Canara Bank (CANBK.NS) Q2 FY2026 Earnings Call Transcript & Summary

Good evening, everyone. Welcome to Canara Bank Q2 FY '26 Earnings Conference Call hosted by Antique Stockbroking. I would like to thank Canara Bank management team for giving us the opportunity to hold this call. From the management side, we have with us Shri Satyanarayana Raju, MD and CEO; Shri Bhavendra Kumar, Executive Director; Shri S.K Majumdar. With this, I hand over the call to MD sir for his opening remarks. Thank you, and over to you, sir.

Good evening, all the investor community. We are presenting before you the September quarter results, sir. Our global business has year-on-year growth as recorded at 13.55% and stood at INR 26,78,963 crores. Our global deposits also have grown at 13.4% year-on-year, stood at INR 15.27 lakh crores. Our global advances have grown at 13.74% year-on-year and stood at INR 11.51 crores. Our operating profit has increased year-on-year at 12.20% at INR 8,588 crores all-time high of operating profit. And the net profit also has increased at 18.93% year-on-year, stood at INR 4,774 crores. Our return on asset has increased 7 basis points from year-on-year and stood at 1.12%. Our PCR further improved year-on-year, it's 270 basis points and stood at 93.59%. Our credit cost has further come down at 0.68% with a year-on-year decrease of 29 basis points. Our gross NPA has come down to 2.35% year-on-year decline is 138 basis points. Our net NPA has also come down at 0.54% year-on-year decline of 45 basis points. This entire business, what we have grown at about 13% is led by our RAM credit at almost 17% and stood at INR 6.71 lakh crores. Among this RAM credit, retail credit has grown at 29.11%, stood at INR 2.51 lakh crores. And within the retail, the housing loan grown at 15.25% and stood at INR 1.14 lakh crores. And vehicle loan grown at 25.58% year-on-year and stood at INR 23,367 crores. First time during the last 5, 6 years, our MSME has grown more than 12%, almost 13% and year-on-year growth of 12.70% and stood at INR 1.54 lakh crores. Our earnings per share continues to be above 20. That's 21.01% with a 20.68% year-on-year growth. And our slippage ratio has further down almost 24 basis points year-on-year and stood at 0.76%. These are all the few of the highlights we have given. In the year starting, we have given some 13 parameters of our guidance for this financial year. Out of that 13, 11 parameters we already achieved. Under 2 parameters, CASA and NIM, we are working hard to see that it is also achieved. Of course, NIM, we are finding it a little difficulty. But CASA, there is a positive growth from June quarter to this. We are at now 30.69% as against the guidance of 32% for the March. And there is a CASA first time that there is a year-on-year growth more than 10%. These are all the few highlights of the presentation, sir. Now we are open for any of your questions or the queries so that we can answer you and satisfy you.

[Operator Instructions] The first question that we have is from Mr. Madhu.

Sir, I have a couple of questions. Firstly, on your margins, it's panned out exactly the way you had put it, right? Like last time you had said that I don't see more than 5 basis points, and that's exactly how it has turned out. So from now on, do we expect margins to stay stable or improve if there are no further cuts?

So one more quarter, it may continue to be stable, madam. There afterwards, you can say there is some improvement may happen.

Okay. And sir, what is your outlook on CASA now? I know that traditionally, your bank's CASA has been low, but the system environment for CASA, how do you view it? And how do you view your own CASA in that context?

See, when the total balance sheet is growing at 14% -- near to 14%, it is a big challenge for us to grow even CASA to match with that to maintain that percentage, madam. But however, whatever the initiatives we have taken by introducing the new products, new initiatives, introducing the customer relationship manager concept to feedback mechanism, so many initiatives we have taken business around app, several initiatives we have taken because of these several initiatives, first time, we are seeing almost about 10% growth in the CASA. And especially SV individuals in a year-on-year absolute numbers, we have increased -- there is an incremental growth of INR 20,000 crores. And our retail term deposits also in just half year, we have grown more than INR 30,000 crores, which is -- actually for the last several years, it's a record growth in the last maybe 7 to 8 years. So it is giving the results. But again, I'm telling you that we have given a guidance of 32%. We work hard to see that we achieve that our guidance, 32%. But definitely, when we are growing this guidance, we are giving 32%, keeping in mind that our business grows at 10.5%, but now we are growing at 14%. So we have to work hard to maintain that 32%.

Got it, sir. Sir, my other question is on the new ECL guidelines. So once they are implemented, what do you see as your run rate of credit cost? Will it be higher than what it is now? How does it work?

No. See, I don't think that it will have impact so much on that credit cost, madam. That much I can tell that we have internally something we have assessed. But already, we are working for the last 2 years. So wherever there is a scope is there, we are additionally providing even standard assets itself when the SMAs are there. So in the big -- all big accounts, we are providing in the standard assets provisioning itself. So that itself is nothing but that itself is actually the expected credit loss, whatever the ultimate, the meaning of that. Only the small, small accounts, anything is there. If you see that our SMA position at INR 5 crores and above, there is INR 7,500 crores. Out of this INR 5,000 crores already we have provided -- the left out is only INR 2,500 crores. So I don't think that will have so much impact on our either CRAR or on our credit cost because credit cost, if you see that quarter-on-quarter, there is a reduction for implementation, it is effective from 1st March 2027. That means still we have 15 months' time. This 15 months' time, credit cost may come down maybe around 5.50% or below 5.50%. So I don't think that, again, it may go beyond 1% and all. It will be well within less than 1% only.

Got it, sir, because there will be many accounts below INR 5 crores, right? And that's the problem. That is where you will have to make Stage 2 provisions because below INR 5 crore accounts usually have...

Let me tell you, madam, earlier, even entire below INR 5 crore and above INR 5 crore entire combined entity, we used to have around 5% of SMA. Now it has come down below 3%. Now it is only 3%, less than 3% is there, the total SMA position. And SMA [Foreign Language], there is no such issue -- only 1 and 2. 1 and 2 drastically has come down. And you should look at that our profits also. Our profits are growing very comfortably. And even current quarter, we have grown more than 18% year-on-year growth in the net profit. This year, we are expecting that our net profits may cross INR 20,000 crores. Last year, we were at INR 17,400 crores. So this additional profits, whatever we are earning, all these things will give us the comfort.

Got it, sir. Got it. And sir, I just have one last question in terms of growth. Your growth has been good. Going ahead, do you see it accelerating? I mean, are there any green shoots in October, which makes you more confident about growth, say, corporate growth or even SME growth?

And actually, MSME, we are expecting that definitely by the end of the year, we may end up at above 15% growth. As on date, it is 12.5% growth. Corporate, already we are growing at 10%. We want to grow around the 10% to 11% only. We don't want to compromise on our bottom lines. The green shoots, whatever is there, just 2 days back, our Board meeting, the credit sanction Committee has cleared INR 26,000 crores worth of loans only in one meeting. That gives you an idea that how the proposals are there in our bank. But again, let me say that our RAM sector will grow much faster than our corporate sector because our -- it's a strategy that we should reach our RAM sector to 60% and the corporate sector to 40 -- 60-40, that is the ratio we want to reach in the next 1 or 1.5 years time. So our trust will continue to be in the RAM sector to grow faster than the corporate credit.

The next question we have from Mr. Ashok Ajmera.

Wish you a very happy Diwali and Happy New Year. We celebrated the festival just a week back, and congratulations to you sir for another good quarter for a very good set of numbers, sir, especially your business growth, I mean, which includes credit and deposit growth. You are a little above than some of the other peer banks, which is very heartening to note, which you always have been. And mostly it is all organic credit -- organic growth which is also very nice. Sir, you addressed those 2 concerns which are my concerns also. One is that our CASA, which was 6 quarters back was 30.98% at present, still today is 30.69%. So something has to be worked on that a little more seriously so as to make our CASA a little higher than -- because it is a perennial problem in our bank as compared to some of the other banks where they have anything from 37% to 45% and some small banks even 50%. So one thing on CASA, our strategy. And second one, sir, if you observe this NIM is also going down from 2.9% 6 quarters back to now 2.5%. I understand that because of the rate cuts and this thing and the lag effect in the deposit and the corporate credit -- I mean, credit rates. But then still where are we heading? And how are we controlling fall in the -- continuous fall in the NIM. So these are the 2 things which I can seek your -- some comments on that.

Sir, definitely, I appreciate your concern in these things, and I'm sure that you will appreciate our efforts in the CASA, sir. Actually, just 2, 3 years back, the balance sheet used to grow at 5%, 4%, 6% per annum. In those days, maintaining the percentage of the CASA at the same level was a little easy task for the banking. But now because of the credit demand, the balance sheets are growing at 13%, 14% -- and current scenario [Foreign Language] 14% to garnering the -- maintaining the growth in the CASA also is a big task for any bank, not only the Canara Bank and any bank, sir. But still, since we don't want to lose that control on the CASA, whatever it is there, if you see that the first time year-on-year growth is more than 10% in the CASA, and I'm sure that our savings bank individually has started giving the results for us. These are all why we are getting the results is that we have introduced several segment-wise targeted products and those products become grant success in the market, and we got very good business out of those special products. And special initiatives also we have taken like a customer feedback mechanism, relationship manager concept, business around app, several initiatives we have taken, and these initiatives will continue to focus on that. Now we are working on some other untouched segments in the society like farmers. We want to come out with a new product to powering the farmers. Then, we also want to come out with the greek workers to target them also to bring it our fold. We don't want to lose any opportunity which gives us the CASA. So we are touching every opportunity. We are trying to exploring that possibility to get those things. And we are sure that -- I can share with you the absolute numbers because of these initiatives. In just 1 financial year in savings bank individuals, we got INR 20,000 crores incremental growth in the SB individuals, which is we've never seen in the last almost 8 to 9 years period in the Canara Bank. That means whatever the initiatives we have taken, it has started giving the results. And we are confident that we want to work furthermore and build the -- strengthen our field functionary hands to canvas more and more CASA deposits. We continue to do that, and we allowed recently the opening of current accounts through TAB, that also will help them to maintain the TAT immediately. We are also working some more digital initiatives also and especially in the society side and all. Recently also, we have introduced TruEdge 1 CASA product, both in SB and current account targeting for the NGO societies our Pilgrim centers so that we can garner that CASA. That also has attracted very excellent response we have received for that product. So we keep continuing our -- that's the strategy. We want to maintain that at least the guidance given this year is 32%. Our efforts will continue to meet that requirement, that target, whatever the guidance given to that. The second one is NIM, sir. As you are all aware that in the first quarter itself, when the RBI regulator has reduced the 100 basis points in the repo rate, our 45% to 46% of our loan book is linked with the repo rate. And this repo rate, 46% benefit is extended immediately, whereas our deposit rates will continue almost 90% of our deposits are 1-year deposits, whatever the deposits we accepted up to April 1 fortnight. Those are all the deposits will continue to attract the same earlier rate of interest. That's why there is a stress on the NIMs. When the higher rate of interest regime, we also got benefited. We have gone up to that even 3%. In some quarters, we are 3.05% also, we could show that NIMs. It's not that the bank is not able to take the benefit of -- whatever the market conditions are there. But presently, since market conditions are going downward tendency in the interest rates, already 100 basis points suddenly that regulator has come down for us, transforming that benefit to -- that burden to the depositors, it takes almost 9 to 12 months period. So till that time, some stress will be there on the NIMs, we expect that the same current level in absolute numbers, if you see that our interest NII and the interest amount as quarter-on-quarter, there is a INR 500 crores increase, if you see that. The last June quarter, our NII was INR 9,009 crores, whereas now it is INR 9,141 crores. That means there is a INR 130 crores increase as shown in the absolute numbers. That shows that now presently, whatever the deposit rates we have marginalized or we have rationalized has started giving some results. Next quarter also, we see the same -- maybe a little bit improvement or the same level will be there. There won't be any further dip in those areas. I don't think that there will be a further dip in the NIM below 2.5%, it will not be -- it will be maintained at 2.5% or 2.5% above. But fourth quarter onwards, definitely, again, we look forward for an uptick in this NIMs, sir. We will regain our NIMs back to that where we have shown that 2.9% or 3% if the market conditions continue and if there are no further rate cuts are there. If there is a further rate cut, again, that takes for us to transform into the deposit rate of interest, it takes minimum 9 to 12 months period. So to that extent, impact will be there on NIMs.

The next question that we have is from Anand Dama.

My first question is that what kind of one-off gains that we can expect from the stakes here in Canara Robeco and Canara Life? And PSL fees this quarter also are very strong. Should we expect that to continue in next quarters as well?

First, let me say that stake sale is there that we got the benefit earlier also unlocking the benefit what we have that ultimately, we are the first banker who could come to that listing in the current financial year, 2 subsidiaries simultaneously. And we got benefit of almost INR 2,000 crores. If you remove that IPO expenditure and all, we got benefit of INR 1,935 crores. This INR 1,935 crores, we have not booked so far anything in the previous quarter. The entire amount will be booked in this current quarter. And PSLC is our business tool. It is a strategy. Whenever we need, we can sell because always demands are there. And even now we have a surplus of almost INR 25,000 crores, which we can sell in the market. But depending on the demand and supply, we have the supply, but we will see that if it is selling in the December is required because already we have enough onetime benefit in the form of stake sale or it has to be sold in the March month. But we definitely take the benefit out of it than the PSLC sale because there is so much demand in the market and supplier is not there. We are the only big supplier in the Indian banking scenario for PSLC.

Sir, secondly, you're going to retire in December. Is there any chance that a private banker also could be a contender for the MDCO post? We hear that for SBI and others now that government has opened up. But is there a chance that even Canara Bank could be one where government could be looking for a private banker?

No, it's beyond my level to comment on those things because already notification has come and the notification terms and conditions are very open. Now the selection process is there, FSIB will take a call who is a suitable candidate. I don't think that there is any leadership deficiency with enough capabilities. Let's wait and see.

Do you have any views on the merger as well? I know that basically, the banks may or may not be involved. But do you see that happening in the next 12 to 15 months? Any broader level discussions which are happening in the government and whether Canara Bank also could be part of that?

See, at this moment, till that moment, no formal or informal discussions have happened with Canara Bank regarding any mergers or amalgamations from DFS.

Mr. Anand Dama, please come back in the queue for further questions. The next question we have is from Mona Khetan.

I have 2 questions. Firstly, we saw sharp growth in current balances this quarter [indiscernible].

I could not get madam. Some quality issue is there in your -- can you repeat that?

Yes. If you look at the current account balances, there was a sharp growth this quarter after a decline last quarter. So if you could just highlight what really happened here?

Current account is we have some institutional deposits. Quite often, we get the money, it goes out of that. And that benefit, you will get it -- even March also, if you see that there was a steep increase was there, if you see that. Even now current balance is less than March. So it's not that an unexpected thing, something has happened. So we have some institutional deposits. Sometimes it comes to the heavily on that. And that quarter, you get the benefit.

Got it. And secondly, on the margin, if I look at your 1-year MCLR, it has come down by roughly 35 bps in the last 6 months. So how much of the repricing impact here is factored on the yields currently?

See, we have actually 45% of our loan book is under MCLR. So this MCLR is resetting mostly happens on an annual basis only, majority of the accounts. So 6 months is over, then the remaining 6 months, that means 50% of this 45%, approximately 25% of the loan book may repriced, the remaining to be -- yet to be repriced.

The next question we have is from Chetan.

Congrats, sir. On a very good quarter. Sir, 2 questions . So last quarter, we had a one-off in the margin. Is there any one-off this quarter?

No, last quarter, one of the margin is PSLC only, except that nothing is there. PSLC in every year, first quarter, we are getting it. This year, second quarter also, we got -- because we have some excess priority sector and there is a demand, we got the benefit of INR 900 crores in that.

So we had some IT last quarter.

No, that is only INR 400 crores, INR 500 crores.

Okay. And sir, how much of the interest on written-off accounts is booked in the interest income line?

Approximately INR 450 crores.

Okay, sir. And sir, standard provision has gone up quite materially quarter-on-quarter. We had like 3% growth from them. Anything incrementally has done?

Yes, sir, actually almost INR 500 crores. Additionally, INR 550 crores other to whatever the additional provision you have, out of that one account, some drinking water project of Telangana, it is quite often appearing in the SMA-1 or SMA-2. So on a precautionary measure that we have provided that INR 380 crores towards that account. That is a standard provisioning only. It's only precautionary we have taken that. And we have actually started the business strategy to provide like that. Earlier also for one more such irrigation project was there. There we have provided INR 580 crores previous 2 quarters.

Okay. And sir, those accounts are still in SMA or how is it?

No, 1 is in SMA. 1 is out of SMA.

Okay, sir. And sir, of the agri book of INR 2.7 lakh crores, how much would be gold loan?

[INR 1 lakh 18,000 ] is direct agriculture, sir. The remaining is gold loan book.

Okay. And sir, the stakes amount that we will receive, will it flow through P&L or it will be through our AFS reserve?

No, sir, it will be on the P&L only. So whatever the INR 1,935 crores after adjusting the expenses, that will be taken into profit and loss.

The next question we have is from Ashlesh Sonje.

A few questions from my side. Firstly, sir, if you can quantify the interest on income tax refund, which you received in this quarter?

Sir, it is again around INR 400 crores, sir.

Okay. Got it. Sir, and secondly, if you can -- if I look at the recoveries from written-off account.

Sir, almost INR 1,600 crores.

What is your expectation for the full year?

Yes, sir, we expect that on an average, every time we are telling that in a year, written-off accounts through written-off accounts, we would like to -- we are confident that we can recover approximately INR 5,000 crores. So third quarter also, we are expecting like the same lines of INR 1,700 crores to INR 1,800 crores, and it will continue. And every year, the INR 5,000 crores, approximately, we can recover from the written-off accounts.

Okay. And this holds for FY '27 as well tentatively?

Yes, sir. Yes, sir.

Understood. Okay. Sir, and lastly, if you can give us a breakup of the slippages across segments?

INR 750 crores agriculture, sir, INR 350 crores retail, INR 900 crores MSME, total INR 2,000 crores.

The next question we have is from Apoorva.

I have a few questions. One, is there any particular reason why the yield on investments have moved up quarter-and-quarter?

Yield on investment is 2 basis points has increased, madam, from 6.88% to 6.90%.

Yes. But this quarter, most have seen a decline in yield on investment, any particular reason Canara Bank...

That is only a -- it's 2 basis points is not a big change, madam. Actually, that is only efficient way of investing where there is chances are there bright, they might be investing on that. So nongovernment securities also nowadays, we are permitting them to invest. They are little higher margins may be getting like NCDs of AAA rated NBFCs and all. So that might be the reason that all, it's 2 basis points here and there always it can happen.

Got it. Understood. And secondly, does the CET1 of 12.2% include profit for the quarter and first half?

Yes, madam, CETI, this particular 1 quarter itself, if you see that almost INR 55,000 crores growth is there in advances. That demands that CET1. Even then because we are earning good profits, we are able to maintain 12.2% above. So from 12.29% to 12.21%, it has come. The reason behind is only just because we have grown 14% in the advances in the particular quarter itself, we have grown INR 55,000 crores of advances.

Understood, sir. And lastly, what is the NIM adjusted for interest in IT refund?

IT refund is only INR 400 crores. I already told madam, yesterday, previous question.

The next question we have is from Sushil Choksey.

Congratulation to team Canara for excellent result. Sir, first question, you spoke about INR 5,000 crores, INR 7,000 crores of recovery from technical written-off assets. As of today, what kind of pool is available at historical value?

INR 71,000 crores, sir.

And this is all on historical value, not on current value.

No, sir. That's actually the current value [Foreign Language]. That's what actually we have provided 100%. The provision is a book value.

That I understood.

Sir, out of the INR 70,000, you can get even whatever it is there, yearly INR 5,000, you can observe from our system, sir. Because of our comfortable profits, we keep continuing the written-off also. The fresh accounts also, we are continuing to wherever 100% provisions are there for cleaning the balance sheet, we are again writing-off some accounts, technical write-off and that portfolio is able to maintain that level. So that INR 70,000 crores is available to us for recovering that's next few years.

Sir, second thing is RBI took a lot of measures for new initiatives for credit growth, whether it is M&A, stock market, equity lending, many other initiatives. Any thoughts how would you proceed on these products?

Yes, sir. I'm anticipating this decision only, actually, we launched last April that online loan against mutual funds, STP process. And it became very successful, and we are the second public sector bank that we are growing in that market comfortably in the current financial year. So now the limits have been increased, that will help us in growing this particular area, the STP process so that -- and simultaneously to take the benefit of the corporate market, what it is growing, we are also focusing on revamping our subsidiary that Canara Bank Securities Limited. And the revamping RFP has been floated for onboarding a new platform -- technology platform -- comprehensive platform. And we are also planning to inject some capital to that company. We want to strengthen it because we already listed 3 companies, 3 subsidiaries, -- Can Fin Homes, Canara Robeco, Canara HSBC. Now, we are focusing more on that fourth one. We want to strengthen their subsidiaries, so that future -- that value also we can unlock. And if we make it successful that subsidiary, it will indirectly or internally, it will be helpful for us, CASA also for garnering. Otherwise, all our customers who are dealing in the corporate market or capital market -- capital market, we are unable to serve them in those demat accounts and comprehensively that we want to tap that business.

Sir, any thoughts on M&A financing?

Which finance, sir?

Merger and Acquisition?

That's -- it is definitely, sir. We are working on that. We are creating a policy now on the same draft guidelines. We are also eagerly waiting for that opportunities because earlier this opportunity was not there. We also know that we lost some of the very AAA rated transactions also. But now we want to focus on that. Already, we are sending our officers and executives for improving their capabilities for training -- on the job training. We have deputed somebody for foreign also. And we are deputing our -- some local reputed institutes also. We are also eagerly waiting. We are building that capabilities in the bank, sir. I'm sure that within 1 quarter, policy and the building of capabilities may happen, then we will be very active in financing those acquisitions.

What would be our undisbursed credit lines and new sanction pipeline visibility?

It will be approximately INR 50,000 crores to INR 55,000 crores will be there, sir. Because just 2 days back only, we have sanctioned INR 26,000 crores. And earlier the sanctions, almost INR 30,000 crores is there. So more than INR 50,000 crores undisbursed loan will be there in the corporate sector alone.

How do you see the balance by the year-end on RAM versus corporate? 60-40 or it will be something...

59-41 by the end of this March, sir. The next year, we feel that it will be 60-40.

Okay. And sir, my last question, how is your digital spend looking like on budget, exceeding budget or you will increase the budget?

No. Actually, last 4 years, continuously, we have invested almost near to the INR 1,000 crores every year. So this year also, we have budgeted almost to INR 600 crores because many of the things we have onboarded already. Now, we are more working on return on investment. So how to take maximum benefit out of what we have invested. But at the same time, whatever the opportunities are there, we are keep on investing. With INR 70 crores, we are investing only exclusively on cybersecurity. So different platforms, we are already working on that, sir. So we will continue to invest on the digital. We don't compromise on that because we strongly believe that digital journey only has brought this glory to this bank last 3 years, 4 years, whatever we have spent, that has started giving the results. If you see that last 2 quarters, our market share, both in the deposit and advances are considerably is growing. Our deposit market share has increased 9 basis points and the advances market share is growing 6 basis points. That shows that Canara Bank is growing much better than the peer public sector banks and some of the private sector banks. That is because of the digital journeys only, sir.

Sir, on M&A financing, one of our peer banks from North said that large banks will work together under IBA or a consortium kind of arrangement. Any thoughts on it?

Yes, we are open for that, sir. It's not that. But actually so far in consortium, we acquired an efficiency or capabilities in underwriting the big projects on sole basis. And there afterwards, we are down selling them. Many of the infrastructure projects were done earlier also. Even [indiscernible] back also, we have done some big projects, almost total together. So our exposure itself is almost INR 12,000 crores, 2 projects we have underwritten that. So this underwriting process also will continue. Simultaneously, we will be part of that consortium, if any -- it depends on the viability of the project, sir. If there are any viable project, somebody has underwritten, we don't mind participating in that, either it's in a multiple banking or in the consortium basis. or even solely also, we don't mind because we have ample manpower or the efficiency in our bank. Canara Bank is nobody can corporate sector, I'm sure that Canara Bank cannot be neglected. And many people want to deal with the Canara Bank. They are very proactive to deal with the Canara Bank. So we want to encash that reputation or credibility what we are enjoying in the corporate community, sir.

Sir, I agree on that. My question was that is IBA working towards some kind of a platform where M&A financing is concerned.

So far, no such initiative has taken. But if they take initiative, we also will be part of that.

The next question we have is from Viksit Doshi.

Firstly, one clarification. You mentioned 3% of the book as overall book SMA. So that's SMA 0, 1 and 2 or only 1 and 2?

SMA 0, 1 and 2. All that together is less than 3%.

Okay. Okay. And my second question is, so you mentioned that we will be getting almost INR 1,900 crores kind of benefit from stake sale in Q2. So are you looking at...

It's not Q2, sir, it is in Q3.

Sorry, Q3. Yes, sorry, Q3. So are you thinking of utilizing that to create the buffer provision?

Always, sir, even when we don't have that onetime benefit, still you might have find that last consequently 3, 4 quarters, we are providing excess provisions towards the standard assets where ever towards to meeting that SMA-2 or SMA-1. So that strategy will continue because anyhow, from 1st March to 1st April 2027, we have to provide for that expected credit loss. So to the possible extent, we are creating that buffer now itself.

Yes. So we can use this to ramp up the...

It's not that the entire thing we will use it for that partly because still our PCR is around near to that 94%. Some of the banks are there at 97%, 98%. So there also scope is there to build our PCR percentage.

The next question we have is from Mr. Anand Dama.

Yes, I'm done with the questions, sir.

The next question we have is from Ramanuj.

So my first question is regarding the recent changes in gold loan bought by RBI. [indiscernible].

Some cross talking is happening. Sir, can you repeat again, the question.

Yes. Sir, my question is regarding the recent changes in regulations of gold loan bought by RBI. How do you see this impacting our business, sir? I mean will it become difficult to give loans or has the process become easier for us?

No. Actually, they are very proactive for doing the much better business in the gold loan, sir, because earlier the LTV ratio used to be up to the 75%. Now the RBI has increased it up to 85% that comfort they have given. Of course, at this moment, we are not using that. We are restraining ourselves to that below 75%, including the interest component. And the second one is for agriculture loan also, they have given the benefit that if it is -- it can be partially or fully collateralized, even then it will be considered as an agriculture loan. These 2 things have given a lot of benefit. And one more initiative they have given its for renewals may up to INR 5 lakhs that can be -- by paying the interest, they can renew that loans. These 3 has helped us in growing much faster than the earlier, sir.

Sir, can we see Canara Bank expanding its gold loan business, just the way other gold loan NBFCs group, will it be possible for us?

No, sir, I think India, we are the #1 banker that I don't think any bank or the NBFC is near to us in the gold loan. Our gold loan portfolio is as on date, it has crossed [INR 2,11,000] crores, sir.

Okay. Sir, do you see gold loan as more profitable than other products? Or is there any other product in our portfolio...

Actually, definitely, the gold loan does not require the capital. The second one is gold loan, average return is almost 8.75% to 8.8%. The gold loan, it will not be -- slippages will be meager -- almost less than 1.1%. So if you see that the product is definitely better returns, better safety, better security. But only thing handling the gold loan is the professionalism is required. Otherwise, that will have a lot of problems in the individual banks. Canara Bank is famous for the gold loans for decades together. That's why we have established practices -- good practices. That's why we are able to handle it. Otherwise, handling the gold loan is a tough job.

Sir, means, can you explain particularly what makes handling gold loans so difficult? Exactly is it procedural problem or there is some legal issue handling gold loans?

No, sir, when you have, you should have a proper systems and procedures in safe keeping, appraising, appraisal should be made available, reappraisals, cross verifications and safety, keeping safe keeping of these customers' gold. These are all -- actually there's so much infrastructure it is required. So we have created -- because it's an established bank, we created those infrastructure already as processes and procedures. SOPs are very clear. And there is a very stringent monitoring systems are there in the bank. That's why it is not challenging for us. Maybe it's a little difficult for the people who are first time they are starting it. But otherwise, many other institutes can compete with us, but nobody is nearer to us.

Ramanuj, please join back in the queue for further questions. We have a follow-up from Jai Mundhra.

Most of the questions have been answered. Sir, I just needed a few data points. One is you mentioned this total gold loan is INR 2.11 lakh crores. How much is retail and how much is agri, sir, if you have that bifurcation?

Sir, approximately INR 63,000 crores is retail.

Okay. And sir, last quarter, how much was this number?

Last quarter, it was INR 1 lakh -- I'm telling about June 30, sir. June 30, it was approximately INR 195 crores. Now, it is INR 211 crores.

And out of this INR 195 crores, the retail would be around how much, 55, 60 roughly?

55, 56, sir.

Okay, sure. And sir, do we have any policy to provide on SMA? Like this quarter, we have done INR 380 crores on this state government drinking water project. But do we have any written policy?

No, policies will be there proactively subject to availability of your comfortable margins in your hand. This is actually proactive policy adopted by the Board from time-to-time. It's not that the regulatory requirement that it is required. But still just when you are comfortable, it is better to provide more and more because anyhow regulator is expecting you to shift it to the expected credit loss system that is from 1st April 2027. So we are in advance, we are creating that buffer so that there will not be any much impact on the bank balance sheet, either on the capital CRAR or any other provision profit bottom line. That's why in advance when we are comfortable itself, we are providing those things. It's not that just because we have provided these accounts are going to be slipped to NPA. No, I'm sure we are very much confident that none of these accounts will slip to NPA. But still, we want to -- in a prudent banking, we want to create the buffers.

The next question is from Ashlesh.

Sorry, I was done with my questions.

The next question we have is from Abhinav. Sorry, the next question that we have is from Shaket Kapoor. As we have no further questions, now I hand over the call to you for your closing remarks.

Thank you. Thank you so much for all the investors, investor community.

Thank you, sir. With this, now we end the Canara Bank Q2 con call. Call participants are requested to leave the call.