like you see in wholesale banking, if you see, as compared to INR 1,133 crore of loss. This quarter, it is only INR 896 crore, whereas unallocated loss has increased to INR 272 crore from INR 49 crore. So how does it happen? I mean, like what can be unallocated, which can trigger a loss of INR 225 crores more than the last quarter?

We will let -- we will need to analyze that and we revert back to you on this segment.

We have noted down, sir.

Please note down and deliver it back.

Yes, sir.

Did you have a [indiscernible] question? We welcome questions.

Because there is a anomaly -- I mean, anomaly in the sense, there are divergence in the number as figures. So...

Ashok Ji, we will revert back to you on this.

The next question is from the line of Sushil Choksey from Indus Advisors.

Sir, you said that you would like to raise INR 4,000 crores of -- between Tier 1 and equity. What is the ideal number which you're looking for, sir?

As of now, there is nothing called ideal number sir. We need to build a buffer. We got a Board-approved plan, INR 8,000 crores. We need to try out various combinations depending on the market appetite and the evolving situation. We are seeing some successes and some banks are not succeeding. So this is the basic minimum we are trying. We have just started about the capital mobilization last month. So we have got about INR 2,500 crore of Tier 2 bonds, which are due for redemption sometime next year. Then also, we want to take some advanced actions so that capital is not a casualty.

So you're hoping for a rating upgrade to be aligned with both the rating agencies and then go for it?

No, at the current rating itself, Tier 2 bond should not be an issue.

Not Tier 2, I'm talking about Tier 1.

Tier 1, as of now, only we'll go for QIP. That is, I think, early next year, we'll take a call on that. But step-by-step, we'll go. Now 81...

[indiscernible] in this quarter, you mean?

So QIP and the direction -- no direction in this quarter.

Okay. Second, just looking at the [ advances ] growth, it predominantly comes from your international book. Any specific geography or Indian corporates or what advances would you see [ be growing?]

No, international has not grown. In fact, it has degrown. It is only domestic advances, which have kept the loan book growing and growing sequentially.

Sequentially, there is a growth.

There is a growth. Yes, some few centers we have working, but we have a plan of action in specific centers. But again, the bread and butter will come from the domestic scenario only, whereas we have done a good number of sanctions up till now, and we will continue with that. And international, we'll try to revise to its earlier level there.

Sir, your presentation shows foreign advances at INR 45,305 crores moving to INR 51,978 crores. In domestic INR 362,666 crores moving to INR 363,009 crores, the domestic part?

Sequential. Yes. The domestic part, we'll be relying more on because international, of course, there are challenges. Domestic, we can do more so in the [ ramped ] segment. We will do that. We'll go for plain vanilla kind of things, sir. Still, we can show profits, I think, going forward.

Second thing here, ideally, your treasury will secured till what? In HD and otherwise, in what -- are you comfortable to what rate of 10 years will be sir?

The question is at what level [ GSCs ] you are comfortable?

Right. There's nothing like comfort level. And see, we have kind of derisked our portfolio. If we look at the annuation of our sales portfolio is less than 1.5. So even at the current levels, which is 2 today, we have little mark-to-market losses. And even if these hike up by 10 to 15 basis points, it is not going to have any kind of impact on our profits.

How healthy are we on corporate bonds other than government schemes?

How active are we on corporate bonds?

Yes. We have been quite active in the corporate bond sector also because of TLTRO and LTRO.

Sir, other than TLTRO?

Sir, we are taking exposures from corporate on standalone basis also, not really aggressive, but that's more [ confident, ] definitely.

[Operator Instructions] The next question is from the line of Rahul Gupta from Morgan Stanley.

Can you hear me?

Yes, we can.

Two questions from my side. You have highlighted that there are INR 6,000 crore of restructuring that has been invoked. So can you give me what would be the overlap of this number with pro forma NPS? And also, is this INR 6,000 crore already a part of your SMA loan book? That would be the first question from my side.

There are a number of account -- I think most of these accounts are overlapping. And this is also part of our SMA book.

Can you help us quantify what percentage or what quantum of this INR 6,000 crore already could be part of pro forma NPS?

That level of granularity to look at it, we have not got into that, okay?

Okay. Got it. Sir, second and last question from my side. I missed the initial comments of the call. Have you made any provisions for interest income reversals during the quarter?

Yes, we have made. We were already asked that, Gupta.

So what would be that amount, sir?

INR 290 crore.

INR 290 crore.

And that is taken through provision, right?

Yes.

The next question is from the line of Ashok Ajmera from Ajcon Global Services.

Yes, sir, what prompted me to come back again and ask the questions, you just referred this TLTRO. Sir, I have read on the RBI, this recent announcement and policy also, that the TLTRO TAP is going to be running. So are you looking for some more amount because your treasury has performed very well, otherwise also? If you look at the treasury operation result, the profit contribution major is from the treasury. So are you looking at TLTRO is still is open or is closed, TLTRO 1 or 2 for running type of TLTRO?

As of now, till date, we have not [ TLTRO ], and we don't think there will be any reason that we will at this juncture. As and when opportunity arise, we might think of because it is on TAP.

And what are your views on the NBFC funding, sir, NBFC credit loans for the onward lending?

So Q3 is [Foreign Language].

Because sir, most of the things you already explained.

[indiscernible] will answer that question.

[indiscernible] on case by case we will [indiscernible].

[Operator Instructions] The next question is from the line of [indiscernible] from Stockbroking.

Congrats on a decent good set of numbers.

Thank you.

Sir, a couple of points from my side. One is, if I look at the technical write-off pool, it is somewhere around INR 29,000 crores, INR 30,000 crores, if I'm not wrong. So if you could just help understand, basically, any recoveries are expected from these pool, any large recoveries?

Last year, we got one.

Actually, major accounts are from the interior account. Once CLT reservation amount start falling in, at that point of time, we are expecting good recovery [ and we will soon be deploying options. ]

Okay. And sir, in terms of the HFC account, basically in terms of the resolution, what could be our exposure to that?

[ HFC ], are you talking about what NCLT you're talking or is a...

Dewan Housing, to be specific.

Dewan Housing, INR 4,500 crores.

Okay. And basically, do you expect that to get recovered this quarter?

Yes, yes, yes.

Okay. And it is fully provided for, right, sir?

Yes, yes.

Yes.

Okay. And sir, basically, in terms of looking at the corporate book, if I actually look at it, the corporate book, the proportion of the government advances are very high, which we have been growing. If you could just help understand what is the yields that we are generating on this book?

See, it is not less than the average yield on advances that we have in our bank, 7.06%. Most of here is -- except, very rare amounts are not [indiscernible] [ rate ]except that average yield across the portfolio of government accounts is not less than 7.06%.

Okay. And sir, final question from my side. If I actually looked at the corporate book, if I look at the private corporate space, then probably our private corporate lending book has declined significantly since FY '19. I think so it is down by around 30% plus over the last 2.5 years. So can one assume that the corporate asset quality pressures will now not be there? And just wanted to add one more thing. In terms of when the moratorium or the restructuring was allowed, RBI allowed anything to get restructured, which is SMA-0. SMA-1 and-2 was not allowed. So are there any pockets of stress left in the corporate book now after this post restructuring of INR 6,000 crores odd that we are talking about?

No. There have been none. All of them have been recognized. But some of them are still sitting in SMA-2 and -- SMA-2. Of course, once the moratorium goes up, it will actually get recognized as NPL.

Okay. And sir, finally, any thoughts in terms of the credit quality in terms of agri and SME because the NPL levels are generally a little higher?

See, SME, of course, as you rightly said, the major portfolio is micro so there is a lot of stress in because of this COVID pandemic. And similarly, the case is [indiscernible]. This COVID has created a lot of issues in terms of collections for us. So there is a lot of stress over there because collection efficiency has substantially come down in products, okay? So once the restoration happens and then once things come back to normal, the strength that you're seeing in this book will certainly ameliorate to great extent.

[Operator Instructions] The next question is from the line of Jai Mundhra from B&K Securities.

A few clarifications, and then I have 1 or 2 questions here. First is the SMA-1, 2 that we report, is it -- this is for above INR 5 crores and above, right?

Yes, yes. Right.

And then if you were to -- I mean, I think we do not report this SMA-1, 2 above INR 5 crores. But if you are internally tracking, how much that would number be ballpark? I mean, would it be like INR 5,000 crores, INR 10,000 crores?

SMA book you are talking about?

Sir, below INR 5 crores SMA book?

So we are INR 5 crore SMA book. See, traditionally, our SMA book is around 3% to 3.5% of the standard advances, okay? With SMA ratio of around 2%. Because of this COVID and other spreads that we have, there is a 100 bp jump in the numbers. So it is today at around 5.5%, 6%, okay?

Right. All right. Okay. And sir, the pro forma slippages, now I think you would be doing at borrower levels, right, not at facility level? I mean that is the RBI mandate or you can actually do it on facility-wise also, the pro forma slippages?

It is not facility-wise, it is borrower-wise.

Right. I think that is the mandate thing, right? I mean, this has to be mandatory, right?

Yes.

Okay. And sir, now -- and just a clarification, one more. The entire book, right, is supposed to be paid, right, because the moratorium has ended for all segments, all ticket size of customers?

Yes.

No customers in the moratorium, whatsoever?

Yes.

Right. Okay. And sir, just another thing. On Slide 15, where we have given the restructuring number, there is a other, which is INR 5,000 crores. So is this MSME, which RBI had given a window until January 1, 2019? Or if this is something else? What is this?

MSME, it is.

Okay. Okay, right. Okay. And sir, if you can quantify the exposure to this East India-based NCLT -- NBFC, which has bought a stay from NCLT? Because I think that they will not be -- it will not be in the SMA-2 and neither it will be in pro forma slippages, and neither it can be restructured?

It is there in the pro forma NPA, my dear.

Okay. But I think that NCLT has given a stay.

They can give, but they cannot actually -- it is shared status quo is given from recognizing better NPAs. Yes, [indiscernible]. No, SMA, there is no stay.

Okay. Okay. So it is there in SMA?

It is there in SMA, and it is actually taken into consideration as a part of pro forma NPA.

Great. Great. Okay. And sir, if you can quantify the amount, sir?

Around INR 1,000 crores.

And last question to MD, sir. Sir, in the last round, we have been left out -- in the last round of merger and consolidation, we actually were left out. And now we have a probably new round of either -- the [ MSME ], there could be 2 banks which could be privatized. Any thought process, sir? I mean we were left out in earlier round, probably with the media report suggesting that we could be ideal candidates for -- in this round? Any thoughts there?

No, there is no thought as such yet. We think that the announcement has been made. I think we should have a little more patience to wait for the announcement, if any, because we don't have access to any information. Nor have we an official intimated about any such shared proposal as well. So I think the best path will be to wait and wait for any specific announcement. Otherwise, it will be a matter of conjecture.

The next question is from the line of Ashok Ajmera from Ajcon Global.

Yes. Sir, can you throw some light on the performance of our subsidiaries and joint venture in associates, like we have got about, I think, 7, 8 subsidiaries and then one insurance [ Star Union IT ] and the associate companies are also there. Do you have any numbers? Can you give some color, some light on that? Those performance of these so many subsidiaries and the other joint venture and other associate companies?

It is there in the presentation. If you have any specific question about it, we will let them answering that. It's there on slide number 29 onwards is there.

Okay. I must have missed it actually. All right. Anything -- anything you would like to say on the [ Star Union IT? ] I mean, how is the investment doing?

Doing very well, sir. It is doing very well. It has started turning around from last year, and it is further consolidating. Doing well.

Okay, sir. Now going forward, sir, as you said, now 11%, 12% target of the credit and advancing. So it means your reliance, which is there today, only on the Retail and a little bit of SME, will get shifted to the Corporate or -- I mean, some other big advances benefit. What sector, I mean, now you are looking at where you can put in your money? Any [ liking ] on that? Or any...

No, no. Reliance is not entirely on RAM segments. If you go for the composition of our loan book, you will find 49%, in fact, is in retail or RAM segment, what you call, and about 13% to 14% in government and rest are in corporate. It's a good mix. So we will, except for the stress factors identified by us where there are still stress in all, we'll be selective, but we'll go over good rated accounts in good sectors, including RAM, government and other corporate -- good corporate sectors. We're open to that.

The next question is from the line of Jayant from Crédit Suisse.

Sir, actually, my question is on, first, on collection efficiency. What would be our normal collection efficiency run rates pre-COVID? And I mean, when do we plan to -- or when do we see it normalizing? And second question is on NIMS, and follow that up once you are done with those questions.

Yes. See, with respect to this, my -- I would like to share with you something. Our collection efficiency in working capital loans is almost 96% now, okay? Only in term loans, we see still the collection efficiencies at 70% or 100%, okay? And term loans are typically, when we set term loan collection efficiency, 75%, most of them are project loans, where COVID affected the cash flows, and therefore, there is a delay in collection in these accounts, okay? Otherwise, the collection efficiency in working capital book in all -- has already touched almost 90%, okay? And similarly, in other regional accounts and FLTP accounts and all that, we have -- our collection efficiencies have reached almost 90%. So we see maybe in the second quarter or third quarter of '21, '22, you'll be able to actually reach to that original level of collection efficiency of around 96%, 97%, which used to be the usual collection efficiency for bank of our size.

Okay. And sir, secondly, on the NIMs, our funding costs have come off decently in the past 2, 3 quarters, but there's also pressure on the asset yields. So is that largely led by corporate because we're doing a lot of government advances? And how do we plan to go ahead? I mean, is this now the normalized level of NIMs that we will operate at?

No, it is a broad base retail. See, margins are important, but if narrow margins, we have to now start learning to live with lesser margins, like many of the banks in the advanced countries are on. And the requirement will be to push more and more for cost efficiency. Yield in a regime where there is a lot of pressure, a lot of emphasis on transmission of rates, how to streamline the lending rates and all that. So obviously, there will be a downward bias always in the lending rates. It's not any specific segment that has pulled down the yield and advances. It's a general trend. There may be some segments, as Mr. Rajagopal was saying, certain government accounts may have given a lot of fine rates. But those are all -- most of them are matching up to our overall yield on advances. Yes, MSME, definitely, we get more -- and lower -- it is comparatively lower-rated accounts, where we put the premium on the charges. But there is no specific segment that we can expect to give that's the segment which is triggering this fall in advances. And as you will agree, is an advances, the downward trend has been in sync with the ecosystem has also in tune with many of the banks to.

Complement to what's [ these sales. ] If you see MSME loans also got repriced because RBI pushed for RBL [indiscernible], okay? And the retail loans, ADR are very, very aggressive because rates offered across the system. And then what is left is the [ aggregate ] advances and digital advances being stretched anywhere there is a problem there with respect to yield on advances. So it is not that only because we are doing corporate book, there is a pressure on NIMs. The pressures on NIMs are felt across the sector in the asset book. This is not with us. It is the case with every bank that you see. So NIMs, I think, as rightly told by [indiscernible], it will be around -- 2.5% will be very, very difficult to maintain going forward. So we'll have to manage with that NIMs and become very, very efficient in terms of managing with that 2%, 2.5%.

[Operator Instructions] The next question is from the line of [indiscernible] from [indiscernible] Securities.

So my question is -- a couple of question. One. First one is on the recovery front. So you mentioned that you expect the recovery from Dewan Housing this quarter. However, I want to know the recovery expectation from some of the other big accounts like [indiscernible] or maybe Reliance Group? And what is the time line whenever you are expecting this recovery to happen?

Other big accounts, the expectation is not the Q4 '21, honestly, whether it is big accounts because it will take clients time. Most of them were stuck in MCL. Some of them revolution plans are just underway. Typically, the accounts like Religare and other NBFC accounts you are referring to in the NBFC space. The approvals from RBI for the new promoters and the approval of NCLT and other SEBI approval are all going to take pay quite some time. So we are not expecting any recovery during the next 2 quarters or so in '21, '22. It will be our third and fourth quarter '21, '22, some will be [indiscernible] accounts.

Any guidance on the quantum, sir? I mean broad quantum that you were expecting from?

Nothing is on table as on date. So I will not put any number to you for a very simple reason. I don't have any resolution plan in place which can actually will be visible to me where I can actually put a number to the recoveries in these accounts.

The only silver lining there is that we have got 90% [indiscernible] already [ made ] in those accounts. So we'll be also eagerly waiting for some resolution until we start functioning normal course so that we can capitalize on those.

Right. Right. Got it. So if just you can share the exposure to Bhushan Power only?

Bhushan Power, we don't have any export.

Okay. And the second question is, sir, on -- just to get back at the question. So on the [ CDSL ] front, sir, what has been the disband sanction amount?

INR 5,700 crores, I think is the sanction amount and disburse amount is INR 4,800 crores.

Okay. That is cumulative number up to this number?

Yes.

Thank you very much. Ladies and gentlemen, as there are no further questions, I will now hand the conference over to Sri A.K. Das for closing comments.

Once again, thanks to all participants for this virtual conference. And we could get very interesting questions. And one or two, I think we have already advised the department to follow it up and share. Once again, I would reemphasize that we are on strong sustained growth path in Q3 and Q4. Also, we will endeavor to do that. And thanks for all your support, and I'm sure all of you are thorough financial professionals, you will do justice to whatever analysis you do. And please feel free to share with us in future, if anything you feel will help the financial qualitatively. Definitely, we will have more interactions on this to that. Once again, thank you very much.

Thank you very much. On behalf of Bank of India, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.