Canara Bank (CANBK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Canara Bank Q1 FY '21 Earnings Conference Call, hosted by Antique Stock Broking. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sohail Halai from Antique Stock Broking. Thank you, and over to you, sir.

Thank you, Inba. I welcome you all to Canara Bank's 1Q FY '21 Earnings Call. Today with us, we have Mr. Prabhakar, MD and CEO; along with Executive Directors, Mr. Rao, Mr. Krishnan, Mr. Mukherjee and Ms. Manimekhalai, and other senior members from the management team to give us insight about the performance of the bank and its future outlook. Without further delay, I would now hand over the call to Mr. Prabhakar for his opening remarks, post which we can open the floor for questions. Thank you, sir, for your time, and over to you.

Thank you very much. Very good morning, ladies and gentlemen. We are happy to interact with you. And to start with, let me bring to a notice the highlights of our Q1 FY '21 performance. This time, we have concentrated on low-cost to deposit. Since we want to reduce our cost of deposit, our concentration was on low-cost deposits, because of which our savings bank has grown by 14% Y-o-Y, and now it is at INR 2.5 trillion. And CASA has grown at 16%. Retail term deposits, it has grown at 13% Y-o-Y. Now it stands at INR 3.78 trillion. And term deposits, which have grown at 19.19%. This is regarding our CASA and low-cost deposits. And regarding credit growth, I can say that generally Q1, the credit growth will always be in the negative compared to March. However, this time, because of the strive to steps which we have taken, and also, of course, because of the moratorium amounts, which has helped abate. But basically because of the aggressive decision, which we have taken to concentrate on credit growth, this time there is, if not a significant growth, there is a decent growth in the credit. And domestic credit, it has grown by about 5%, and retail, it is almost flat because in the last 2, 2.5 months, I think there was not many queries about the retail advances. However, now we are observing a traction in that one. And coupled with this, liabilities and assets significant performance compared to other public sector banks. Now coming to the interest income, it has grown by 21% Y-o-Y and now it stood at INR 6,096 crores, which is, I think, one of the attractive figures. And then coming to our operating profit, as you all see, Y-o-Y, there is a growth of 31.82% and now it stands at INR 4,285 crores. Of course, net profit, you have seen, after making all the provisions and other things we got done. Comfortably, show a net profit of INR 406 crores. Now coming to the NPA performance. During this COVID time, what we did is, our officers who are working from home. We have given them task of contacting all our NPA borrowers and also where we have written-off the accounts. Because of that, I think the results are visible. On a global level, the net NPS, it has come down by 192 basis points Y-o-Y. Now it stands at 3.95%. Gross NPA, 144 basis points reduction per Y-o-Y, and now it stands at 8.84%. Last time when I interacted with you people I had said that we want to have a comfortable provision coverage ratio. Compared to last year, there is an increase of 1,020 basis points as far as closing coverage ratio is concerned. Now it stands at 78.95%. Regarding the earnings, I would like to share some interesting information with you. Interest income, in spite of reduction in MCLR or RLLR and transmission of the interest rate. Still, we could show Q-on-Q, a growth of interest income of about 2.44% and Y-o-Y, it is about 2%. In the noninterest income, Y-o-Y, there is a growth of 10.56%. Regarding the fee-based income. This time, in the last 3 months, we have concentrated a bit more on the fee-based income because credit growth is not there. So we could earn a fee-based income of INR 1,039 crores. If you see Q1 -- quarter-on-quarter growth, it is about 33.83% and Y-o-Y is about 8.07%. So total income, we could maintain at the level of the previous quarter or previous year with a marginal increase of about 3%. However, in the noninterest income there is a significant growth. As I said, fee-based income has grown by 33% quarter-on-quarter and year-on-year, it's about 8%. During the current quarter also, we could recover about INR 259 crores in written-off accounts. Then coming to expenditure. Here, we have concentrated a bit more, and we could reduce the interest expenses on quarter-on-quarter by 4.64% and Y-o-Y, about 6%. If you go to the operating expenses, again, quarter-on-quarter, there is a reduction of 21.78%, and however, year-on-year, there's a growth of 6%. This is basically -- if you see the staff cost, compared to last quarter, we could reduce 20%, but year-on-year, there is a growth of 12.48%. It is the market that the IBA has entered into an agreement with the Officers Association and the [ UFBU ] Association, that is a bipartite settlement where they said that they will be increasing the wages by 15%. Our bank has already made 14%, including pension benefits, gratuity benefit and other things. And during the current quarter, once the agreement takes place because the agreement has not taken place, we'll be making another 1%. So there will not be any further hit on our balance sheet because of which the staff cost increase 12% is visible, whereas we already made a provision of about 14%. Regarding the operating expenses, there is a reduction of 24% quarter-on-quarter. And compared to year-on-year, could reduce by 4%. So as far as the expenses and income is concerned, we are very conscious of that one, and we are concentrating on that one because of which the net interest income has gone up by 20% quarter-on-quarter basis and year-on basis 21%. Operating profit quarter-on-quarter, it has grown -- it has grown up by 77% and year-on-year, it is about 31.82%. A few other parameters, I would like to highlight regarding the cost of deposit. Last time, I said that we are shedding all the high cost deposits, and we did it. And now in spite of reducing the interest rate because of the good customer service and the brand value and also the market conditions, our deposit growth, as I said, it is very attractive. In savings bank as well as in term deposit growth. Coming to cost of deposits. Last year, it was 5.56%, we could reduce by 61 basis points to 4.95%. And whereas at the same time, because of good management of NPA and also recovering the interest income effectively and also passing it to the extent possible, our yield on advances has reduced by only 13 basis points, and we are maintaining a yield of advances of 8.09%, which is more than 8%, which is good in the industry, compared to 8.22% in the last year. NIM last year, it was 2.53%. And because of the effective management, there is an increase of 31 basis points, now it has come to 2.84%. And if you remember in the last quarter, when I had the meeting with you, I said that we will be maintaining the NIM about 2.8%. So going forward also, we'll be maintaining the NIM at about 2.8%. The recoveries, yes, everyone talks about it because of COVID, there will not be any recovery in the banks. But our team and our officers, they have utilized their time very effectively and they have ensured that the recovery is affected. And if you see our slide regarding the recovery, in the last quarter, we made cash recovery of about INR 1,440 crores, and upgradation was about INR 620 crores. Then addition, yes, we did about INR 1,422 crores addition. Even though we have the liberty of postponing the things. But since in some accounts, we have seen the weakness other than installments also, we thought that it is prudent to classify it as NPO itself and start the action. So that by March, you may get good results on these accounts. Out of this 100 -- INR 1,422 crores, about INR 900 crores relates to 3 accounts. 2 accounts are overseas account and 1 account is local account. And after this net NPS are standing at INR 24,355 crores -- and another thing, as I said, even in written-off accounts during this COVID time, we could recover about INR 259 crores. So the net NPA has gone down to 3.95% and gross is at 8.84%. Retail, you may be interested to know the NPS in retail. Our NPA is at 2.22% in retail. In agriculture, it is 6.91%. MSME, yes, it is 11%. And in corporate, also 11%. Again, if you build down the retail advances, as far as NPA is concerned, housing, we are maintaining the housing portfolio very well. The NPA is only 1.5%. Vehicle loans sales, yes it is 2.44%. Education loan, it is about 3.3% and then personal loans also 3.3%. So going forward, I think, under retail, even for September quarter, our NPS will be under control. And in the last 1.5 months or after the June 30 closing, again, we have concentrated more on low cost deposit, the recovery of advances and lending to good corporates and also retail advances. So with these opening remarks, I think I have covered most of the things. And you may be interested regarding the -- other than financials regarding the amalgamation. Amalgamation last time, as I said, we have a well thought out plan and also a well executable plan, and we have implemented it. In terms of IT, last month 13th, we have rolled out the latest version branch that is 11.8 and then subsequently, after testing the functions of the new software or the latest version of the software, another 4 branches we have added. And now almost we got confidence that now we can roll out on the larger scale in the coming months. As far as staff, HR issues are concerned, we have completed all the transfers and postings of FPL 8, 7, 6, 5, 4 and 1, 2 and 3 we are going to complete in that next week. The 2 -- minimum disturbance will be there. I'm not going to transfer more people because of the COVID situation, which may disrupt the working of the branches. So where genuine cases are there, where request transfers are there, and whereas further CDC guidance I have to transfer only those things I will be implementing. Last time, as I said, we have already completed the transfer -- promotion process and that everyone was given the benefit of the elevation from April 1, 2020, onwards. The third vertical is regarding the structural amalgamation. Head office, now, all the departments are realigned and they are in place, they are working now with full capacity. Circle offices who have amalgamated and are posting for transfers all those things we have completed, we have 24 circle offices. ROs also e-Syndicate and Canara Bank, we have a more amalgamated. Now we hope they know the number 276. Then branches since the software is in place, very soon will be in a position to complete it. Inspection offices, joined inspection offices, everything we have restructured and postings have also completed. And the treasury, the most important thing that we amalgamated on day 1. This is regarding the Indian operations. If you think about the foreign operations in London, we have 1 branch of Syndicate and 1 branch for Canara. Those 2 branches were successfully amalgamated on 1st of April itself, and it is working as a single unit. HR, we have taken care. IT, we have taken care. Amalgamation of the structures we have taken care. Now coming to the most important thing is our customer. We have ensured that there is no inconvenience to any of our customers and 14 common products, which we have promised and which are rolled out as in 1st April, have successfully been implemented and are working successfully in all my 10,000-plus branches. Customer complaints we are attending more vigorously and more promptly so that they get satisfaction, and they do not feel the vertical hang-out after the mergers. Regarding the credit of the borrower accounts, we are a bit more cautious. We are giving comfort to all the good borrowers who are with e-Syndicate or with Canara Bank so that they have full confidence on the amalgamated entity. So we have gone through the data. And after the amalgamation, as I said, there is a growth of 5% under the present conditions that itself shows that we have taken care of all the customers, and also we are going in the direction of increasing the credit. Last quarter, I said that my guidance will be about 6% to 8% in credit growth. So as I said, we have already reached 5% during the lockdown period. And during the current quarter, again, my guidance will be 6% to 8%. That is the minimum which we are targeting. And in the last 1 month, the performance, which we analyzed, yes, we are on the track. So with these few words, I hand over to you.

[Operator Instructions] Our first question is from the line of Sri Karthik from Investec.

I had a couple of questions. The first 1 was with regards to e-Syndicate's Q4 numbers. As you have reported in your presentation, there's a significant loss that you have taken. What sort of normalization have you assumed in that provisioning requirements and a decrease to the net worth and CET that has happened during the quarter?

During the course of amalgamation, we have followed the principal of a harmonization. In harmonization, what we did is, suppose there are 2 borrower accounts, 1 in Canara Bank and the same person is having a facility in Syndicate Bank, if some account is under substandard category in 1 bank and doubtful category in other bank, we have made it doubtful. And we have made the corresponding provisioning. And when we have gone for this harmonization exercise, we are very liberal in the sense that we want to make our balance sheet very strong. So we have provided wherever and whatever is required. So that is the reason why there is a loss in the Q4 of Syndicate Bank balance sheet. However, that has been made good in the current quarter.

Understood, sir. Sir, my second question is with regards to the moratorium disclosure you made. I guess in your press conference yesterday suggested your Corporate moratorium number is lower compared to all the other segments. Could you throw a little bit more color on which are corporates who have taken moratorium 2.0? Are these like really good AAA corporates? Or are these like very weak corporates who have taken moratorium?

See, this time, what we did is to be more transparent to the public, even we uploaded the moratorium details with sector-wise, and even account numbers and even amount-wise. So here, as far as corporate is concerned, if you see, about 6% in terms of numbers and 16 point plus percent in terms of amount corporates as willing to moratorium. Now we are interested to know the details of this one. Suppose on the corporates, if you talk about NBFCs, only about 6% of the people have availed moratorium. And regarding the AAA or AA, BB, it is not that -- it is a mixture of this one. And 16% of my corporate portfolio is a very small amount.

Got it, sir. And just a last clarification. You mentioned you've uploaded it on your website. It's available for all of us to see?

Yes, it is in our internet page. It is on our website. It is detailed in the presentation. Everything we have given. Not account name. It is the account number. Account name, we cannot give. Because...

Our next question is from the line of Mona Khetan from Dolat Capital.

Yes. So firstly, on the moratorium number, just to understand what is the approach to moratorium? When we say an account is moratorium, is it based on opt-in? Or how are we approaching it?

Yes. One minute madam.

Madam, our approach is obviously opt-out approach. So unless a particular borrower opts out, we are considering that borrower as a part of our moratorium process. So I think other nationalized banks have also doing this opt-out approach. So we have followed that. And we explained last time also when we interacted.

Right. So last time, if I'm correct, it was based on -- if an account has at least 1 EMI over the March to May period, it was considered to be not under moratorium. Will that approach be the same this time around as well? And will it be applicable from March to June, which is 4 months this time around?

No, no. As I said, unless a borrower opts out we are considering that borrower as a part of our moratorium. So naturally, here, the number of installments is not important. Here, the borrower who is opting out, we are just keeping him outside this purview.

Okay. And secondly, on the capital plan. So you have reported a CET-1 ratio of 8.15%. Does that include the Q1 profit as well?

Of course, ma'am.

Okay. And any thoughts on what are the plans around capital raising?

Ma'am, last time, I said that just we are going to the Board for raising about INR 8,000 crores. So subsequently, we have gone to the Board and we have taken permission from the Board for INR 8,000 crores, out of which INR 5,000 crores will be in terms of CET. About INR 3,000 crores will be in terms of CET-1 bond. And out of this INR 3,000 crores, we said that INR 1,500 crores in Q2 will be raising and another INR 1,500 crores will be collected in Q3 of FY '21. Just we are waiting for our June results to be declared, so that let the market go through our results. And understand the business, both as well as NPA recoveries and also the efforts put during the COVID time. That is the reason why just we are waiting and now any time will be coming to the market.

Sure. And any plans on stake sale in Can Fin Homes? Any clarity there?

As I said, we have about 8 subsidiaries, which are doing very good, and they're giving me the dividends. So in Q2, I don't have any plans of this investment in these subsidiaries. However, in Q3 and Q4, our strategy may change depending upon the Board directions at that point of time.

Got it. And lastly, on the recovery front, if you could just share with us, what are your expectations for the full year? Any large accounts that you are factoring in?

Yes, ma'am. Our guidance will be about INR 10,000 crores of recovery for the year as a whole. And out of which I think big accounts as of now, I think we are not considering any big account. We are calculating -- we are considering the other medium and small accounts for [ recommending ].

Our next question is from the line of Deepak Agarwal from Axis Mutual Fund.

I wanted to understand your view yesterday, RBI came out with the circular regarding current accounts. So how should we read it? Is it that it will go in favor of large banks and midsized banks will struggle in terms of a large part of that current account money going to the larger banks?

Just I will answer you in 2 parts. First, let me tell you about my bank. My bank, my balance sheet is about INR 15.6 trillion. So I consider my bank as a big bank, and a stronger bank. So for me, this particular circular, I think I will take it as it is a positive circular for me as far as I am concerned. Now the second point is, regarding the -- regarding the opening of current accounts. Since I think some 7, 8 years, RBI was still in that. Wherever a person is availing the credit facilities in some particular bank, the other banks should not open the current account because the banks are indirectly contributing for the diversion of funds or in discipline in the financial -- financial, what you call, matters. So some banks have implemented, some banks have strictly implemented and some banks they are implementing sometimes some here and there. Some violations were there. And [ I don't want to be ] using the word violations, but I can say that some deviations are there. But with this circular, it is clearly defining and implementing a financial discipline on borrowers and the banks also. So suppose the surplus is that 10% exposure in the consortium, if it is there, those banks will decide to have CC account through which the amount will be routed. Others can also have the account, but only credits will be there, and it will be transferred to the main account. Here, actually, there will be a clear-cut monitoring of the cash flows, which is good for the borrower and which is good for all the banks, which are in consortium. So I think I welcome this move. And as far as my bank is concerned, we'll be implementing it in a lateral spirit.

And sir, do you believe for -- obviously, you are a much larger bank, so you stand to benefit because you will be more than 10% of the system-level exposure of the large corporates.

Let me give some information. We are having exposure in consortium, less than 10% also. It's not that in all the consortiums, we have more than 10%. So even as the bigger bank, we'll be implementing this wherever we have less than 10%, we only will be collecting the proceeds and will be remitting to the bank, which is having more than 10%, as decided at the consortium meeting.

Sir, but say, in the smaller accounts, there, less than 10%, your ability to get business from those corporates in terms of, one, obviously, is a balance, and second is related to ForEx and treasury and all. Does that go down for you in those accounts where you are not a dominant lender?

See, business is dynamic. Today, I may be having 5%. Tomorrow, it will take a call to have 15%. So it is not that because today I have 5%, I will be losing the business. But my strategy going forward as a big bank, as a Canara Bank will be to have more than 10% of exposure in each and every account.

Our next question is from the line of Mahrukh Adajania from Elara Capital.

So my question was also related to current accounting. I did hear your comment on the previous question. But so basically, there's a lot of feedback coming across from various participants. I would like to know from someone as experienced as you, sir. Basically, was it the problem that the State Bank is giving a lot of cash in, but the private banks who are kind of taking away the cream of business, was that the issue? Or was it like a general sector-specific issue because what is coming through as feedback? Is that probably the State Banks we had big exposures to the borrowers in the form of cash credit for the private banks for taking away the cream of the business. And even in terms of NPLs, receivables and account was about to default. The private bank would actually appropriate the cash flows earlier than State Bank. So was that the issue? Or was it your general sector-specific issues without any segment buyers like private versus state?

Yes. Myself, M.V. Rao. As far as this subject is concerned, yes, our MD also told, it is more on the financial discipline. Either on the borrower side or on the banker side. It's not private versus public sector banks. In that way, let us not take that. But the fact remains that whatever the things you have explained that is there in the industry, it is not a good practice. And to put an end to this a lot -- many internal discussions were there at the IBA level. And also now time has come to implement such type of measures. It's very good for the industry as a whole.

Got it, sir. Sir, my other question is on onetime restructuring. I know it is too early, but what would be a broad policy around it as in that do you see a lot being restructured because in general, people are scared of the word restructuring, right? Because in the past, a lot of restructured loans have paid. So what is your view? And how would you view it for your own loan?

Okay. Let me respond. I'm D. Mukherjee, Executive Director. Now here, let me first tell you that the restructuring was never a dirty word. It was made dirty by the practice, right? So restructuring exists and will continue to exist. Case in point is the onetime restructuring for MSME. We have helped more than a lakh of borrowers in our bank who have benefited from this onetime restructuring. So while RBI has made a very welcome move with regard to this onetime restructuring for the bigger accounts as well. Now here, let me answer your question specifically. It is like this, that although it is too premature and too early because some parameters needs to be built in, which I think every committee is going to tell us. So leaving aside all those things also, if we look at it in that perspective, it is only those accounts because it is tendered and SMA-0. Others are not eligible for this. So you see the comparatively stronger accounts are only being approved for restructuring, and they require some help. They require some push. So this is a very welcome move from RBI, from our point of view.

Got it, sir. Got it. But sir, sir, would you be in favor of doing a lot of retail restructuring corporate? I understand that all the large corporate accounts would already be restructured, your corporate moratorium is not very high. But would you be more inclined to do a lot of retail restructuring? Or how do you view your current moratorium in terms of restructuring? Do you think a lot of them would be eligible for restructuring in the retail segment?

No, this is again, Prabhakar. Addition to the earlier question. On our notes on accounts, we have already given the figures of restructured accounts. It is about 1.45 lakhs, amount is about INR 4,400 crores. So our experience is that wherever we have extended this restructuring, now those accounts are performing better. Why I'm telling is, your question is that the restructuring, yes, as we said, there is a feeling in the market that restructuring means that we are postponing the NPS. But if we go through the RBI circular, wherein, they said that when you do MSME onetime restructuring, they have classified into less than INR 1 crore, INR 1 crores to less than INR 5 crores and INR 5 crores to INR 25 crores. And for each bucket, there are clear-cut directions that before you do the restructuring, what are things you are supposed to see, what type of certificates you are supposed to take and whether it will be done by an individual or a committee of the members who will be doing the restructuring, all those things. And after doing the restructuring, the parameters have to be monitored at regular intervals, all of this. So that the disciplined onetime restructuring has helped for us, the banks as well as the MSME borrowers to really come out of the short-term trouble, which they had. And if you see it -- if you go through the circular, people are not eligible for restructuring to be restructured. So there is [indiscernible] they are being excluded, and those accounts [indiscernible] becoming NPA. And whatever -- whichever account is restructured with these particular parameters, and these are being checked subsequently by the auditors also. So that is why wherever the banks are doing restructuring, they are very cautious and wherever liability and feasibility is available only there we are doing. Coming to the next question, what you have asked, ma'am, regarding the type of restructuring that we may do in the retail and other things. As you have seen, our moratorium portfolio is about 22% in terms of amount outflow. And if you take a cut-off date of [indiscernible] March 1, on that date, in real sense, there are not much or, I can say the number of borrowers -- I cannot say it's a large number, maybe the number is very reasonable when it comes to the eligibility of restructuring. And I think since about 78% of the people have paid back. In retail, about 30% of the people have paid back. If you see my retail restructuring, 30% in the moratorium and 70% has paid back. So I think if the circular comes, it will help my bank. Small portion if they are unable to pay, we will extend the facility to them, after complying to strict terms and conditions.

Got it, sir. And sir, just 1 last question then on the MSME portfolio, of the loans restructured, do you have any data on how much has slipped?

Ma'am, it has slipped. Yes, it is not that 100% restructured are in restricted only. But if you see this quarter, it was very insignificant. Only you will be doing in the next quarter, actual figures. And for us, we expect that it will not be significant. Because why I'm telling you is our whole amount is INR 10,380 crores. For that, we have already made a provision of INR 1,038 crores. Even if I presume and assume that, there will be a 25% to 30% slippages. Out of this INR 10,000 crores, I may be losing about INR 2,500 crores to INR 3,000 crores. For INR 3,000 crores, I have to make a provision of, say, 15%, [indiscernible] maybe 25%. It comes to hardly about, say, INR 450 crores to INR 500 crores or INR 550 crores, whereas I have a provision of INR 1,038 crores already. So as of now, I think the bank is in a better position to handle the Q2 NPA slippages. And as I said, already this quarter, I made about INR 1,420 crores as pressure slippages. So with the pain which I can take in the next quarter, I have already taken in the current.

Got it, sir. Sir, in MSME, I was just asking more about MSME, that what would be -- what of the restructured MSME loans in the past, how many would have slipped?

Exactly those figures, we have not taken. Ma'am, but I can tell you that I can share you the figure sufficiently, but it is not significant, as I know, of the figures. And the amount is, if you take -- I have the figures, just now I got it. From Jan 1, that is for 2 quarters, if you see, it is hardly INR 315 crores.

We'll take our next question from the line of Ravi Singh from HSBC.

Sir, my question is on this new resolution window which RBI announced yesterday. So for that, there is a provisioning requirement of 10% on the residual credit, residual debt. But whatever the sacrifice between existing debt and residual debt? Do you have clarity, I mean, how will that have provided, will has to be immediately provided? Or could that be spread over some time?

Actually, we are going through in details about the circular. It only came out yesterday. So all these things, there may be some queries also, which we will shoot to RBI. So we are awaiting all these things. So our department is working on it. So it will evolve, and it will -- the details will come around with regard to what 20% repayment and other things, that also is there, you get back 50% provisions. All those things, we are working out. It is too early. We are also waiting for that KV recommendations, what they give. So in totality, we are going to study it once again and place it to our Board for adoption. Then only we will come out with the correct picture.

Sir, given that the guiding guidelines are from the June last year notification from the RBI on the resolution framework. Under that framework, was any sacrifice on the debt needed to be provided immediately? Or were other options available?

So the June 7 circular is different. That is no way related to this particular circular, what they have given. This is only for those affected by COVID. Only these people can avail. But that 7 June was with regard to the INR 2,000 crores and above INR 1,500 crores and above, that is different. So there, the resolution was, if you go for NCLT, you did not provide. Or if it is only filed, you can recover 50%. If it is admitted, you have to -- you need not provide. If it is not filed, then you provide 20%, which will go up to 35%. So that is the different circular, totally different, independent circular. That is still in hold. That has not been scrapped by RBI.

Okay. Okay. And sir, just last question. Based upon your understanding of borrowers in MSME, corporate and retail who are getting impacted by COVID-related impact on their income levels, do you think there could be significant gap in the sustainable debt versus the debt, which they have right now? Or do you think the impact is temporary and with some rescheduling, NPV loss may not be very large?

Like I said, the situation is still evolving. It all depends on how the economy does. We are expecting -- even as on today, we are expecting with the measures which the government has taken with regard to nearly all the sectors. We expect a good growth in the economy in the coming quarters. Okay, maybe not next quarter, maybe not the quarter after next, but maybe within a reasonable period of time, we expect the economy to revive. And if the economy revives, all these accounts where we have restructured or where we are thinking of restructuring, they will revive automatically. So the question of unsustainability may or may not arise. It will be sector specific, it will be borrower specific.

Yes. But yes, I would like to add one point. As far as my bank is concerned, taking into condition all these risks. In the last 6 months, what we did is, we have made huge provisions. Now my provision stands at 78.95%, almost 80%. And if you go through my NCLT accounts, I made a provision of 88%. So looking into the future, if at all, if there is going to be any adverse effect, to take care of that in the last quarter and this quarter, we made huge provisions.

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

Sir, 2 questions basically. The first question is pertaining to the RBI FSR report in which they have given the rating distribution of 0 past due, SMA-0 loan accounts, credit rating, where we see that around 26% of loans are either in the subinvestment grade or unrated. So -- and after the restructuring, what is our view that in the, say, 2 years' time frame, post restructuring, how the asset quality would look like given this number in consideration?

You see in this FSR, which RBI has come out, there are 1 -- there is -- there are different scenarios. One is baseline, one is very stressed, severe stress. So these type of scenarios while it is good for statistical analysis, it may not differ with the reality because this is a changing environment. Nobody envisaged about this RBI guidelines, which came yesterday. So when the FSR study took place. So what I feel personally is -- this is Mukherjee from Canara Bank that, let us not generalize the things. It will pan out considering the measures which both RBI and government have taken or they are taking. I feel that the impact may not be that severe as, say, FSR points out. And if we take into account this restructuring because this restructuring will basically try to bring out the accounts out of SMA category. That is the basic purpose of this. So naturally, this 26% SMA may not be actually, which is going to happen in the next 2 years.

No, sir, these are SMA-0 in the sub-investment grade and unrated, 26% number?

No, you see the unrated does not mean that it is a bad account. Unrated can happen because of various reasons. So -- and if you kindly see the portfolio of MSME, MSME are mostly rated below BBB for various reasons. That is what we see the reality. But it doesn't mean that all the MSME accounts are bad, just because they have been rated below the investment so-called investment grid. So that is a view which bankers need to take as to -- okay, it may be BB, it may be BB minus. But the inherent strength of that particular borrower is analyzed when we also assess see the credit requirements to be given to these borrowers, and we will continue to do so.

Got it. Just a second question. So there is an additional refinance facility of around INR 65,000 crores what RBI has proposed through [ NABARD ] and the other financial institutions. My point here is that if you look at entire general commercial bank data for May and June, there has been a decline in the MSME total number of around INR 23,000 crores and INR 45,000 crores in May and June, respectively. So if the MSME loans are declining, then what is the point in giving the refinance facility to this refinance institution? So why would the bank avail at this point in time when the books are actually declining?

Yes, let me answer this question. If you see my bank, under this emergency credit line, which is guaranteed by government of India, we have disbursed to more than 3.8 lakh borrowers amounting to about INR 6,800 crores. That's a disbursement, right? In is a span of, say, of about 4 months. So disbursements are taking place. And at the same time, as I said, people are also repaying. I don't say that in MSME, all are repaying, but people are repaying and they are utilizing the credit. So for us, we are not going for any refinance from what we call, but there are banks which may be requiring because my cost of funds or my deposit is only 4.95%. So my [indiscernible] bank is only 2.95%. I can raise money from [indiscernible] bank at less than 3%. So that option is available. People are availing it. And the outstanding -- going down outstanding doesn't mean that disbursements are not taking place. The actual figure you'll get it when you see the disbursement figure and disbursements are happening.

Our next question is from the line of Abhijeet Sakhare from Kotak Securities.

Couple of clarifications on the moratorium number to start with. This is as of June end, right? And fair to assume that these many loans have not repaid us anything during the tenure of the moratorium, has it?

No. As we have already clarified to you, only 22% of our borrowers have availed of this moratorium facility. And we've also told you that the way the measures that the government is taking and the various measures that the bank is also taking, we are sure the numbers would be reducing in the next quarter. A lot of measures have been taken by the government, and you know the RBI also has taken a lot of measures. So I'm sure those numbers, repayments will be coming in. And we have told you also that our retail numbers are around 30%. And we have also clarified to you. Most of my retail borrowers are all salaried class. Now they are also repaying maybe a little bit of issues in the market right now, but I'm sure the monies would be coming back. And we also told you our NPA numbers are just -- almost like below 3% and the growth in my retail books have also increased. Though MSME numbers, MD has also clarified to you that we were given out so much of loans and our loan books have also grown to about 5%. We have no issues regarding the repayment, actually.

Sorry, just to clarify this -- on this, ma'am. So INR 120,000 crores worth of book is not prepaying as of [indiscernible]?

Yes. Yes. The moratorium numbers is exactly. And my -- almost my -- if you look at the total numbers, it's like almost like 13 lakh numbers. And we are sure that these numbers would be coming down in the next quarter.

Got it. Second question is what would be the expected aging-related provisions for the rest of the year on the current stock of NBS?

Now aging as on March '21, it will be normal. It will be -- it is not that very extraordinary will be there. But it will be around. So I think it is manageable. We will not tell you the numbers exactly. But it is -- it is much better than last year. It will be manageable, within manageable limits. This is what we can say right now.

Okay. And the last clarification is trying to reconcile the net worth from the opening balance sheet to June end number. It looks like there is a difference of about INR 850-odd crores, if I compare the opening balance sheet and the June end numbers. So the opening balance sheet net worth was about INR 61,400 crores, and June end is about INR 52,700 crores. The difference is INR 850 crores more than the net profit for the quarter. Anything that we're missing here?

There is -- as you know, in every March, wherever fraud accounts are there, there are 100% -- this will be taken into account, 25% will be booked to provisions and remaining amount will be adjusted to net worth. So as the quarter passes, that amount will be brought back by making provision from this income. So we -- last time, as you can see from our notions about INR 800-plus crores of provision we made for the [ HSN ] account. So but in 3 quarters, it will be coming back. Same way during the current quarter and during the next quarter also, we'll be flowing back about INR 800-plus crores into equity.

Our next question is from the line of Bhavik Shah from B&K Securities.

Yes. This is Jai here. Sir, just a couple of questions. First to ma'am. Ma'am, on moratorium, so if we assume that this corporate moratorium loans of INR 38,000 crores, they have not had any EMI so far. Or does this include people who have 1 or 2 EMIs?

You see, as we have explained earlier, that we are following the opting out method. So here what our figures are, those people who have opted out, they are excluded from this. The others, we are assuming that they are in that fold of moratorium. So here... [Technical Difficulty]

[Operator Instructions]

Yes. So let us continue. While I was interrupted by this technical stand. Now what we were saying is, our formula is very simple. We have followed the opt-out method. Whosoever has opted out, we have left. Whoever has not opted out, we have considered them as moratorium accounts. Now here, let me also clarify that it is not that moratorium doesn't mean that they have stopped paying totally. Many of them are still paying. So that way, so we expect that they will continue to repay because as our Manimekhalai Madam was explaining, that most of our borrowers are salaried and they are employed. So that way, we don't foresee much of a problem in repayment of our retail loans.

Sure. Okay. That's helpful. Second thing is, sir, we have INR 110,000 crores of stand still loans where we have provided 10%. Now is this understanding correct that if in the next 14 days, if you can -- if we do not discover, then these accounts slip in 2Q, and these are not eligible for restructuring, right?

Yes, these are not eligible for restructuring. That is true. But then we cannot assume that all these will slip. How can we assume that our slippage ratio, more or less will be maintained.

Let me clarify, it is regarding the old accounts. As I said, about INR 10,380 crores is unfold and we made a provision of about [indiscernible]. Normal trend is, if it all ever scenarios there, there may be a slippage of about 25% to 30%. That we are ready for that. Even if 30% slips, sir, it will be about INR 3,000 crores. INR 3,000 crores for my bank, it is a normal acceptable level. And for INR 3,000 crores, even if I have to make a provision of about, say, 20%. 15% normally for substandard, even if I say in some accounts may be there, which are totally unsecured, there out to make 25%. Average, it comes to 20%. So it goes to INR 600 crores. I have a provision of INR 1,038 crores. So there is no issue as far as this quarter is concerned.

Sure, sir. And just last 2 questions, sir. In your implied fourth quarter loss for Syndicated Bank for the CET-1 reduction is around INR 5,700 crores, of which implies loss for Syndicated Bank is around INR 3,300 crores. What is the residual, let's say, INR 3,500 crores kind of an adjustment there if you broadly if you can...

I can mail you because these things are not yet ready. It is there, it is not issue.

Sure, sir. And last question, sir, there was a recent [indiscernible] suggesting that a large Indian conglomerate was -- is now declared as a fraud. One of the housing entities in that conglomerate has been classified as fraud. Now they have also have some of the accounts which are standard at system level, including power and power distribution. Does that spell some sort of a trouble because now this is a fraud case and the standard exposure that they have in terms of [indiscernible] and power distribution business? Does that come under this, in your opinion?

I think if you see the Canara Bank the way in which we declare the fraud, we are very prompt in declaring the fraud. Even the big account, which I'm telling housing [indiscernible], most of the banks have declared in Q1, whereas we declared it in Q4 of '20. So if any account is eligible, or is marked as reflect, we are going to declare it. And for -- just I would like to submit that. The exposure to these efforts is not significant compared to my balance sheet.

Our next question is from the line of Anirvan Sarkar from Principal Asset Management.

Just 1 question for my understanding. Just wanted to know if securitization transactions could be allowed to be restructured under this?

So restructuring under this thing, you'll see. For corporate, it is very clear. Only SMA-0 and standard assets. Now normally, securitization is -- there are 2 types of securitization. One is you sell your NPA assets to ARCs. The other one is you securitize the assets, say, pool buyout. That is also another type of securitization. So if it is a standard asset, even if it is bought under pool buyout, I feel personally that it can come under this, provided it focus the basic criteria. Although, as I said during my previous interaction, that some of the things are still not clear. We are also working on it. And all those questions will come in our mind, which we will try to discuss with RBI or IBA and we will try to get a comprehensive reply, and then we will put up to the Board for adoption. It is still pretty early on this.

Sure, sir. And also, just adding on to that, I mean based on your initial reading of it, I get it that loan pool buyouts will definitely -- should be allowed provided the additional criteria. But about PTCs, for example, if it's restricted only to banks. So let's say there are no mutual fund participants in a PTC, so there is no question of SEBI approval or anything. So if it's stated only to banks, should PTCs be -- should PTCs be eligible also that just understanding, not just...

I will just interject here. PTCs are treasury instruments. They are not credit instruments. So I have serious doubts whether they will be allowed in this scheme of things or not. I have serious doubts.

Our next question is from the line of Mahrukh Adajania from Elara Capital.

Sir, I just had 1 regulated clarification I required that in terms of, again, this current accounting, was there an RBI norm earlier that you cannot open a current account without NOC. Was there any such norms of other lenders or any such thing?

Some existing guidelines from RBI are instructions from RBI, suppose if a bank is opening the current account of any company as a borrower, they have to inquire whether they are enjoying any facilities from this or not, and we used to go through the, what you call, data available in the, I would call the public [indiscernible]. And RBI says that if someone is availing the credit facility without the consent of the bank, we cannot open a current account and collect the proceeds for that business. It is there, ma'am.

Okay. Okay. But it was not probably being strictly followed?

Yes. It is followed because you can see on some of the banks, so even RBI has imposed penalties.

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

Sir. I had a couple of questions. What are the plans for Can Fin Homes?

Yes. As I said, Q2 of FY '21, we want to be the stakeholders of that.

Okay. So in case of your wish list, will you do a rights issue? Or will you do a QIP? Because looking at assets under management and the market performance of Can Fin Homes, why won't you consider a rights issue favoring the shareholders at the attractive price, which shows off the capital and shareholders are not diluted?

We will take your suggestion. And let us have a discussion in our Board. Then only I'll be in a position to comment.

Okay. Going to equity raising for nongovernment shareholders in Canara Bank, why would we not consider that looking at the performance? Reward the shareholders' patience for losing value over a period of last 2, 3 years. But now time has come where we can raise equity and make it attractive, whereby at least that 24% of shareholders who are nongovernment holders. Government holding goes below 75% and it's at a price which is attractive and shows up our capital.

Correct. Correct. Excellent concession. Definitely, we'll work on that.

Okay. Now sir, looking at NCLT, what's your estimate for current year in terms of recovery?

See, in the last quarter, from NCLT, we will get only INR 61 crores. It is a very major amount. Out of the total recovery, what we've done is about INR 2,060 crores. But during the current quarter, already, I think, only 1.5 months left over, I don't see any big recoveries from NCLT, unless until some drastic additions takes place. Because of that, we have concentrated on recoveries other than NCLT, especially through [indiscernible]. So NCLT, I think during the current quarter, I'm not expecting much from that, except maybe INR 100 crores to INR 200 crores or INR 300 crores, not more than INR 300 crores, not more than that.

Sir, where do you see our NIM going forward?

As I said, as on date, it is 2.84, we are planning to keep it around 2.8.

The same as what you appeared on television and said. Okay.

Yes, yes. That is a fact.

Okay. Now sir, where CASA is concerned, what would be a wish list? And where do you stand today?

Yes. See, last time, I think we might -- at the time, our bank CASA was 30%. I said that going forward, by June, we'll be making 33% then by December 35%, that is our size of INR 2.5 trillion, increasing 2% or 3%. It makes a big difference. But if you see the last quarter performance, we have increased due to 33.84% from about 31%. So that itself shows that how seriously we are interested in increasing our CASA deposits. And my wish list or my guidance going forward by December, we'll be touching 35%.

Okay. Where do you see your gross NPA, net NPA by the year-end? And what is the growth estimate as per you in corporate book and retail book?

See, overall growth, as far as credit is concerned, it will be around 6% to 8%. And retail, yes, as we said, we have to cross 20%. That is our -- and we are hopeful by March '21, our retail will be growing by 20% plus. Now coming to NPAs, net NPA, now we are at 3.95%, and we see that we'll be in a position to maintain the net NPAs up 4% and a gross NPA around 8%.

Sir. Second thing is, where do you see -- as I can understand from your retail credit, your loan growth Syndicate Bank has not performed well in retail, whereas Canara has a reasonable share, is that assumption, right, looking at the CASA numbers and your case numbers?

Now after amalgamation because everyone is working in there...

No, I understand that. So how are we benefiting or utilizing the strength of Syndicate Bank CASA, which is higher than ours, on cross selling, housing, vehicle and education and personal loans are specifically as specified.

So here, I can say 1 thing to take the advantage of this strength in the e-Syndicate bank and also the strengths are available with us. What we did is, so we have started separating verticals in our bank. The main purpose is to have a focused attention, and we deploy sufficient manpower in these verticals. Say, for example, housing, it consists about 56% of my retail. So what we did is we have opened retail asset hubs, about 300 number headed by scale [indiscernible], provided the sufficient staff and most of the branches are attached to it. That's why I'm telling that we are in a position to grow in retail more than 20% because of the strength, which we are already having and which we are now leveraging those trends. And if you see our gold vertical also for a bank of our size, it is about INR 58,000 crores where there is 0 risk, and there is a good growth in that one. And in the south, I think now we are 1 of the most important player. And if you see after March, our Y-o-Y growth even in gold loans, we have grown 10%.

What is the loan book on gold, sir? Sorry, I missed out in the presentation?

INR 58,000 crores.

INR 59,100 crores.

INR 58,000 crores.

So this would be agriculture connected or stand-alone leasing? Is it more related to agriculture, right?

This is not totally agriculture connected, but agricultural farmers have also taken.

And what pricing are we giving these loans now?

We are giving it at 7.6%.

Okay. Secondly, yesterday, RBI had some change in rules where gold lending is concerned. On how much are we likely to do in LTV? And what is the estimated growth now going forward on this?

They have given us permission, we can grow LTV up to 90%. But there is a catch in that one. LTV is available up to March 31, 2021. So by that time, again, I have to bring down the LTV to 75%. So my strategy in lending will be in such a way that the people who are going to close the accounts before March 31, 2021, there, I will be giving an LTV of 90%. And for others, it will continue 75%.

Okay. Sir, second thing, smaller questions, more as your outlook on your trading book and outstanding on Jan-Dhan, what kind of losses are you estimating on Jan-Dhan?

Jan-Dhan. Jan-Dhan, we don't expect any loss, and we are not experiencing any loss. See, Jan-Dhan accounts, we have about 1.35 crore accounts, wherein we have about INR 5,500 crores of deposits in that. So it is a profit-making business for me.

And the gold disbursement, which we have done through the weaker section and the government scheme, what kind of book is outstanding? And what kind of loans are under NPA in that?

See, as I said, if you go to retail, my NPA is only 2.2%, and if you take book as a whole, domestic, it is 8.18%. And internationally, it is 8.4%. So it is very well under control.

Okay. And second thing, do you -- I asked you on the last quarter results also the digital initiative and the spend you had spelt out, are we ahead of the reality because as far as the rate of future digital is concerned? And how are we focusing on certain states where you have a larger market share as for my understanding and strength to grow our bank on a higher scale than where we are today?

2 things I would like to submit to you. One thing is, if you just go through my interaction in the last quarter, whatever I said, in all the parameters, we have performed better than what I have said, maybe in terms of operating profit, maybe in terms of profit, maybe in terms of growth in liability products or maybe in terms of credit products also. And even in terms of controlling NPAs also, whatever I have given the guidance, the performance was better than that. That's 1 thing. Regarding digital, now we have given a lot of emphasis not only in giving digital, but also for the ones which are existing in those cases also, we are concentrating. And I think going forward, maybe by December, you may see that Canara Bank is 1 of the best digitalized bank.

Sir, secondly, you hired a new CEO [indiscernible], who is an excellent person with the capital markets. Known name. What's the plan on Canara Robeco?

Yes. See, Canara Robeco, it is doing very well quarter-on-quarter. So it is a continuous process that the CEOs will be engaging. And after the tender, again, new CEOs will be engaging. But this subsidiary is doing really good for me.

Any highlights there?

Because this is not that forum, I may share afterwards.

Secondly, only on trading book, you didn't give me any guidance.

Trading book see yes, 1 minute.

[indiscernible] trading book is -- we are having very small, amount is very small here, around INR 100-plus crores.

No, I'm not talking about equity. I'm talking about the treasury business.

Treasure book only I'm telling, it's not for trading. So thing is very small amount.

What's your outlook for the year on the trading gains? That's what I meant. Looking at the current quarter, where do you see the year -- for the next 3 quarters? That is the current quarter the following 2 quarters.

Sir, what we can say, as of now, the yields are very attractive. And our treasury is well-managed treasury. So we are taking into consideration the future risk that may arise. Accordingly, we are investing and we are placing the funding. So going forward, I think we will not see any hit, rather, will be in a portion to make some gains from the treasury.

So would you consider equity first Tier 1 bonds [indiscernible]?

Sir, immediately, we are coming with -- since we are waiting for the Q1 results, now the Q1 results are out, we are -- very soon we are coming out with 81 bonds which are [indiscernible].

What size, sir?

INR 1,500 crores.

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

First of all, in fact, I wanted to congratulate Prabhakar [Foreign Language] and the entire team, Mr. Mukherjee, Rao and Manimekhalai madam for fantastic performance of the bank and completing the amalgamation also so fast and giving the full clarity about with the bank. Sir, after having said that a lot of questions have already been covered. Only a few, I would like to have some clarification. And after this INR 25 crore increased to INR 50 crore from INR 5 crores to INR 10 crores of this emergency loan, what is the differentiation figure, I mean, which you could have got covered more now? I mean, so the reason eligible amount of the borrowers like in 1 of the answers, you said that you have disbursed about INR 6,800 crore under this emergency loan for MSME.

And we are 1 of the highest. I can say I'm next to State Bank of India.

Yes, yes, yes. That what I observed. So did it make any major difference by increasing this limit?

We will be having about -- increasing the numbers, not much, about [ 270 ] actually. And with regard to the -- where the relates to individuals also, it will be around 15,000 numbers, sir.

Okay. So not much...

Not a very significant numbers increase.

And sir, now coming again to that question of yesterday's RBI's this restructuring plan, which is details are going to come, still. What they have said is that both accounts, which were less than 30 days overdue, it means SMA-0 as on March 1, 2020, they will be eligible. But by the time this process starts, and you know that August 31 deadline of moratorium gets over and the September comes. So even those who are eligible, it do not pay up to the, say, 1st of October, so will they still be considered for this restructuring? Or since it will be 60 days or 90 days of their nonpayment, they will not be considered by the time you complete the sanction process, restructuring process?

Here, whatever I could gather from that circular is number one, these accounts will have to continue as standard assets. That is number one. And during -- till the time, that the consortium or the banks decide on having that resolution plan. After that, they may slip, but when the plan is finalized and implemented, they will come back to their original status as a standard. That is what it is as of today. But they will have to be continuing as a standard asset. Still, it is decided by the consortium of the bank that, yes, this is the resolution plan, what we are going to adopt. They can slip thereafter, which will be -- they will again be brought back to the original status.

Okay. So it means that the deadline is up to 31st of December for restructuring and implementation up to 31st of March, 2021.

Yes. That is the maximum time line. 90 days implementation. Maximum time line is 31st of March, which will expire thereafter. And application and decision is actually 31st of December. So again, coming back to that only.

So if suppose somebody was already in default for 29 days up to March 1, and again, he does not pay up to the 1st of October. So that will not be considered as a standard under this scheme, even though the sanction procedure might get completed by 15th of November or November 30, these accounts will not be eligible. Isn't it?

Yes, yes, because they have to maintain their standard stature. That stature -- that is why if you recall my earlier response, I said this time, restructuring will not be a random restructuring. It will be a structured restructuring where only the strong players will only be restructured. So it will be a proper restructuring. Somebody asked me this question earlier.

And sir, sir, from the bank point of view, even if they would have slipped in NPA, you would have provided the first instance only 15%. So now also, you are, in any case, supposed to provide up to 10%.

So yes, that is to avoid cliff effect. That is to avoid cliff effect. So that suddenly you need not provide this 15%. So you'll gradually build up. That is what is the strategy always of RBI. And that is a good strategy.

All right, sir. Point taken well. Sir, now coming to some specific data points and some clarification. Your overseas advances have declined by [ 6,300 ], almost about at 20% or so. So was it a particular assumption on [indiscernible] or is it a strategic -- I mean, a view which has been taken to reduce the overseas advances? [indiscernible] INR 32,716 crores, it still down to INR 20,402 crores.

Yes. No. I mean based on the economy, the markets, you know that the world over, the pandemic is the so the demand is like that. It is not that on Q3, we wanted to reduce our reverse exposure. We are open with any good projects, we have been taking in the overseas sector also. Because of the pandemic situation provided across the world, then is a slow growth. That is the specific reason.

All right. Sir, some color on the NBFC, sir, Tier 1 and 2 how much have you utilized -- I mean, avail for your bank and distributed? And what is the overall -- can you give some color on your total NBFC exposures and Tier 1 and 2 numbers?

Ashok, right now, I don't have the number of Tier 1 and 2, but all that I can say is that we have the utilize the 1 and 2, I have now where I can tell you, it's about INR 1,200 crores totally. That has been fully utilized.

Approximate amount or I'm not asking a number of accounts, but the total amount?

Total amount about INR 400 crores.

Okay, got it. Especially in Tier 1, 2, where you've given to BBB plus or A minus NBFCs?

Negligible, negligible, not much. No, we are [indiscernible], that has been complete.

And madam, this is about this moratorium, do you have ready numbers of -- out of the 6 installments, I've been now so far, I think, for installment, amount wise that how much have paid 4, 3, 2, 1 or 0 to 1, do you have any such breakup of the...

Sir, we can come back to you with those numbers, sir. Right now, we are not having these numbers. We can mail those numbers to you.

Sure, sure. Okay. My e-mail address, I will send it to you [indiscernible]. And sir, around coming back, sir, to -- of course, the restructuring now has come, so that will reduce the pain as far as the NPA is concerned. But what are your views when you are interacting with your customers and saying that after the 31st of August? And especially, I'm talking about the interest on the working capital loans, our working capital facility, which was -- for which the moratorium was given. And suddenly, from September onwards, they have to not only service their monthly interest, but also this backlog, which they have to complete before March 31, 2021. So there will be double really on them. So how do you look at it? I mean whether some of these small businesses, MSME will be in a position to take this burden? Or do you think that this moratorium also may get extended by another 3 months or so?

I will answer your question in 2, 3 parts. #1 is as per our interaction with the borrowers we feel that this moratorium or this FITL, what will be created at [indiscernible]. It has actually given the benefit on 1 hand. At the same time, those people whose business are running, those people whose cash flows are coming, they are even paying back those interests as well as our installments, right? So it is not that the total amount is outstanding, and they will have to pay it, and they are waiting for 1st of September to arrive, and then they will start paying. It is not like that. Many of them have already started paying many of them are using their cash credit and working capital accounts in a proper way. So yes, that impact may be there, but at the same time, many of them have enjoyed because this was the lean period where business was not happening. The basic purpose of RBI to bring in these guidelines is to give them some break, give them some breather, which they have now got. And again, if the economy does not revise, everything will fall flat. So that is the basic question which we have to -- which we have to live with. If the economy does not revise, nothing is going to happen. But with some reasonable assumption of economic coming back to normalcy, over a period of, say, 6 months or 9 months, we can expect that these people who have enjoyed this moratorium as well as FITL, they are, in effect, benefited because immediate strain on them is not there, they will pay. And it is not that, that everybody will have to pay on 31st of March. They can pay as and when they can. So that flexibility is there. Now as regard to -- yes. As regards to the other part of the question, is I feel that even this present restructuring scheme, which has now come yesterday since yesterday, as on an opinion is that moratorium may not be a tenet. Monitor may not be extended, but then it's a debatable point because they have brought in this restructuring 1 -- why they will extend the moratorium. So if it is not going to happen that way.

No, sir, the restructuring is only for the purpose of loans. Now some of this like working capital pressure and other things, I don't think this will be also under the purview of restructuring because the interest amount of 6 months also will be huge, whether I will not allowed to be restructured at a onetime. And probably, the corporate may not avail that kind of small onetime city of restructuring.

During the COVID relief scheme of RBI, there was a good scheme for working capital lenders, also working capital borrowers also wherein we could extend their cycle, we could give them more drying power, all those things were there, margins could be reduced. So all those things, these borrowers have already enjoyed. And this restructuring, this restructuring for corporate it does not exclude working capital. It has not been specifically mentioned in the circular. Although it is too premature to assume anything, but they have not excluded working capital. So we can always have a holistic approach when we do the restructuring for corporates.

Mister Ajmera sorry to interrupt. May I request you to return to the queue, please. Due to time constraint we have to just move on. Ladies and gentlemen, that was the last question. I would now hand over the floor back to Mr. Sohail Halai for closing comments. Over to you, sir.

Thank you, sir. I really like to thank Mr. Prabhakar and the entire management team of Canara Bank for detailed explanation and giving us this opportunity to host the earnings call. Sir, any concluding remarks that you would like to add at the end?

Really, I'm very happy to interact with the analysts and the well-wishers for our bank. And we also offer interaction, we could get many insights. I think we'll be taking all those things in our future strategies. And again, after the next quarter results, again, we'll be meeting. And if required, I think we will have one more, what you call interactive call some other time. But really, thanks a lot to all the participants.

Thank you very much. Ladies and gentlemen, on behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.