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

Ladies and gentlemen, good day, and welcome to the Bank of India conference call. [Operator Instructions] Please note that this conference is being recorded. We have with us today on the call, Shri A.K. Das, MD and CEO; Shri PR Rajagopal, Executive Director; Shri Swarup Dasgupta, Executive Director; Shri M. Karthikeyan, Executive Director; Shrimati Monika Kalia, Executive Director; and other top management team from Bank of India. I now hand over the conference to Shri A.K. Das, MD and CEO. Thank you, and over to you, Mr. Das.

Thank you very much. Good afternoon to all the analyst friends who are on this call, ladies and gentlemen. I extend a very warm welcome to each one of you for today's interactions and share with you the financial results of the bank for second quarter of financial year '21/'22. I believe you all have the presentation copies with you. To a great relief for all of us, the second quarter witnessed certain positive developments with abatement of COVID infection, acceleration in the pace of vaccination and above all, rebound in economic activity. The progress of monsoon has been conducive for agriculture production, and the industrial production continued to show a high Y-o-Y growth. The manufacturing and services PMI stood above 50, indicating expansion in commercial activities. The headline inflation has sober down during the quarter, although core inflation remains an area of concern. The policy support from the Government of India and the Reserve Bank of India continued in favoring growth. The banking system credit growth, however, is yet to speed up, although the position has been a bit better than the last year. Till 24th September, the YTD credit growth has been 0.1% and Y-o-Y credit growth at 6.7%. The credit outreach program being connected by banks during the current festive season is expected to translate into higher credit growth in coming months. In the above backdrop, the bank made a steady progress in its performance during Q2 of FY '22. It's quite heartening to announce that the bank's net profit during the quarter almost doubled to INR 1,051 crores Y-o-Y. There has been a sequential improvement in NII and NIM. The global NIM improved from 2.16% for Q1 to 2.42% in Q2. The return on assets improved to 0.53%. There was a reduction in NPLs, both quantum-wise as well as percentage-wise. The gross NPA ratio came down to 12% from 13.51% in June '21, and the net NPA ratio improved to 2.79% from 3.35%. Slippage ratio dropped from 1.09% in June 2021 to 0.36% in September, and credit cost declined from 0.95% in June to 0.26% in September. During the quarter, the bank successfully raised QIP of INR 2,550 crores and Tier 2 capital of INR 1,800 crores, thus elevating capital adequacy position of the bank to 17.05%. All these positive developments were supported by proactive change in business strategy, continued efforts for slippage and NPA management. On business side, the bank has made a conscious move to pare down the deposit base, especially the bulk deposits, which was brought down by over INR 16,000 crores in the half year. Of course, it had its impact in terms of lower business growth, but it helped us in improving the bottom line. On advances front, RAM advances grew by 10.45%, and overall advances grew by 2.7%. The bank's operating profit for Q2 FY '22 stood at INR 2,678 crore against INR 2,749 crore in previous quarter and INR 2,831 crore in Q2 of FY '21. A few pertinent points I would like to mention that during the current quarter, that is Q2, we had to make INR 130 crore additional provisions, comprising INR 80 crores towards depreciation/fluctuation in investment as for the revised RBI guidelines and INR 50 crores for increase in family pension ceiling. But for this, operating profit during the quarter would have shown an increase over the previous quarter. Similarly, during Q2 of FY '21, we received a onetime income of INR 283 crores by way of interest and income tax refund. Therefore, decline in the operating profit during the current quarter has to be seen and interpreted in these perspectives. Coming to guidance for our business growth during the current year. There will be acceleration in advances growth going forward since through a series of outreach campaigns, which we have conducted for the last 2 months and which we'll continue for the coming months as well. Sufficient momentum in the field level has been generated. We expect our overall advances to grow by around 6% to 7% during the year. The bank's slippage ratio is expected to come down to around 0.3%, gross NPE ratio to further drop to below 10%, and net NPA ratio to around 2% by March '22. With favorable business composition, better collection and recovery mechanism, we'll be able to enhance our NIM to around 2.6% to 2.75%. I once again, thank you for all your continued support, and wishing you festive greetings. Now I request, the floor is open for discussion. Thank you.

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

Congratulations to you for really a fantastic performance this quarter too. I mean, the last quarter was also reasonably good. And this quarter, definitely, you surpassed some of our expectations, especially on the operating -- on the net profit front. And overall performance, the ratios are all under control. Having said this, sir, there are some information point which are there at this time with almost every bank. Can you throw some light on the total amount of outstanding of Srei? And how much of provision has been made on that and the recovery of DHFL of cash as well as the bond? And what treatment has been given to the bond, which are received from Piramal? This is my first question. If you can answer it, I may ask a couple of other questions also, sir.

Okay. Thank you very much, Ashok Ji, for your encouraging words. I would request our ED, Shri Karthikeyan, to respond to specific question.

The exposure to Srei is INR 964 crores, correct, and we have made a provision of 50% on that. And -- what was the...

DHFL.

In DHFL, our recoveries were INR 1,888.83 crores of which of INR 857 crore was cash and the rest was the bond.

And sir, what is the treatment given to the bond? These are the 10-year bonds which were issued from Piramal. So it has been taken in the securities. And any mark-to-market has been provided on that, taking the entire balance amount in the income?

Yes. This is Sasidharan, General Manager Treasury. Just this bond, which has been issued by Piramal has been taken into our books, and we have kept it in the AFS portfolio. Accordingly, this has suffered market effect depreciation. We have kept the value at INR 79 as per the market value for that particular day. So to that extent, around INR 215 crores has been provided in this particular script. Recently, the DHFL is trading at around INR 88. So there is a bit of appreciation in that particular bond. This is what I would like to talk about the bond issued by Piramal.

That's great, sir. I mean because you provided for almost about 21%, and now it is going up. So it is a tradable commodity now. So I think -- and with the Piramal name attached to the bond, I don't think there will be any major discount in future too. That's a very heartening thing. Sir, in case of Srei, when I think basically, the provision required statutory really was only 15%, but almost every bank has provided 50%. Only one bank, I think, has done so far, 40%. So is there any message from the regulators to do that 50% kind of provision? Or if you stand alone on your own decision? And secondly, why do you expect that it was to be written off? Or we provided for to that great extent of 50% when the recovery prospects are -- should be much higher?

Sure. See, there is no such any pressure and all. It is a proactive provision by the bank. And you know very well that the adviser has been put up by the regulator. So things definitely is taking a good shape. And we feel that similar to what had happened in DHFL, this -- Srei also will get into a good mode pretty soon. So there is no such. It is a proactive measure for the bank.

Ashok Ji, I would also like to add here. It is always prudent to provide proactively good time.

No, no, that is always good, sir. And...

We have to the tune of, I think even in other standard accounts, we have provided about INR 630 crore. We have seen the benefits of early provisioning, so that in case there is any shock we can absorb it. Otherwise, we'll have to face awkward questions again. So we thought better to provide for it and have a provisioning buffer with us.

Yes, sir. No, no, sir. Point well taken sir, and it's definitely a good move. Only for clarification, I was just asking. Sir, my one question is on, sir, this non-SLR HTM has gone up by almost about INR 3,500 crore to non-SLR HTM. What is the quality? Can you throw some light on it, Mr. Karthikeyan -- I mean, sorry, the investments or MD sir?

Hari, you can or Sashi.

Non-SLR HTM has increased by about INR 3,500 crores, the investment.

Yes. Yes, sir. Again, see, one is the recapitalization bonds given by the government -- from the government of India, that has given about INR 3,000 crores, that is classified under non-SLR. The other is in the -- first question, you have talked about the Piramal bonds. That is also Non-SLR, which that is about INR 1,030 crores. So that is why the addition in HTM portfolio in the non-SLR portfolio, the amount [ has gone ].

Okay. Okay. Not to any private sector or any other bond? Yes, yes, that's a good clarification. Sir, our advances in the power sector has gone up by -- in this quarter by INR 3,700 crore, if I'm right, reading the figure. So what kind of this is to the distribution generation? Or I mean, private sector or government sector power company?

Majorly it's to the distribution company secured by the government guarantees.

All government guarantees?

Yes.

And sir, in this round, my last question is on the provision of taxation. The income tax, it has been provided at INR 733 crores, which comes almost about 45% of the profit before tax as compared to around 30%, 32% in the last quarter. So is there any -- somebody can throw the entire light of the entire 6 months of taxation of almost about INR 1,100 crores, how it has been calculated?

Yes. CFO, please clarify.

Our DTA is something around INR 10,000 crores. So what is the question actually. Yes. See, actually, what happened? On adjusting for provision tax rate is under dispute. That decision is yet to come. So considering that decision may come in [indiscernible]. We have taken productive call in keeping up tax provision higher based on the suggestion given by our tax consultant.

No, it is a decision by tax -- no, decision's is pending at -- in the appeal? Or in the...

High court, it is pending.

It is in the high court, in the appeal.

Right.

Okay. All right. So that might I mean -- okay. I mean, we might receive rather...

As far as banking parlance as a whole, it's not for our bank per se. It's for a national bank. However foreign [indiscernible] whether it can be allowable expenses or not that decision is under trial at the high court level.

Our next question is from the line of [ Deepak Kumar Taparia ], an individual investor.

Can you give me the current book value after removing the DTA and revaluation results?

Do you have it with you, right now, -- Deepak Ji, if you don't mind, we will follow it to you or after some time once. Readily, is not available with us.

Approximate, sir. Approximate.

See, approximate without FCTR and our preliminary expenses, it would be something around INR 85. And if you consider those elements like FCTR and other preliminary expenses, then it will be something around INR 126, INR 127.

Yes. But yes, after adjusting to DP and everything, it is INR 85?

Yes. Yes. It is INR 85.

Yes, yes, yes. Sir, in this quarterly INR 1,000 crore profit is sustainable every quarter?

INR 1,000 crore profit, that's a very tricky question, sir. You all are aware and we are also aware that there was a big resolution account this time around. So retaining that profit level will be challenging. But definitely, we'll be in high 3-figure numbers, primarily because of the fact that slippages are well under control and our recoveries have improved quite substantially. And we can't say at this point in time because INR 30,000 crore locked up in NCLT. And if some resolution comes quick, regulation comes, we may. But again, we were added like most of the banks, with a big resolution account in Q2. But again, I assure that it will be a high 3-figure mark.

Sir, approximately around INR 800 crores to INR 900 crores.

Yes. Yes.

And sir, what can you guide for quarterly operating profit, sir?

See, we have hovering around INR 2,500 crores to INR 2,600 per quarter. Our objective is to take it to beyond INR 3,000 crores. So for Q3, we are taking it INR 2,800 plus crore; and Q4, we are aiming at INR 3,000 plus crore.

Okay. And approximate provisions for the whole year?

Most of the provisions, I think we have done upfront. I think we have got more than INR 1,000 crore provision buffer already with us. So this time, you saw, despite doing a lot of provision also because of the write-back and all we got adjusted. I think provisions will be also within manageable levels. It will not be much because aging provision we have done upfront, and there are no big corporate account concerns. Whatever provisioning requirement will be there, will be in the smaller ticket size, where the stress are comparatively more. So providing side also, I think, our credit cost will be between -- maybe at the most 1%. This 0.34%, whatever credit cost is there, is because of big account resolution. Otherwise, it's around 1.3%.

1.3%. Okay.

Our next question is from the line of [ Harsh Shah ] From Reliance General Insurance.

Sir, my questions are regarding, the first thing is that, that DFHL recovery, that has been considered in the recovery, right? Not as a other income?

Yes. Subject to [indiscernible].

Yes. Sir, we are seeing a recovery bump up quarter-on-quarter. Sir, but upgradation has been substantially very lower. Sir, any reason for that?

Yes. Upgradation, sir, last quarter, if you're comparing that way, your operations are low. Last quarter, we had future. So all of the banks -- major banks were lent to future that others got upgraded. So the figure is quite high. But this time, INR 278 crores, as we have lined up a good number of assets for upgradation. Going forward, we feel that our upgradation should be in the range of around Q3. We'll have around INR 300 crore, INR 350 crore, and then the similar figure for Q4 also is expected, sir.

Sir, write-off would continue to remain at the current quarterly levels, around INR 3,500 crores or INR 3,000 crores kind of? And that would...

Write-off, prudential write-off. You're talking about prudential write-off, sir, Mr. Harsh?

Yes, sir. Yes, write-off in your presentation slide number, sir...

It will be round -- it will be around INR 2,000 crore. Presently, prudential written off is INR 3,583 crore. That number will be around INR 2,500 crore going forward.

And sir, I'm on your resolution framework for 1 and 2, the total comes to around INR 13,000 crores. And you have onetime restructuring close to INR 7,600 crores. Sir, are there any overlaps over there?

See, I would like to clarify on and our resolution framework one, our total outflow was around INR 8,000 crores earlier when we did it. But that has come down -- with customers on the bones of the economy, it has come down to a level of INR 5,807 crore simply. And in that, we feel that 80% of that is regular. And there is a small just there in SME category, which I think going forward, the market looking up, we don't find any problems in RFCRS 1. In RFCRS 2, the total, INR 8,311 crore, of which MSME amounts to INR 3,180 crore and retail happens to be INR 5,131 crore. Here too, our 72% of that is still a regular category. There's no stress on that. So we again feel that even in retail segment, sir, our mortgage loan, vehicle loan, personal loans, they are not causing metal strength. This is slightly on account of home loans where our major -- some of our customers have lost their jobs. They are partially employed. And that going in the next Q3 and Q4, the market picking up, we find that a number of [ forays ] coming out of that segment as well.

Okay. Sir, and onetime restructuring?

Onetime restructuring, that's onetime it is done. And the major account, you know very well, it is a sharp [indiscernible] and future retail are the major ones. So you we are seeing some light on that front as well. So...

Sir, any overlap in the MSME one? Because you have INR 2,169 crore in onetime restructuring. We have around INR 3,180 crore in restructuring framework 2.0.

No, there's no overlapping, sir. This MSME thing would be mostly below the INR 25 lakh category. 18% of that will be below the INR 25 lakh category. There's no big surprises in the higher INR 1 crore and above friend.

Okay. And sir, credit cost guidance, which you gave, which was 1% for the whole year, right? Is that correct?

Yes.

And slippage sir, slippage ratio guidance, what did you say, sir?

We are contemplating 0.3% -- 0.30%.

Okay. So for the whole year, you were saying 0.3%, right, sir?

No, no, not for a whole year.

Quarter.

For the quarter only.

Okay. Okay. So it's per quarter, 0.3% will be our slippage ratio. Is that correct understanding, sir?

Yes, yes. For the quarter [indiscernible]. Like last quarter, Q2, it was 0.34%, and we are planning to take it to 0.3% in Q3.

And credit cost also is for the quarter or for the whole year, sir, 1%?

It was annualized.

Annualized.

We take the next question from the line of Jayant K. from Credit Suisse.

I wanted to understand on margins and growth, sir. You have had around 2%, 2.5% growth this quarter, yet you're saying that full year you're only doing 6% to 7%. So first of all, what kind of growth is happening? And if this is happening in AAA and other government accounts, what kind of EBITDA are you getting there? And does this mean that our margins will likely, at least for this year, remain range bound at these current levels?

Yes. Margin, I told in the beginning also that one of the reasons why our margins were down last time was low credit growth. And this year -- this quarter, Y-o-Y, we got about 2.7%, notwithstanding a good 11% growth in RAM segment there. This year, why we are a little upbeat about margins is, we are expecting not for the full year, I told in the beginning that up to December, we will maintain the 6% to 7%. We will take a fresh call. Because as of now, we are not very sure about the third phase of COVID there. So that will upset all calculations. So we are doing it in a calibrated way. Now corporate loan book, that's a concern, primarily on account of demand -- lack of demand there. And still capacity inflation is about 60%. And we have got a lot of sanctions in hand. This year itself, we have done about INR 35,000 crores sanction till September. And the drawdown is not even INR 10,000 crores. So we are eagerly awaiting for the CapEx cycle to restart there. And we got quite a number of proposals also in hand there, amounting to about INR 12,000 crore, INR 13,000 crore. So going by this, when we have churned our deposit portfolio, where our CASA has grown by 13% and our bulk has come down by INR 16,000 crores, and that is how it translated into a deposit growth of less than 1% compare and contrast it with March where our deposits grew by 13%. So this was a conscious strategy. This was a bottom line centric strategy, not a top line. So we will not mind if there is a slight decline in top line in deposits, but advances, we will refocus and try to gain traction in corporate loan. So going by that, I think 2.60% to 2.75% could be margin that we are looking at there.

And so slightly medium-term view on margins, sir, and I'm not looking at a number. But given that the macro, there is competition, and we do have the cost of funds advantage. So does it mean that we will not shy from participating in corporate loans, even if they are coming at with low pricing?

No, we are not shying away. We are not shying away. We are quite upbeat about that, and we have been participating also. There have been some competitive rate competition amongst all the banks. And everybody wants to increase its share in the pie. Our credit share in the market, it has gone down to 3.34% from 3.36%. September end, we have recouped that, 3.36%. We wanted to take it to beyond 3.4% there. So that is by December. I'm sure with that, I think margins will be quite stable, and we'll be inching forward.

And sir, lastly, on capital. So if you are, say, moving towards a slightly higher growth trajectory, but given our cost structure, return on equities are still, let's say, in line with growth. So does it mean that we will need external infusions? I mean, are we thinking about that?

No, no, no. I think going by our loan book growth so far, and unless there is a big bang growth, capital will not be a concern. We are adequately capitalized. We will also not require capital from the government. That, we have made it very clear.

Our next question is from the line of Jai Mundhra from B&K Securities.

A couple of questions, sir. First is, I think Srei was not downgraded in this quarter, whereas other banks have downgraded this account in this quarter. What is the reason, sir? I mean what -- if you can throw some light?

This is a deduction of the court. So earlier, the court had stalled the proceedings of clarification. The court had come clear that we need to provide -- I mean, classify it, and we have done so this quarter.

Probably, Jai, you are looking at that number, INR 1,307 crore and saying so. But again, that's a net slippage number. We have -- so the Srei will feature in the gross slippage, but net slippage number is only showing INR 1,307 crore.

Yes. So sir, INR 1,307 crore number that you have written in the presentation also, of this, corporate is only INR 476 crore. So is this the number net of recovery that you have done in this quarter?

Yes, yes. It is net figure. The slippage figure of INR 1,307 crore is a net fresh slippages.

Okay. And what would be the gross figure, sir? Because earlier, I think we were reporting the gross number only? Or is there a change in the way reporting has been done?

No, no. We offer report only the net figure, sir. We have not reported any gross figures. The opening balance outstanding of NPA was INR 56,042 crores, and it has come down to INR 15,270 crores. Addition of fresh slippages to an extent of INR 1,307 crores. It's a net slippage.

Yes. So it is net of this quarter recovery or the accounts which slipped in this financial year?

Yes, Those accounts which have fallen have been recovered, upgraded or -- that's how...

During the quarter.

During this quarter.

Right. So sir, just for comparison purpose, can I have the gross slippages sir? I mean that will make quarter-to-quarter comparison relatively apple-to-apple.

I think this is -- what is that you see. Actually, it's a dynamic process, sir. 1/3 -- our daily flagging has started from 15/4. So it's a dynamic process. That doesn't -- we have classified, and we have got recovered. On a daily basis, it happens.

But I think that you are the only bank which is doing this. All other banks are reporting gross slippages, and then they are showing the recovery and upgrade even if they have been recovered in the same quarter in a separate line item, recovery upgrades. So just for comparison, if you have that.

No, no, no. We will check it out. And if it is required, we will definitely.

Definitely, we check it out.

Yes. Sure, sir. Okay. That is one. Second thing is, sir, on restructuring this thing, so you have given a very clear table restructuring 1, 2 and OTR. Is there an erstwhile restructuring also, right, which was, let us say, Air India and those things? Is that included? Or that is a separate thing?

No, no, no. This is not including big ones. It is -- whatever is shown as resolution framework 1, 2 and onetime [ this structure ], it's all -- maybe the Air India cost was not restructured, no?

Okay. But sir, is this the total restructuring that you have? Or there is some [ fourth ] erstwhile restructuring that was going on?

No, no, no. This is a figure of restructuring.

So this is the total number of -- total restructuring book for as of 2Q, right?

Exactly. It includes moratorium we initially started. You're aware that first time from February onwards to August, there was a moratorium. That also includes, and FITL also included. All that has been closed now. INR 62.95 crores is the only FITL left over, which is, again, because of Srei, which got clarified.

Understood. And what is the restructuring provisions outstanding that you are carrying, which is not in PCR?

10%...

Or the amount you say...

10% of all these.

Current quarter, it is INR 595.62 crore. And outstanding, it's around INR 1,492 crore -- INR 1,493 crore, which we have given in the note to accounts point #10.

Okay. Understood, sir. That is very helpful. And last question, sir, before I come back. So on your capital, sir, I mean, I'm not able to understand that you have the highest capital, CET1 at around 13% plus, and total CAR at 17%, which is, let us say, head and shoulder above the other PSU banks. And you are still saying that you will be reaching system average. And your net NPA is also the lowest, right, except SBI. And restructuring, it looks like in good shape. So what is the contradiction that you have the highest capital, lowest net NPA. But yet, your good growth appetite is the lowest or at next system level.

Jai, we should not -- I believe you will appreciate we should not lose sight of the ground reality. Everywhere, there is a hue and cry about credit not picking up. It doesn't take much time for me to tell a 15% figure also. That's why I've been reputedly telling that compared to 2.70% at September, we are aiming at 6% to 7%. And December, we will take a course correction. So it's not that we are shying away. We are aware that there is more risk appetite. We are capitalized at 17% plus. So for the moment only, we are saying this, 6% to 7% there. And ground reality, you have seen every bank that is the position, CCOD limit, 69% only availed. And a lot of sanctions for disbursals are not happening. There is a disintermediation through bonds and other routes also. I think as analysts, I think you should take this kind of investment also along with credit. That will give the real picture.

Right. So I was just looking at that: a, do you have any alternative use for the capital that you have? I mean do you intend to redeem some of the Tier 2 bonds? Or do you think of some other usage for this 13% CET1 or 17% CAR? Is there any alternate use also? I don't know.

No, sir. Our only focus is on growing the loan book.

INR 1,000 crores is falling due?

March. INR 1,000 crore falling due in March, which isn't provided for now.

HDFC, 20.5%.

Our next question is from the line of Sohail Halai from Antique Stockbroking.

Congrats on a good set of numbers. Sir, a couple of things. If I look at your SMA disclosures, one is above INR 5 crores and one is the entire book. And if I try to derive the SMA, which is only below INR 5 crores. So one thing that I can say is your SMA-0 is actually coming off quite significantly. But SMA-1 and 2 is kind of sticky. So is the incremental stress in these books has slowed down considerably, and it is more of the management of SMA-1 and 2 right now? If you could give any comments on that?

Yes. Good observation there. SMA-0, definitely is coming down. SMA-1 also is coming down. We can see the figures. It was INR 16,389 crore on 31/03/21, and that's come down to INR 8,447 crore during Q1, and now it has come down to -- further down to INR 8,132 crore. There's a good coming down of SMA-0 on 1. SMA-2, you're right. There is a slight aberration there, INR 14,983 crores is the SMA-2 numbers. But here also, you can see, it is -- it was INR 11,358 crore in March, but it shot up to INR 16,400 crore in Q1. And there also, it has come down to INR 14,984 crore. So the issue in SMA-2 is, we are now -- you are seeing the numbers coming down. There has been a -- the number is more skewed towards less than INR 25 lakh portfolio, where about INR 13,343 crore are there in that bucket. In SMA-2 alone, that amounts to INR 7,570 crores. So what we are now trying to do is we are tech-driven process is also on the cards. And the contract, we have expanded the reach to the customer. Now we are sending SMSs, BCs have been activated. The branches now have the list on them, the call centers have been activated. Links have been provided to them for knowing what is their views. So all these methodologies, robust metrology is put in place. The recoveries are coming, and we don't see. You would have seen, the slippage was around INR 20.81 crore SMA during December '20. It has come down substantially to INR 7.39 crore. So that gives us good leverage that the follow-up at the ground-level, field-level benefit is very aggressively acting upon recovery front is happening in the bank.

So sir, just carrying on to this. In fact, I was just about to say that despite the high SMA-2 numbers, the slippages this quarter were quite low. So one, in terms of if the borrower is able to somehow pay or you are able to recover and the economic environment continues to improve. By how long do you think that we'll see this number actually coming off from around INR 15,000 crores odd number to probably a much lower number?

The slippage ratio, as our MD and CEO put it, it is 2.3%, no. So that we have so you should internal derive that to derive that our recovery efficiency, even if the collection efficiency, overall, if you see, 94%, 95% was there in Q1, and that has improved to 96.27% during this quarter. So...

So is it fair. Sorry, sir. So is it fair to say that in the third and the fourth quarter, probably this INR 15,000 crores numbers will also come off?

It will go down. Definitely, it will go down. No doubt about it.

And sir, other thing, any overlap between SMA numbers and the restructured book?

Yes. Restructured book as -- SMA-2 as well. These numbers are definitely going to be overlapped. Restructured numbers, standard restructure is INR 21,275 crore, and there is going to be some overlap.

Okay. But you would not be able to quantify that number, sir?

We can give it. That's not an issue. Individually, we can give it. No issues.

Okay. Sure, sir. And sir, finally, last thing in terms of our PCR is at 79% that is on books. So if I actually have to arrive at the aging-related provision for the next few quarters, how much per quarter it would be in your assessment?

PCR is 87.81%. And presently, that is one good question you have asked. The aging of provisions we can't. It was earlier the requirement for Q2 was around INR 650 crores. We have brought it down to around INR 458 crores because we have focused more on those assets where aging is required. So going forward, also, this will be coming down to the extent of INR 500 crores each quarter.

Okay. And sir, finally -- sorry to prolong it long. In terms of -- just if you could give the provision on the restructured book. And sir, also mentioned that around INR 600 crores is a prudent provision. So if you could give the provision on the restructured book and entire excess provision over and above the PCR that we have?

Notes # 10 is there.

Accounts -- Note of Accounts, Point #10 gives a detailed elaborate description of that.

In this, we have current outstanding of INR 1,493 crore. Out of the current quarter, we have provided INR 596 crore over and above the regulatory requirements. Provisions as well as regulatory requirements For provisional?

We'll take our next question from the line of Rakesh Kumar from Systematix.

Can you hear me?

Yes, we can. Please.

Sir, like really good set of numbers with containment in the term deposit that we had planned and articulated, and we are still continuing with that. And that is certainly helping in the LDR and the margin apart from the support coming from lesser interest income reversal. Just 2 things I have observation. And the number one is that cash to deposit and borrowings number is close to around 18%. And apart from that, we still have investments to deposits and borrowings at around 27%. And we have total CED at around 13 point-odd percent.

Yes.

So are we keeping this cash actually number and investment number, which is very high on the from the threshold numbers required by RBI. So sir, what is the plan to use -- what is the plan to use this capital going ahead? And how soon we can have on the LDR maybe at 75% or something like that?

As earlier, we have said in corporate books, we have already sanctioned roughly around INR 35,000 crore. Out of that INR 10,000 crore has been utilized by the borrower and another INR 24 crore to INR 25,000 crore, not utilized by the borrower. As demand picks up, we are having ready sanctioned with us INR 25,000 crores, plus that the utilization is CC limit also is in the range of 60% to 65%. The moment we are expecting that in Q3 and Q4, the momentum will take place, and we will then in a position have the capital to fund these assets also comfortably.

Okay. And so the PCR is very comfortable now at around...

87%.

79% number, calculated number.

87%, 87%.

Yes. So that is including the, I think, written-off loans number also. So actually, it is a very comfortable number. So where we would like to take it further to from here?

It's quite adequate now. Probably we'll be able to maintain that and probably 1 or 2 points more.

Okay. Okay. That's a very good number, sir.

Our next question is from the line of [ Bhavesh Shah ] from Morgan Stanley.

Sir, we took around INR 50 crores of pension costs -- like high-end family pension payouts this quarter. So what would be the total amount that you have to take over the period of 5 years?

Sir, actually, we have so far not gone ahead with assessing the actuarial valuation. We made a management estimation of around INR 550 crores. And out of that, INR 50 crore we have provided in this half yearly basis. Remaining INR 50 crores also we will be providing the next half year. So INR 100 crores will be total will be considered in this current year. And going ahead, once the actual valuation takes place, then we'll take an appropriate call in the next quarter onwards. Because amortization of 5-year is -- RBI has already given that window. And because our BOI, Bank of India, pension regulation, that amendment is yet to be taken place. So pending amendment, we have taken a management estimation. Once that amendment takes place actually, then we'll take a call in taking the estimation from the actuaries and go ahead with the actual valuation as far as scripted.

Okay, sir. Understood, sir. And sir, sir, you mentioned from your restructured book, if I heard it correctly, around 80% is regular.

Yes.

Sir, what do you mean by regular? I mean regular standard and the other 20% is an SMA book? Or how is it?

There's no slippage. There is slippage in restructured asset. The restructured are the people who are in slight problems. But what is a good thing happening for the bank is even on the restricted asset, the borrowers -- once the revival has taken place, they have started paying back.

Okay. I understand this correctly, sir.

[indiscernible], can you clarify [indiscernible]?

See, total of the RFCRS 2 if you take INR 8,409 crores. The regular or other stuff, 72%. That means they are in the regular category. There is -- there are some people who have taken a shorter term of restructuring. And probably, they thought that the coring will pay off -- go off soon. So those assets in the restructured are slightly coming into NPA equity categories. And that's why we did the standard assets under the restructuring category is 72%.

Okay. Okay. Understood. And sir, from the total book, what would be the share of floating rate loans, I mean, repo-linked or MCLR-linked?

83%, 84% will be...

No, total book, he is asking.

Total domestic book or...

Fixed rate is only 10%, so 90% is floating.

10% is fixed only, 90% is floating.

So 90% is floating. So 90% would only include repo-linked MCLR and external benchmarks?

Repo and MCLR are both included.

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

Sir, my question now relates to some other activities of making a little more income. One is on that co-lending space, you have a co-lending arrangement with MAS, M-A-S, I think. And what is your experience on that? And how much -- what is our book size there? And are you looking for any such more opportunities of co-lending in the -- even in the gold business also, there is a lot of opportunity, gold loans. One is that. And secondly, on this recovery front, though, there is a very good recovery because of some other regions also this time, but you said that you have got a very in-house staff team for Sanjeevani and that Saksham II. And so what kind of results coming in? And what is our experience on that front, though the recovery department is doing extremely well? And something on this co-lending, and other income from the -- other than our normal lending business?

yes, Ashok Ji, I'm Pramod speaking, GM MSME. As you rightly said, we have tied up with MAS. And lending will start from in a week's time, whatever the documentation issues were there we have taken care, and lending will start from the next onward. Till now, our experience is good in working with MAS. As far as other sectors are concerned, gold loan and as far as the vehicle books, both get in a final discussion between 2 NBFCs.

As regards -- Ashok Ji, as regard recovery, as you rightly said, the team which we have called Saksham, involves the lower down staff in getting the leads for recovery. You pretty well know that the SMEs or the NPAs are more in the less than INR 25 lakh category, because in large numbers, the reach to the customer is well done by the Saksham. That is the [indiscernible] people. There are 3,911 leads, which have been generated amounting to INR 479 crores. So that is really very good result compromise proposal. And secondly, the BOI OTS and BOI totally last year, our total number of assets we resolved was around a range of 50,000. This year -- last year, we have already done 117,878 accounts and amount of INR 2,439 crores has come as resolution, of which around INR 1,262 crores, the compromise amount has been arranged. INR 453 crores has already been recovered. And INR 821 crores, which will be a milestone that we have set ourselves probably 3 months or 6 months down the net, the recoveries are coming. One good thing happening also is the e-auction platform. e-auction platform last year, the last half year, we have done -- last quarter, we have done over 50 sales. And this year -- this quarter, we have done about 76 properties sold. Here, the major opportunity of the bank is to not to harass the customers. We made these auction platforms so that the parties come for resolution. So you'll be happy to know that nearly 314 customers during this quarter, amounting to INR 185 crores recovery has been made during Q2.

That's excellent, sir. Sir, hello?

Yes.

Sir, you said, sir, that our major thrust will be now on the credit, using that money, and a huge amount of sanctions in many cases are pending for them to take the disbursement of the release of the facility. My question is, sir, is there any team, sir, which is addressing this sanction later? And finding out the regions, why these parties are not availing these facilities or getting it released either a term loan or a working capital or additional working capital? Is it not that many a time, my experience, personal experience is this, sir, that many times some of the conditions are put are very stringent conditions in this scenario? For the last 4, 5 years, whatever tensions are being made because of the past little wrong bad experience, many -- so is there any -- I mean, other than the reason for the party not taking it because they don't want it, is there any other reason? Are we going into that? Have we -- can we not from a sort of a team or a committee for that to look at that why they are not availing? Is it any conditions are coming in between them to avail this facility, sir?

I believe it is not so. I'm sure you would have seen the stance taken by the other banks. At least I can watch for all PSBs, including SBI. When we interact in various forums, this is the common thread running across all the banks, number one. Number two, overall demand sentiments are low. So that is why that could be one of the reasons. But Nonetheless, we have our credit teams. This is a specific board direction that whenever good, rated companies at least, let us forget about below entry or just about entry level. They are not availing. It could be because of 2 reasons. One is cash rich or they don't require any CapEx funding now. But our team is we are having regular VCs with many of the clients at branch level and also a head office level. So we are engaged with them. But all in and then, things are similar across all the PSBs. I can vouch for that.

Okay. The point well taken, sir. Sir, my last question in this round is about the digital initiative, sir, end-to-end banking and on that even many of the PSB, I mean, public sector banks, are a little taking as compared to the private sector bank. What is our initiative on that digital end-to-end banking? And what kind of budget allocations, which we -- are we putting a major thrust on it? Or we are keeping it just moderate? Or we have some strong push for this digital initiative, sir?

I will request our ED, Rajagopal to respond to this.

Mr. Ajmera, last time also when we were discussing, we said that we have in place an e-platform. So that is actually the opening by December, I think we'll be up and running with respect to our platform. The budget, of course, is already provided for additional INR 300 crore budgets for a period of 5 years, that will continue to be there, okay? So apart from that, there are many initiatives that are being taken. It will take another 12 to 18 months for us to put in place all that.

[Operator Instructions] We take the next question. That's a follow-up from Jayant K. from Credit Suisse.

Sir, 2 questions. One is, if I were to add the growth in the corporate investment book this quarter, what would that quarter-on-quarter growth would be, sir, bond book?

Bond book.

I didn't understand.

No, no, he says, in addition to credit, if we add corporate bond subscription, so how much that figure will...

The corporate book has remained standard at around INR 43,000 crores. There has not been much accretion, apart from INR 1,000 crores, which we have received from DHFL.

One thing that you can understand here. The AAA-rated, these below reverse repo expect us to put that money there.

No, no, no, sir. I understand the concern. That's only I was trying to see if there are any opportunities emerged over there.

So where is the opportunity? You tell me. If there is an opportunity, we'll put.

No, no, sir. And sir, secondly, on this corporate slippage number on Slide 36, so INR 476 crores is netted off with -- I mean there will be 1 Srei over there. But there would be other corporate recoveries that is offsetting that? I mean what -- can you explain that movement?

That's why we initially also said that we are normally giving the net slippages. And I have clarified that. It has been checked out, and we will see that your gross slippages to be given, and we will give it to you.

Sir, was there any lumpy, large recovery in corporate book?

Which one? Recovery in corporate book, that is the biggest account that we have told you, INR 1,700 crore.

Sir, that wouldn't be used in the [indiscernible]. That would be...

No, no, this CR netting means what? Netting means any slippage that is happening during the quarter, getting upgraded in the same quarter will be netted off.

Our next question is a follow-up from Jai Mundhra from B&K Securities.

Sir, first on, if you have the corporate -- net corporate -- net NPA in corporate book, sir, I mean just to -- so you have given the total GNPA. If you -- I mean just wanted to check how much of the corporate GNPA are still not provided? That is one data point.

There are almost...

One thing you should understand, Mundhra, 53% of my corporate book is 100% provided, okay? And the remaining NPA [indiscernible] are the, they are more than 90% of NPA.

90% NPA.

There is hardly any corporate book provision that is happening in the last 2 years. There are no slippages at all in corporate.

Right. Okay. So that number would be what, less than INR 2,000-odd crores, right? If I were to the net NPA in corporate book?

Less than INR 10,597 crore is the net NPA, of which corporate book is around INR 2,000 crore. You can take that as much. That is only INR 13,000 crore. That is what. How much is corporate in that?

That is okay, Forget about it. If you can, you give it.

[Foreign Language] Page 36 of the presentation.

36, presentation, Jai, the Page #36 slide, you see.

There is slippage only.

The NPAs he is asking. NPA is actually -- see, out of INR 50,000 crores of NPA, around INR 2,000 plus crore is what?

Net NPA.

Net NPA, only I'm talking. Net NPA, only I'm talking.

So it's about INR 2,000 crores.

INR 2,000 crores.

Yes.

Gross NPA is much more.

Right. Second thing is, sir, on restructuring, right, so when do these accounts come out of moratorium? Let's say, R2, the Phase 2 restructuring usually, is it safe to assume that for the next 6 months, they will not come out of moratorium or only a tiny proportion will come out of moratorium?

I informed you earlier, this is based on the cash flow. Individually, they will for restructuring. The mandate should come from the party, and they know the cash flows, how they are going to happen. So based on their cash flow is basis from around 3 months' time to 2 years, that's what the regulator has given time. So it is not figure that all of those will continue as it is. So we are saying that, as I told you earlier, the recovery in the restructured assets also happening, no? So for example, RFR is 1, INR 8,000 crores was our restructuring. But whereas it's come down to INR 5,870, that means that's borrowed on the recovery front has made some recovery when the good tenants are coming. So it is a dynamic process, and we don't see any much stress over there on that payment.

Understood, sir. And second thing, sir, on the notes to account, 10, I think that is -- that number is included in your PCR calculation already. What I was looking for is out of your INR 20,000 crore restructuring number, what is the provision that you were carrying? So I think these are the 2 different numbers. The notes to account 10 is actually...

I'll explain that. See Notes to accounts 10 is talking about the standard accounts. Standard accounts is not a part of PCR calculation. PCR calculation is solely based on the nonperforming asset provision on nonperforming assets.

Post restructuring.

10%. 10% of the restructuring has been [indiscernible].

Overall restructured book, there it is like this for us. You have that slide where the restructuring has been given as per the RBI guidelines or RCFRS 1, 2 and then OTR, has been given. There, the provisions are different depending upon what RPA has mandated. It ranges between 10% to 15% plus in many cases. Whereas in the case of standard restructured, our provision held is around 5%, which is a very, very small portfolio today, okay? Nonstandard restructured portfolio is almost well provided for almost 35%, 35%-plus is provided for them, okay? That's not the whole thing works out. So on an average, we hold around 20%, 25% in the entire restructure book, entire restructure book. Notes to account point of view, okay?

Okay. Understood, sir. And last thing, sir. If you can share the Slide 24, what is the -- you've given the percentage. I just wanted the absolute number in Slide 24. So that shows the BB and below book. So in absolute number, what is the number?

You have it, absolute number with you?

Jai, they will share it with you. We are not readily having it with us. We thought this will give a good glimpse. It is percentage of gross advances.

Absolute number if AAA, AA. [Foreign Language]

Jai, they will forward it to you via mail, the absolute number.

That was the last question. I would now like to hand the conference over to Sri A.K. Das for closing comments. Over to you, sir.

Yes. Thank you very much, analyst friends and investors. It has been a very interesting kind of deliberation. I think compared to, this is one of the longest. We had a lot of participation happen today. And we count on your suggestions. We count on your guidance. A lot of new things, some of you have suggested today. And we have also tried to improve every quarter. Like Jai used to ask about SMA overall numbers, this time we have also made a part of the presentation, not INR 5 crore and above alone. So we will continue to count on you. And thank you very much once again for joining us, and wish all of you and your family members Happy Diwali in advance. Thank you.

Thank you. [Audio Gap]