Central Bank of India (CENTRALBK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Central Bank of India Q4 FY '21 Earnings Conference call hosted by Antique Stockbroking Ltd. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Prabal Gandhi from Antique Stockbroking Ltd. Thank you and over to you, sir.

Thank you. Good afternoon, everyone. I hope everyone is safe and doing well. On behalf of Antique Stockbroking, I welcome you all to Central Bank of India Fourth Q FY '21 Earnings Call. We have with us today senior management of Central Bank of India represented by Sri MV Rao, Managing Director and Chief Executive Officer; Sri Alok Srivastava; Executive Director; Sri Vivek Wahi, Executive Director; Sri Rajeev Puri, Executive Director; Sri Mukul N., Chief Financial Officer. At the outset, I would like to congratulate MV sir for taking charge as MD and CEO. And without taking any further time, I will hand over the call to MV sir for his opening remarks, post which we can open the floor for Q&A. Thank you and over to you, sir.

Yes. Thank you. Thank you very much. Good afternoon to all of you. Just I'm going to do the brief outline of the business performance, what we had during the year. So total business has grown by 4.30%. It was INR 4.86 lakh crores. Now it is at INR 5.06 lakh crores, with the composition of deposits of INR 3.29 lakh crores, that is a growth rate of 5.17. And total advances, INR 1.76 lakh crores, that is with a growth of 2.71%. And with a CD ratio of 53.61%. Coming to the deposit mix. We have cost of deposits of INR 161,926 crores. That is 49.24%. CASA is 49.24%, one of the best in the industry. Coming to the advances mix, we have a retail of INR 49,400 crores; agriculture, INR 36,200 crores; MSME, INR 32,300 crores. And the RAM total portfolio is INR 1.18 lakh crores. That -- the RAM portfolio has grown by 7.52%. And corporate degrown by 5.74%. Now it stands at INR 58,882. So our total advances figure of INR 1.76 lakh crores, if you see the total risk-weighted assets is 1.18. That is 66.71% is our RWA of INR 1.76 lakh crores. And coming to the mandated targets, bank has achieved all the mandated targets as per the government regarding the priority agriculture, small and marginal farmers and weaker sections. Coming to the COVID support. Bank has extended under ECLGS 1 164,100 accounts amounting to INR 3,041 crores. And in the ECLGS 2, 31.3 that -- what the figure I'm giving is 56 accounts, INR 303 crores. Regarding the rated standard advances, in our total book, our investment-grade and this AAA, AA and BBB and government guaranteed, it amounts to 78.20% of the investment credit. Coming to the retail segment, which is most happening. We have the housing loan portfolio of 27,969 with a annual growth of 8.44%; followed by the vehicle loan that is 12.22% growth, base is small of INR 3,100 crores; and followed by the education loans having the growth of 5%. Personal loan segment is at 4.9%. Regarding the asset quality and particularly to the standard restructured, now we have a total portfolio of standard restructured 3,478 at the end of March '21. Regarding the SMA, there is a considerable improvement if you see the March to March basis. In March '20, it was INR 35,000 crores. And March '21, now it is at INR 17,422 crores with SMA-0 of INR 5,129 crores, SMA-1 of INR 6,205 crores, SMA-2 of INR 6,088 crores. And regarding the NPA classification, dropped the NPA in the retail, it is at 2.47%; agriculture and allied, 7%; MSME, it is 6%; and corporate, it is 7%. And altogether, as a whole, we have 5.77% is the NPA position. And if you come to the classification, total retail NPA is 2.47%, of which housing loan is 2.27%, vehicle loan is 1.55% and other personal loans is 2.09%. Coming to the provision coverage ratio. We were at 77.29% in March '20. Now we are at 82.54% as on March '21. And regarding slippage ratio, we were at 6.02% in March '20, now we are at 4.40%. But in this, there were 3 accounts where OTR was invoked before March, but we were able to implement only in the month of April. That amounts to [ INR 1,440 crores ]. If we remove that, our slippage ratio will stand at 3.39%. Regarding the NIM, it is a flat 2.78% in the March '20. Now also, it is 2.78%. Regarding the asset quality trend, our gross NPA, which was 18.92% in March '20, now it has reduced to 15.55%. And similar way, net NPA 7.63%, now it has come down to 5.77%. And capital ratio, we have a CRAR of very, very strong at 14.81% with CET1 of 12.82%. And the leverage ratio, we are at 5%. Regarding the profitability, give the -- let me give the highlights. With the improved performance net loss, which was there at 1-1-2-1, INR 1,121 crores in the FY '20 is reduced to 8-8-8, INR 888 crores. And in the Q4, it was INR 1,599 crores, which was the net loss, now it is reduced to INR 1,349 crores. CRAR, what I told you that it is improved to 14.81%. Operating profit, it is increased to INR 4,630 crores, with 6.58% increase from the previous financial year of INR 4,344 crores. Q-to-Q basis, there is a 33% increase. INR 517 crores was in that Q4 of 2020. Now it is at INR 688 crores. Next is gross NPA. Now it is at 16.55%. Net NPA of 5.77%. Provision coverage ratio, 82.54%. Net interest income improved from INR 7,621 crores to INR 8,245 crores. There is the 8% increase on the FY '20 to FY '21. And however, NII declined from INR 1,926 crores of March '20 to INR 1,516 crores of March '21, Q4 '21. Cost-to-income ratio, there is an improvement from 61.44% to -- now it is reduced to 59.43%. These are all the financial highlights. Coming to the most important provisions. There is enough buffers we have created for the future uncertainty, what is unfolding with the COVID 2. I can confidently tell, whatever we have provided, it is more than sufficient for the uncertainties that may unfold in future. Coming to the investment portfolio. It is one of the quite performing portfolio we have with the yield on investment at 6.63%. And return on investment is 7.53%. And digital transactions, financial inclusion, all those things are moving in the right direction. And going forward, what the guidance we would like to give is advances will be growing around 8% to 9%. And our credit cost, we will be limiting between 2.4% to 2.5%. And the slippages will be around 2% to 2.10%. Net NPA, definitely, it will be below 4.5%. And the gross NPA, we are aiming at around the highest of the single digits. And the NIM will be around 2.75%. One more issue that I would like to share with you, you are aware that bank is under PCA. For PCA, there are 4 parameters from the RBI side. Out of 4 parameters, now bank has qualified under 3 parameters, except under ROA. And we are very confident that we will overcome in the near future. And also initiatives what we have taken to improve our CD ratio is -- would have already entered into co-lending agreements with the NBFCs. Because of the synergies that exist between the bank and NBFC, we are expecting a lot will be contributed from that line. These are all the few things, which I would like to submit. Now it is open for you. Thank you.

[Operator Instructions] The first question is from the line of Mahrukh Adajania from Elara.

Sir, my first question is on collection efficiency. Sir, what was your collection efficiency in March, and what is it is in April and May?

Ma'am, regarding collection efficiency book as a whole, we had 95.98% in the March. And in April, it was slightly in between 94.2%. But in May, we have a slight dip. It is around 90.2% in that range we have. A slight dip in the May.

Okay. Sir, the other question is that your CD ratio [indiscernible] compared to other banks as a percentage of access to your investment book is quite high. So how do you manage the risk on the portfolio? Just now, yields are fine, there's enough liquidity to that low issue. But it means [indiscernible] when you would have proportionate to your duration of your HTM and your [indiscernible].

Yes. Ma'am, actually, modified duration as of March '21 was 2.71, which was slightly a few basis point above as of March '20. The main reason was that we had less of T-Bills. T-Bills, as you know, that they are -- they attract least duration. So -- but going forward, at present, we are managing it very well by keeping a minimum amount in our AFS portfolio. And at present, our modified duration is around 1.79, which amongst PSU banks, though we are having a very huge SLR portfolio, but we are managing it well by keeping modified duration under check by investing more in FRBs and also by way of doing hedging. So going forward, we do not -- and we saw the bigger depreciation in the rising yield scenario.

The next question is from the line of [ Harsh ] from Reliance General Insurance.

Sir, for the quarter, Q-on-Q, we saw 2% Q-o-Q decline in loans. Sir, what is our guidance for FY '22? And which segments are expected to drive the demand?

Regarding credit growth, that's what I told that guidance what we are giving is around 9%, 8% to 9% growth will be there. And our credit book, we are balancing with the proportion of 70%-30%. 70%-30% means 70% will be our RAM module and 30% will be the corporate. Right at this moment, we are at 68% in retail and 32% at the corporate. So while driving our business is on the RAM side, another next 2% we have to get up to reach the 70%. And as far as the corporate is concerned, because of our strong CASA, we have a pricing power for the AAA and AA accounts. And going forward, we will be in a position to pick our assets, the range what we want with our pricing from us. So we will be balancing our credit book with the 70%-30% portfolio.

Okay. Sir, any guidance on the slippages and credit costs?

Credit cost, I told you 2.45% to 2.50%, in that range.

And slippages? Slippage ratio?

Slippages will be around 2% to 2.10%. In that way -- in that, it may be hovering in between.

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

Yes, welcome to you, Mr. Rao, Mr. Wahi and Mr. Puri. I think all the top management has been revamped, and I think it will definitely take the bank in the right direction because you have taken the past legacy of this bank, some of these things went wrong in the past with which the banks couldn't perform the way it should. But having said that, we are very optimistic for the future for this bank. Sir, having said that, like on the profitability front, I mean, the figures are very obvious that we have performed not so well in quarter 4 of '21. I mean the very -- I mean the operating profit was also under great pressure because of the interest rate competition. Though on the certain parameters like PCR and CD ratio, you are very comfortable. So having said that, sir, I would like to take, I mean, your views, basically that with the CD ratio, only 53.61% and the bank having such a good amount of CASA, good clientele, good national presence, why don't you -- I mean what is your planning to go a little aggressive in increasing your loan book, credit book rather than be putting money into the investments? What are your ideas? I mean, will you go...

Yes, great. Very pertinent question, and this issue we have identified in March itself. In between, we have taken a lot of improvements as far the structure and processes are concerned in the bank that is going to add more to the loan book in the sense to make it detailed one. Whatever the processing centers that were there that we have made it in such a way that approvals will also be given so that field people who are taking the credit additions will get the comfort for taking the speed addition and, at the same time, there will be an assurance from the bank that even account turns into NPA, that accountability past will be looked from this perspective because approvals are already given before disbursement. So this is how we are building up the field. And also now already earlier, we used to have only INR 3 crores to INR 3.5 crores per day disbursement. With this, already we have in the month of June, we have already reached INR 12 crores per day disbursement. Going forward, it is going to add a lot to the credit books. That is number one. Now number two is to move this CD ratio in the higher trajectory. We have already entered into the co-lending agreement. I think this is the first PSP, which has signed the agreement just 2 or 3 days before with the NBFCs on the home and the MSME front. So in this co-lending arrangement, you know that 80%-20% formula applies. 80% book will be bank and 20% will be the NBFC. And where collection recovery mechanism, which appears to be big link in the public sector banks, will get bridged from the -- with this association with NBFCs. And that's what I was explaining earlier regarding the pricing power. Since we have a lot of CASA, how we are moving into the market. And already 2, 3 big AAA rated companies have approached and they have given the green signal, and there will be a movement in the pickup in the credit. So these are all the things what we are doing. On the structure part, we have made it a robust one, and on the credit marketing side with the highly rated corporates that we are making.

Good, sir. The point well taken. I mean it's a very, very, very good move for this -- especially the co-lending. And sir, you can also go into the MSME space a little more aggressively, though, I mean, COVID is just still going on. But there also, there is a lot of potential. Anyway, having said that, this provision of INR 1,050 crores as per the note #16 for the COVID scenario, uncertain COVID scenario, have you made any base for this calculation? Have you already identified that kind of pressure? Is it going to really get converted into a requirement of the provisioning? Or it is just a cautionary provision?

It is more on the prudent side, number one.

Prudent, yes.

Yes. Number two, let me make it very clear, around 10% to 20% is really towards the stress what we have identified in the restructured portfolio. Not more than that. 80% will be towards the prudence.

And sir, my next question is, sir, on the investment portfolio. The debentures in the bonds of about INR 36,000 crores, other INR 3,677 crores. Can you give any color on this -- quality of this?

Yes, yes. Our Wahi will comment, yes.

See, Ashok-ji, actually, there has been an increase of around INR 8,000 crores in the bond portfolio. Primarily, it is INR 4,800 crores is Government of India that recap bonds. And other has been around INR 3,100 crores has been our TLTRO, LTRO bonds, which we had done in the financial year. So those are -- that is the main reason the bonds has increased. Otherwise, there has been only increase in the SLR portfolio that is mainly because of our traction in deposits.

What is there in the other category, sir, the INR 3,677 crores, INR 3,677 crores? Other investment portfolio?

Sir, investment portfolio primarily is SLR, and other is non-SLR. And in this other portfolio, we have -- it is all related to the restructured advances, which is given to the treasury. So that portfolio keeps changing. That is because of some reservation in the accounts. So that is the reason the figure has decreased.

Yes, that has come down from INR 6,389 crores to -- and in this, sir, shares of [ 3,040 ], it's a stagnant portfolio or trading portfolio in equity, sir, the [ 3,040 ]?

Trading portfolio is miniscule. Trading portfolio is miniscule. It is only around 20% of this book. Other is mainly the restructured advances fund.

Okay. In this also -- shares also in the restructured advances fund.

Yes.

Sir, this 8 accounts in the -- 8 borrowers account in the NCLT -- I mean in the [indiscernible], which could not be implemented, what is the outstanding amount of those 8 borrowers? Because you said that INR 406 crores is provided for the already implemented accounts. Which are the 8 borrowers, and what is the total outstanding of that, sir? Note #14?

What is that?

INR 2,753 crores.

INR 2,753 crores, outstanding.

Okay. So INR 406 crores is the provision made on that?

Yes.

Any color on this after the March ending, whether any progress has been done on these accounts?

There are basically 2, 3 accounts, which are like DHFL or Videocon that are going to be called soon. And major portion, we expect a good recovery out of this. Almost INR 1,100 crores recovery will be there.

All right. My last question, sir, in this round of questioning, sir, this provision of INR 519 crores for the divergence, which is found in the RBI audit, now this is -- this report has come in this quarter, the Q4 only?

Yes, yes. In Q4 only, that we have already intimated to the exchanges also in the last week of March.

Okay. Okay. I might have missed it. So this is a INR 519 crore provision, which has been provided because of the divergence in the past.

Correct.

The next question is from the line of [ Aakarsh Kotriwala ]. There is no response from the line of the current participant. We move on to the next question. The next question is from the line of Bhavik Shah from B&K Securities.

Sir, I apologies as it is repetitive. Sir, what is the exposure of accounts that you have earmarked to -- for NARCL -- for transfer to NARCL?

That is around INR 2,560 crores.

INR 2,560 crores. And sir, how many accounts would...

Yes, please.

Okay. Sir, which are these 4 accounts?

[indiscernible] because, see, unless and until our NARCL finalizes, we have submitted the details what they have thought first. And once they take the decision, they will be intimating the name of the accounts. There are around 7 accounts we have submitted, but let us see how that they will be finalizing. But our amount is around INR 2,500 crores. This is 7 accounts, not 4.

Okay. And sir, what is the rationale behind selecting accounts? Are these NCLT list 1, list 2, how is it? More towards an NCLT list 1?

So these are the normal accounts.

Normal accounts fully provided, no fraud. That is the criteria. That's all. Agreements in consortium, all banks have to agree. And INR 500 crores-and-above exposure. That's all.

Okay. Okay. And sir, one more thing. Sir, what is your recovery rate for demand resolution?

Around -- between 35% to 40%. Between 35% to 40%.

Sir, because, sir, as in [indiscernible] recovery rate seems pretty low. So where is the...

See, it is all the -- in the DHFL, there are lot many parties. Wherever cash part is there -- where -- I think more recovery is happening at that front.

Okay. Sir, what do you mean by cash part? I didn't get it.

It is depending on the portfolio. In the resolution plan, there is a cash component and the securities component. So we have treated as cash component as well as security component as the recovery to the bank. And fortunately, some banks would have considered only the cash component.

Okay. And sir, how would be the treatment of the NCD that Piramal will be issuing for the security component?

This is change...

In case of recovery?

There will be [indiscernible]. There will be a change in management. So it will be -- it will all be a standard NPI -- standard performing investment.

Okay. But sir, as in -- sir, how would it show in recovery, so as in the whole amount will be shown as recovery and upgraded or...

Yes, it will be upgraded. And whatever is the asset coming out of it will be marked against the provision. And the entire exposure, the debt as well as the NPI will be upgraded to performing assets.

The next question is from the line of [ Aakarsh Kotriwala ].

First question is that what are the current sanctions and disbursements so far that we have done under the ECLGS scheme? And what would be the guidance for retail loan growth and asset quality in the retail segment, sir?

In the ECL 1, the total is 164,000 accounts and amount sanctioned is INR 3,041 crores. And in ECLGS 2, it is -- the total number of account is 56 and the amount sanction is INR 303 crores.

And one more thing, just that when are we planning to move the new tax regime?

New tax regime, we guesstimate our tax person will say because at this moment, bank is not thinking on the client because of the carryover losses.

For the present, we are continuing with that rural rate only, sir. We are having that matched credit also entitlement is there. We are accepting our appeals with the [indiscernible] shortly. Even though there are some favorable court orders in favor of the bank, we are waiting for that. Anyway, there is new rate, it is not going to impact us even if you [ lost order ] because of some carryover losses under the income tax. So we are waiting and we'll be [indiscernible] that.

The next question is from the line of [ Bimal Shah ] from B&K Securities.

Yes. This is [ Jay Mundra ]. Sir, just one question -- I mean 2 questions. One is, what is the employee base that you have?

1 minute. 1 minute, the employee base...

Number of employees.

Total number of employees.

Total number of employees. And how many of them are on defined benefit and defined contribution. So maybe people who have joined post 2010 would be on defined contribution basis. So any rough split there? And in case the bank wants to be privatized, in case, what is the pension bill that the new -- I mean the new [indiscernible] bill, assuming all these employees retain and what will be the pension bill? Yes.

Yes, yes. The details, just our ED will be sharing with you. As far as the privatization part is concerned, that we will be silent on that, okay? Yes. The total staffing as on 31st of March is 32,335, of which 18,000 is under DCPS and 13,000 is under the pension option. So that is the breakup, which I think you're wanting.

Right. And sir, what is your annual pension cost, I mean, for the people who are on the pension?

It is around 1,200. That would be -- it's 1,200 annual.

Right. Right. And for the people who are under DCP, any fixed components that is there, sir, I mean, or...

No, we will not have any such bifurcation as a fixed or variable. It is whatever the industry settlement that is there, accordingly we are just offering.

Understood, sir. Yes. Okay, sir, yes. And sir, have you -- when was the time when you had done the last revaluation of your fixed assessment premises?

Revaluation, I think because of completed tenure this month, we have done it, partially we've done it.

March '21.

Okay. Okay. So that is already there.

The 3 years was being completed. Therefore, as per norm, we had to do it in this March.

Right. And what is the outstanding DPA in the balance sheet, sir?

What is the figure DPA?

INR 7,545 crores.

INR 7,545 crores.

The next question is from the line of [ Bimal Hinduja from Launch Stock ].

First of all, congratulations to the new MD and CEO for taking in charge of the bank.

Yes. Thank you.

Sir, could you give any rough time line for PCA exits? Like you've already said that bank has qualified in 3 out of 4 parameters. Any rough time line?

Sir, time line, anyhow this, we will be presenting it to the RBI. Already we made a representation saying that this PCA framework has come into existence in the year 2017. And there is a need and necessity to revisit these things because of this pandemic and also whatever the stipulated actions that were there as per RBI, there were 14 actions that they have prescribed for the bank to follow. So for the past 4 years, religiously, without any deviation, we are following that action plan as per the RBI. So given the circumstances, since we are already satisfying 3 parameters, we are requesting further favorable consideration. We have to wait and see how they are going to view this. And even otherwise also, I think if they take the quarter apart, we will be in a positive territory for the June.

Okay, sir. Sir, another question is that do you have any guidance on reducing the cost-to-income ratio? Currently, it's, I think, around 59.4%. Any comments on that?

Yes, yes. Regarding cost-to-income ratio, now we have totally focused on the income part, not on the cost part. Already, we are at the rock bottom, and there is nothing to reduce further. I'm not going to do any tweaking on that. Instead, we will be working more on the income side. And the way we are progressing and aim to reach the 60% CD ratio, we are very, very confident that this cost-to-income ratio, as a first step, for the month of June, we are eying for around 55%, 56% range.

Okay, sir, that's great. Lastly, sir, any comments on privatization of the bank?

There is nothing from our side.

The next question is from the line of [ Sushil ] from Indus Equity.

My question pertains to the change of guard and change of top management. [indiscernible] retail deposit franchisee seems to be one of the best in public sector banks. We are out-beating the top names. MCLR is at 7.1%. How are we shaping up on retail as the deposit base is very clearly visible from the call, which you have done in the last 3 years, that they are non-metro? That is not out of the top 3, 4 metros. So how are you capitalizing on the other cities, the small towns, where Central Bank is being rewarded as one of the best performing banks where deposits...

Yes. See, as far as the depositors part is concerned and more so CASA and then our major presence of rural and semi-urban to the extent of 62% of the branches, we are aware and also how this -- in this environment, how competitors are encroaching upon the rural and semi-urban segment, which hitherto to be a strong forte for the PSP. For that, we have a multi-pronged strategy we are adopting. Number one is we have the BCs to the extent of 7,100. Now we are ramping that up to 15,000 in numbers. So my customer touch points with the BCs and also enhancing features for the BC machine, that also we are making it available so that my client base is well served and also something extra in income streams they can add by the social security schemes if you are going to enroll them under APY, for each person, we will get INR 60. So that's a lot of amounts that can be approved. So in this way, we are making the BCs also -- their services also remunerative. At the same time, bank also protects its turf there and also enhance the customer reach. So this is how we are working on this deposit franchise.

Sir, but as a cross-selling, Central Bank of India can easily generate INR 1,000 crores of income. Most of the private sector bank would have done it. I understand, so far, you might have not. So what kind of digitization, consumer support or maybe human resource mobilization or support or educating our staff from various multiple points, what kind of initiatives are we likely to take...

So already we have initiated. Just I would like to say you, already, we have initiated for this associates partner business. And what we are doing here is totally on the digitization more. We want to onboard our customers on the digital channel. From there, we want to make these products available to them. So there are 2 things here. Number one is [indiscernible] of our associate partners are trained in such a way to onboard our people on the digital platform of Central Bank so that they can go for subscribing their products. Number two, with this, my manpower, which hitherto is being used will be a little bit less and our people may be focusing more on the core business. Number three, most important, is in any of these associated partners business, there won't be any issue of the misselling or any complaints once we onboard them on the digital channel. This is a strategy we are adopting, and we have already had meetings with our associate partners. They are also on the same page. Moving forward, it will be on the digital channel.

Sir, if you are assuming a great position where digitization and digital channels are, can you throw some light on what kind of numbers can be achieved on this? I'm not saying with revenue or profits. But if you are standing at 100, can we get to 1,000 in this year?

Just a minute. Sir, any business plan, what we have shared with the associate partners?

So basically, we are going in 2, 3 ways. So number one is like sir has told that we are going for the 15,000 BC, and they will be also touch points for our health insurance and medical insurance, life insurance and even general insurance also. As far as like we were not having the credit life insurance as a bank, so that we have started and that we are going in a rusty way as we are going for the ramp for 70%. That will be a good opportunity for us. And as far as other incomes are concerned, so there will be almost more than 100% growth in the commission base that we are getting from these channels.

So if I understand, your statement doesn't include mutual fund, which is the most generative [indiscernible] majority of the bank's incentive.

We have already tied up with the Motilal Oswal, and we are going for the 3-in-1 account. And they will also serve the mutual fund, shares and as well demat account and all other services will be provided.

Sir, I'm aware of Motilal Oswal, but pan-India mutual fund distribution capability, when you offer a bouquet, the income can be 5x more than what we can visualize as a single partner. That's what I mean.

Yes, correct.

Okay. Okay. We will consider it.

Yes. Because thing is that I, as an investor, may offer only Motilal, but I want 5 other schemes of other mutual funds. Why should your retail investor run to ICICI or HDFC Bank to buy the same product when you have the CASA in your pocket?

Your point is well taken, and we will offer the entire bouquet. It's not that they will -- our customers will be restricted because of 1 tie-up, yes.

Sir, happy to support on any enabling resolution of this part for Central Bank to earn in terms. Sir, we did reverse our Centrum selling thought process for any particular reason? Or what is the process? You might have seen how PNB is rewarded with a fantastic partner what this bought onboard. So what are our processes? I understand the companies are not comparable, but what's our thought process?

Just I would like to share that earlier to this in my earlier assignment, I was very closely associated with the Can Fin Homes.

Yes, I'm familiar with that. That's why I'm asking the question.

Yes. Because I was in Canara Bank, and we know [indiscernible] how to drive these subsidiaries, especially in home loan business. So now here, it is a great opportunity for us for the Centrum bank finance. And already, we made a plan. Now Board has also given us the permission to force a GM cadre or a person as the head of the home finance's division now. So going forward, we have plans to ramp up the operations in home subsidiary. And we know that a great, great value will be there in that, and we will be enhancing that now.

Sir, being a Bhopal-centric company, are you likely to move to some other metro? Or you consider...

Yes, that is also -- that is on the card. That is also on the card. We have not yet finalized this one, but it is on the card.

Okay. Sir, there is any specific digitization expenditures we have planned because we are talking about co-lending [indiscernible ] BC model, distribution model where retail will be able to access the product much superior than the current digital experience?

Sir, already, Central Bank has undertaken a major IT projects in terms of digitalizing the retail products. So already, it is 80% completed. And I think going forward, maybe by July or August, almost all the product stuff for retail, MSME will be on the technology platform.

So you mean all the products should be going live in July?

Yes, please?

All the products should be live and...

Yes, yes, yes, exactly. Exactly.

Okay. Now second thing, sir, we were discussing in the previous quarters, that is before possibly we took the bank of Indo-Zambia Bank [indiscernible] or something? Any thought process there? Or that's still...

Our Indo-Zambia Bank is giving good dividends to us. We don't need to -- we don't have any plans. It is giving good dividend in the profit earning...

Yes, yes. I can see that. So you will be retaining on that?

Yes.

Referring to earlier question asked by Mahrukh Adajania and then Ashok Ajmera of Ajcon on the CD ratio, which you indicated, and the investment. Can I get an indicated yield in where you think you're protected with the current investment? Why you said you may be 6.5%, 6.4%?

Yields are protected up to what level? 6.15%. Yes, 6.15% yields are protected to that level.

Sir, this is a humble suggestion for a small investor. So I -- don't take it -- you all have better experience. We are a bank doing retail or corporate credit, that doesn't matter. We are not a bank running at residue. As I used to hear from large FI investors. With the kind of retail franchise we have been able to create where deposits are concerned, can we see Central bank under the tenure of current management, all 4 of you all, that need our CD ratio improves with a lot of retail and related connected businesses?

Yes. See, that's what I told you. We are very much focused on balancing the book with 70%-30%, okay? So 70% is my retail and 30% will be corporate. And in the near term, we want to reach the CD ratio of 60%. And since we have enough capital at our disposal and we don't require to raise further capital in this year, the way we have planned and the way things are moving -- and for example, already, I told you earlier, per day disbursement was INR 2.5 crores to INR 3 crores. Now it is around INR 12 crores. So going forward, this credit book and CD ratio is going to improve.

Sir, do you estimate treasury profits in this year?

Sir, treasury profits, yes, profits will be there. But at the same time, we have to be careful as yields are already almost at the top -- bottom level only. But the guidance by Reserve Bank in the latest policy, we still hope that GSAP 2 has been announced. So we are quite hopeful that there will be a decent 15% profit in the treasury.

So you're hopeful in the current environment with COVID, the current financial year...

Yes, yes, that by year will continue. So there will be definitely 10% to 15% increase in the profit percentage.

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

Most of my points are covered by my colleague. But yes, again, sir, talking to some of the points which are still leftover. Just sir, NARCL, INR 2,560 crore, which you estimated out of this first tranche of about INR 85,000 crores, I believe this all must be in consortium only because they are all big accounts.

Yes, yes.

All are in consortium.

So the calculation wise the same calculation, about 25% to 30% of the value you will get. And on that 15%, so about INR 100 crores will come straight away to the bottom line of the bank from this because they are all 100% return of accounts, sir?

Yes, yes.

I mean, provided, not written up, but provided accounts.

100% provided.

And sir, this is only the first tranche, which will be -- which will get over in a month or 2. But on the overall, on the whole year, originally, when we had also -- I had also organized a seminar on the bank with the people from State Bank and also RCL and this. And there was a discussion that the overall amount can be immediately around INR 2 lakh crores, which I think may be completed in this year itself, financial year '22 -- '21-'22. So how many more such accounts you have, which may fall under that category during the year, maybe next 2 quarters overall?

Yes, yes. See, actually, sir, even this INR 86,000 crores, which is arrived after discussions among the banks, is having a floor level of INR 500 crores. So because of certain conditions, which were there, it should not be a fraud and fully provided, all those conditions are there, okay? So once this slot is over, again, I think there will be a larger discussion among the bankers to finalize to what level we want to bring it down so that to add more to the kitty of NARCL. So right at this moment, we -- maybe, we do not know, depending upon the threshold because we have a lot of stock with us.

Yes. Sir, so then in that case, other than NARCL, you are free to give it to the other ARCs.

That is there, open. That is also -- that we're exploring. Even now we are on the track, ARCs.

What is the plan for that, ARC? Any idea about this quarter and the next quarter?

No, no. This quarter, June quarter, we do not have any plan. And for the next quarter, we have shortlisted around 56 accounts. And then we are, again, going into the nitty-grities of those 56. Then we will finalize that how many accounts to be brought on to the block.

Amount-wise, how much approximately will be those 56 accounts?

We can safely say it is about INR 3,000 crores.

So why I'm like trying to put in a total of the numbers, because I think that one of the criteria which you could not fulfill as a PCA going out of the PCA of RBI, I believe, is your higher gross NPA and net NPA.

No, no. That part is over, sir. Net NPA part is over. CRAR is over. Leverage is over. Only on the profitable different, that is ROA. Once we are in profit mode, then automatically, it will turn into positive.

So hopefully, I mean, this quarter, you should perform well on the profitability front.

Yes, yes. We are sure on that front.

But are you finding it, in practice -- practically, are you finding it difficult to increase your loan book or credit? Or where the major handicap is there because of PCA?

We don't foresee any such big issue. What we see earlier was we were more dependent on the corporate loan book to increase our portfolio. When we had a hit and then bank went into PCA, the entire credit was in one way, it was under speed. So now we are -- because of the time period and also following the footsteps or action plan given by the RBI for PCA banks and also providing enough for the corporate loan, whatever the PCA was there, now slowly, it is all being freed up. So I think sir, instead of -- what we see is that instead of looking back only for the lessons what we have learned with that experience and also the lessons, we are moving forward to build up the credit book. It's not such as this one, Central Bank network and it's a brand name and customers profile is well entrenched in the society. And we have enough reach in the market. The only thing is that we have to move and then we get the business. That's all.

Sir, definitely, I agree, sir. And as my friend also just now put it one other analyst, is that you see, sir, if you go beyond 53% to 70%, now 60%, you will be needing about INR 20,000 crores more to be increased in your credit book. But which is according to me is not very difficult. When so many NBFCs are performing so well, why can't a bank like Central Bank, I mean, which has such a strong customer base, such a strong loyalty, data, reach. Only thing, I think, at the staff level, sir, I think some kind of orientation is further required down the line to the branch head to light up to that to take some good credit calls. I mean start taking decisions. Maybe you're -- of course, you are running the bank. So you are -- and now you've come from Canara Bank, much larger bank, you will definitely take care of that. But I feel personally that a bank like Central Bank increasing the credit book, loan book by INR 20,000 crores in 1 year, I don't think it's so difficult provided...

Yes, sir, I agree sir, fully agree. It's not a big thing. And let me tell you and let me share you that entire workforce is totally now, you can say, invigorated and to today's results also, because some approvals I have to take. Otherwise, whatever the good work was done by our field reps, I can say for the March, now they are entitled for 5 days of performance-linked incentive. The bank appears to be lost. But on the operating front, it has performed too good, and they are eligible for that. So this also adds to their motivation. And further, the mechanism, what I told you regarding the approval before disbursement, this is going to give a lot of comfort to the field functionality while taking the credit decision. So we don't foresee much problem for INR 20,000 crores increase in the loan.

Sir, my last question, again, a reptation only that, of course, you are silent on privatization. And -- but at least some feedback, some information being called from the bank, some exercise might have been done when such a credible newspaper gives this kind of report. There is no sign from the management or to the management that any such action is being taken?

Again, sir, I would like to reiterate the same thing. I want to be silent on this. There is nothing to add or substract.

I would now like to hand the conference over to the management for closing comments.

Yes. Thank you. Thank you very much. And whatever the guidance we have given, definitely bank will be performing and, where rightfully, some suggestions also came from our investors and analysts, a very welcome move. And going forward, you will be seeing Central Bank is one of the -- whatever the past we were there, with that brightness and with that soundness, we will be coming into the market. Thank you very much.

Thank you. On behalf of Antique Stockbroking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.