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

Ladies and gentlemen, good day, and welcome to Central Bank of India 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, and I welcome you all to the earnings call of Central Bank of India. We have with us today the entire management team represented by Shri M.V. Rao, Managing Director and Chief Executive Officer; Shri Alok Srivastava, Executive Director; Shri Vivek Wahi, Executive Director; Shri Rajeev Puri, Executive Director; Shri Mukul N., CFO; and the other team members on the call. Without further ado, I would hand over the call to Shri M.V. Rao sir for his opening remarks, post which open -- we can open the floor for question and answers. Thank you, and over to you, sir.

Thank you. A very good afternoon, and welcome to all participants. Thank you for sparing your time. Before presenting business highlights, let me share some of the information on the activities as organization we have carried out in the previous quarters. Number 1 is we have started CENTRAL CONNECT. This is the campaign what we started to bring back our own customers who left us in for the -- in the last 5 years. There is a very good response. And then we have fine-tuned our processes to improve the efficiencies. And also, we have brought changes in our structure, and we brought the CPAC, that is approval center concept to bring the confidence in our field functionaries to take the credit decisions. These are all on the activities part. Now coming to the business highlights. Let me share with you the net interest income, NII, has improved from INR 2,354 crores to INR 2,495 crores, that is 5.99% increase on a Y-o-Y basis and also 16.86% on quarter-on-quarter basis. And on the operating profit side, it has increased 1.08% Y-o-Y basis and 29% on quarter-on-quarter basis. And with this sustained performance, we have registered a net profit of INR 250 crores compared to net profit of INR 161 crores on a Y-to-Y basis, that is 55.28% increase on Y-to-Y basis and on a quarter-to-quarter basis, there is an increase of 21.36%. And coming to CRAR, it has improved from 12.34% to 15.38% on Y-o-Y basis. And on a quarter-to-quarter basis, it is 14.88% to 15.38%. And gross NPA slightly reduced. It is now at 15.52% and net NPA, which was 5.60% in September '20, now it has come down to 4.51% on Y-o-Y basis. And from quarter-to-quarter, it was 5.09% in June '21. Now it is 4.51% in September '21. Likewise, this provision coverage ratio is improved from 82.24% to 85.86% now. We stand at 85.86% on the provision coverage ratio, and NIM has improved from 3.21% to 3.36% on Y-o-Y basis and quarter-to-quarter basis, it is 2.84% to 3.36%. And you know very well that because of our network and presence -- larger presence in the rural and semi-urban centers, we used to maintain the leader role in the CASA. Now it stands at 49.79%. And coming to the network, brick-and-mortar branches continue to be our forte. And now with the increasing adoption of the BC network, total customer touch points now reached at 15,185 as at the end of the September. And the plans what we have at the BC outlets is it will be ramped up to 15,000 by March. And by December, we will be reaching around 12,000. Coming to the top line. Deposits, the total business is INR 5.12 lakh crores, that is 2.27% Y-o-Y growth. And total advances is down by minus 0.96%. But if you take the INR 4,810 crores, which we have written off in the month of March, if we compute that, then our growth will be 1.75% on the advances side. In the deposit mix, already I shared with you the most important and heartening is the CASA, which we are at 49.79% and total deposits stood at INR 3.36 lakh crores. And in the advances mix, earlier we have given you the guidance that 70-30 will be our objective. And for this financial year, we will be striving to reach 68% and 32%, that is 68% will be the RAM and 32% will be the corporate. And now RAM has reached 66.79%. If you see a year back, it was 63.94%. Now we are at 66.79%, and we stand by our guidance that our objective is to reach, and we will be 68% to 70% in between by the end of this financial year. Regarding the mandated targets, we have achieved all our mandated targets under agriculture and priority sector, small and marginal farmers and weaker sector. And more so, I would like to share that we have sold PSLC, that is priority sector lending certificates to the tune of INR 15,000 crores in this half year. So we have earned a sizable income from that. Regarding the credit support, we were there in the ECGLS (sic) [ ECLGS ] 1, 2 and 3 and 4. Altogether, we have given around INR 3,478 crores under COVID support schemes. Regarding the standard advances rated, earlier it was 76.08%, now we are at 79.53%. There is a good increase as for the rating. Accordingly, risk-weighted assets has also come down. Coming to the retail segment. Our home loan Y-o-Y growth was around 5%. In auto loan, it is 6.5%. And education, there is a degrowth. Other retail loans, there is an increase of 3.86%. And in this retail, let me share with you just 1.5 months back, we started our co-lending arrangements with NBFCs, where we have already disbursed around INR 380 crores, where the sanctions was more than INR 500 crores. Going ahead, this will be a separate vertical and bank is eyeing to reach at least INR 3,000 crores by the end of March. Regarding the SMA, if you see from June '21 to September '21, I have not given the September '20 because of the moratorium and other issues you are also aware, they are not the comparable figures. Here, if you see above INR 5 crores and up to INR 5 crores, both the figures we have shared in the presentation. Both in June '21, SMA-1 and 2 were constituting 5.38%. Now it is 4.8%. There is a reduction. And going forward also, we are confident in reducing this SMA portfolio from the book. And if you observe, June '21 above INR 5 crores, it was SMA-2 INR 1,516 crores. Now this stands at INR 222 crores. So almost we can say that SMA-2, which we see that as a stress in the corporate book, almost it is only 0.13% in the corporate side. And coming to the restructured book, COVID resolution framework and COVID-related restructuring, that is INR 6,014 crores that is there. And in standard restructured, which was restructured long back and continues to be on a standard category because of its performance that is INR 3,136 crores. And total restructured book, what we have is INR 9,150 crores. And as far as provisions that we are maintaining for this COVID book is around INR 650 crores. Coming to the NPA classification, total NPA, which is 4.51% net NPA and retail is 1.75%, agriculture is 7%. MSMEs 5.7%, and corporate and others is 4.52%. And coming to the retail sector. Within the retail sector of 1.75%, we have housing is 2% and vehicle is 0.42%, 4.2% is education loan, other personal loans stands at 0.75%. Provision coverage ratio, which I shared with you, which was 82.24% in September '20, now which stands at 85.86%, and the slippage ratio now it is at 1.45%. And similar guidance we have given for this year also that 1.5% to 1.75% in that range slippage ratio will be there. Regarding the net interest margins, now it is at 3.36%. And in that 3.36%, there is a small clarification what we have given because of the income booked, it was a INR 285 crores income booked in treasury of Kingfisher?

Kingfisher. One time.

Kingfisher. If we subtract that as a one time -- if we subtract, then also our NIM stands at 2.97%. So coming to the NPA movement. The opening balance, which was there at INR 27,892 crores, the total slippage INR 2,104 crores and reduction happened is INR 2,781 crores. And again, closing figure is less than the opening figure that is INR 27,252, crores. That is percentage of gross NPA stands at 15.52%, and net has come down to 4.51%. And regarding the NCLT accounts, we have total around INR 22,399 crores under NCLT. Almost 98.67% is provided, whatever the settlement that happens or resolution that happens in NCLT directly it is going to add to our bottom line. Regarding the capital ratios, now we are at 15.38%. That is CET1 at 13.41% and Tier-2 is 1.97%. Regarding the leverage ratio, we are at 5.15%. Coming to the financials. Again, just I would like to touch upon the net interest income. We are positive on quarter-to-quarter basis and Y-to-Y basis. And in a similar way on the operating profit, on Y-to-Y basis and quarter-to-quarter basis, we are positive. And provisions on quarter-to-quarter, there is an increase of 30.94% and the net profit, which already I shared with you, it stands at INR 250 crores, if you compare with the September '20, that is INR 161 crores and June '21 is INR 206 crores. Regarding the expenses, there is a good control on the expenses side and more so on the interest paid. And there is a slight increase on the operating expenses that we know well that because of transfers and other staff-related expenses that happened during the previous quarter that has contributed for the little increase. It is not a matter of concern for us. And the provisions, now it is INR 1,151 crores, that is the total provisions made for NPAs INR 311 crores. For written-off debts, it is INR 777 crores. And depreciation and provision for investment, including SRs is INR 292 crores. And for income tax, it is INR 103 crores. And financial indicators, costs on deposits further reduced to 3.84%. In the previous quarter, it was 3.93%. And in September '20, it was 4.45%. And yield on advances is 6.66%, which is reflective of transmission of the rates to the ultimate borrowers and also a lot of loans, which were in September '20, around 12% to 13% under RLRR, that is repo rate linked, and now it has jumped up to 23%. So that is also having an effect on the yield on advances. Cost of funds, 3.90% and credit cost is 0.72%. And ROA is 0.29% and ROE is 1.09%. Likewise, business per employee and net profit per employee also has gone up. Coming to our investment portfolio, just I would like to touch upon on 1 slide, where you will find how this tweaking has happened for the past 6 months. And if you see the HTM, AFS and HFT portfolios of September '20 and September '21, in the AFS book, modified duration, which was 2.71% at that time now, it is at 1.95%. And SLR modified duration is 2.37% in September '20, now it is 1.66%. And P.V.01, that is SLR plus non-SLR put together, which was 14.51% in September '20, now we have moderated and brought it down to 8.29%. And likewise for SLR P.V.01, 11.56% which was there in September '20, now we are at 6.07%. That means whatever the book we have, it is totally, totally insulated from the rising yields whatever will be. And our estimation is even by December, even if it reaches 6.5%, we are fully protected from the M2M. This is my brief presentation. Thank you for your time. Any questions is welcome. Now it is open for you. Thank you. Just before adding that, let me tell you regarding the PCA. This is only the bank now in the PCA. As far as the 4 triggers -- 4 indicators that what we have, we are totally above the benchmark. Even in the June, we have touched all the 4 -- satisfied the 4 benchmarks and now also capital adequacy ratio, now it is 15.38%. Net NPA is 4.51%, trigger was 6% and ROA now 0.29%. And leverage ratio, now we are at 5.15%. Thank you. Thank you very much.

[Operator Instructions] We have first question from the line of Ashok Ajmera from Ajcon Global Services.

Sir, congratulations, Rao sir and the entire team for the fantastic results. We were expecting even in the last quarter also, we got a feel that the bank is now getting totally transformed and the performance will be better. Having said that, sir, I've got a couple of just information point and some queries. Sir, on these 2 accounts, major DHFL and SREI, what is our -- position in our bank? How much did we -- we had the exposure on DHFL? How much have we got in cash and in bond? And in SREI, how much provision have you done? If at all, we had any exposure?

Yes, we have the exposure in both the accounts. In DHFL and SREI, both were around INR 1,200 crores. It is only just to supplement it. That's why there is no big change in the gross NPA. If you see the total our gross NPA, there is a very little change in the gross NPA because SREI has replaced the DHFL. And as far as the provisions that are concerned, SREI we have already made 50% this time.

Okay. 50% provision has been made. So in case of DHFL, out of that whatever 34%, 38% also total we got, out of that cash and the equal amount or a little more than that is bonds. So what treatment that bond we have given, like out of this INR 1,200 crores, if you've got about, say, INR 550 crores or INR 600 crores total, out of that maybe INR 300 crore bond. So what treatment have you given to the bond? And how much provision has been reversed?

It is INR 313 crores that is the bond swap we have received. And as far as the treatment is concerned, these bonds were issued by the Piramal, which is AA rated. It has nothing to do with the DHFL. So whatever the rating that goes and the subscription to these bonds happen, so it is just like another market operation. So there is no requirement and also necessity to make any provisions for this.

Sir, but about -- even on the security or the bond, about 15%, 20% is required to be provided, has that provision been done, I mean, on this bond or it is 100% taken in the investment book?

It is 100% taken on the investment because it is issued by the Piramal.

Yes, yes, that is there. But even on the security as a 10-year bond -- anyway, so no provision has been made on that. So how much total has come in the income, so this entire INR 313 crores and also the cash part are about INR 275 crores or INR 300 crores, isn't it? That has all come in the income of this quarter?

Yes. Yes, it has income.

And again that you said that INR 600 crores provision you have made for SREI?

INR 273 crores is the cash component.

Yes, sir. Good, sir. Now, sir, will you throw some more light on the slippages of INR 2,104 crores as against INR 1,281 crores? So one is that SREI.

INR 1,200 crores is SREI.

So out of this, about INR 600 crores is the SREI, isn't it? Or the slippage and how did you calculate this INR 2,104 crores?

INR 2,104 crores comprises -- just a minute, our GM recovery will give you the details. Yes.

Mainly SREI is INR 1,149 crores, then next biggest is Panipat-Jalandhar, INR 168 crores. Rest are all miscellaneous small accounts.

Okay, sir. So this is one of its kind, means we don't have any such other lumpy account for the future?

No, no. Not lumpy. Not on the corporate side, and we are not seeing stress on the corporate side.

That's why in our SMA-2, that's what I was stressing more. If you see the SMA figures on the corporate side, above INR 5 crores, which was INR 3,157 crores in June '21, now it is INR 1,017 crores only total. And SMA-2, which is the most worrying always for any banker, which was INR 1,516 crores in June '21, now it is only INR 222 crores. Going forward, we don't foresee much of the stress on the corporate too.

No. Definitely. It's a very strong performance and control on the SMA. Sir, the INR 16,788 crores of SMA-0, 1 and 2, it includes, I believe, is INR 5 crores also, below INR 5 crores?

Yes. Yes. Both the things we have given. You have seen a number of accounts above INR 5 crores, up to INR 5 crores, and total we have given that is.

Good sir. Sir, now since we are comfortable on all the parameters, what could be the reason according to you for RBI not taking it out from the PCA when all other banks have been done with? How positive you are that after the September results, now soon we will be out of the PCA?

See, I have no comments to offer from the RBI perspective. But one thing I can make it very clear, we want to assure them once again, again, are going back to the regulator through a letter, through my SSM, saying that the factors which were contributing for the spike in provisions in the previous, previous years, that was -- that is already taken care in this year. That means this aging provisions, which used to be high in some quarters. In some quarters, it used to be less. What we did in this financial year is for the entire financial year, we have calculated the total provisions that are required for the aging irrespective of the recovery, which may happen also definitely. But as a prudent banker, we have taken the total provisions and we have equated for the 4 quarters. Even though in 1 quarter, my provision requirement is less, even then I have provided in such a way that it should take care the spikes in the provisions in the subsequent quarters, that means that we have evened out the spikes. So going forward, we may not have any problem as far as the aging provisions that are going to come in the next, next quarter. So same thing which we are going to -- in detail, we are going to elaborate to the regulator and also request them to move us out of PCA. And one more thing just I would like to clarify, PCA or non-PCA, it is not going to affect our performance. We will continue to do our best, and we will be excelling in our area.

Sir, this -- I mean, in order to have a better result of -- like what was the need of providing 100% for the fraud account of INR 130 crores in this quarter when we were allowed 4 quarters? So that would have given a little better performance also, though, of course, it is taking care of the future liability. But since it was allowed by RBI to be written off in 4 quarters, what is the reason of entire INR 130 crores being provided for this quarter?

Same reason. Same logic is going to apply here also. The way we have evened out our requirements on the provision, that means we do not want to have any spikes. In the similar way, here also same thing, same logic followed. I do not want to show onetime more growth and more profit. And next time again going down, no. Consistency, we want to maintain, and we will show and demonstrate to the market, this organization has come out of the woods, and we will be consistent in the performance.

Sir, just last question on this co-lending, will you give some color on the -- I mean, how it benefits to the bank? And how much like you said that INR 380 crores is already there and you have a very ambitious target of INR 3,000 crores or so under the co-lending scheme. How much is co-lending for gold? And how much is co-lending for MSME and other which you are tied up? And how is it helping the bank as far as yield and returns are concerned?

See, number one, gold is yet to yield appreciable number. It is in double digit only. It has to grow. Coming to housing loan and MSME loans, the co-lending concept, if you go into that, see, as a bank, in certain areas, I do not have the reach. Number two is monitoring mechanism what banks are having and then what the NBFCs are having totally different. And we are confident that the mechanism, what the NBFCs are having, they are going to deliver more on the monitoring so that my -- whatever the stress I foresee in MSME or in retail may not happen in this co-lending portfolio. That is number one. Number two is, I have a surplus of more than INR 30,000 crores now because my CD ratio is very, very low in the entire banking industry. Now I am searching out for the avenues where profitable deployment will be there and also whatever the risk that is arises on account of lending will also be taken care. On both the fronts, this co-lending model works well, and that's why we have gone into this arrangement. And going forward, we will be having tie-ups once this stabilizes, that's what I indicated in the previous quarter also. So within a 1 month or 2, once the stabilization happens, we will be move -- going further more tie-ups.

So there, you give 80% and this NBFC, they give 20%, isn't it?

Yes.

80-20 is the ratio. And sir our interest rate remains competitive in this?

Yes, yes, yes, definitely. They are competitive. Again, sometimes we are better off than in our usual direct trending. So it is very competitive.

[Operator Instructions] The next question is from the line of Ashlesh Sonje from Kotak Securities.

Just one question from my side. I wanted to know on our corporate NPA book, which are the accounts where we expect recoveries during the second half of FY '22?

In the second half, we are only just hoping for the NARCL to start their operations so that whatever the identified accounts, which are 7 in number and maybe amounting to around INR 3,000 crores may move out of our books. INR 2,570 crores, precisely.

Okay. And sir, anything apart from NARCL?

Apart from NARCL, right now, we are not seeing any visibility in bigger accounts.

Maybe Videocon. But we do not [indiscernible] in a lot of legal tackles.

Correct.

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

Congrats on a good set of numbers. Sir, a few questions from my side. One, I just wanted to understand in terms of this SMA portfolio a little better. So if I look at basically the SMA portfolio of below INR 5 crores, that is at around INR 15,700 crores. So how comfortable or basically how worried are you in terms of this portfolio? And how does this portfolio behavior is different from the pre-COVID level? If you could just help understand that.

Yes. Just I would like to bring you back to the June '21 figures. INR 3,599 crores is the SMA-2. Earlier also, I clarified that SMA-2 will be the much more worrying factor for all the bankers rather than SMA-0. So out of INR 3,599 crores, if you see the slippages what happened in the September is around -- how much it happened?

In September?

September, retail below INR 5 crores?

Around INR 600 crores.

INR 600 crores?

Yes.

So likewise, even the SMA-2, which is there in September '21 is INR 3,539 crores. Going forward, what we see is we are having the war room concept here, and then it is working well. And then it is controllable. And also we see that much of the slippages may not be there. It is only a controllable and expected lines only that slippages will happen. That's why our guidance just we have given around 1.5%.

Okay. And sir, if you could just shed some light in your experience, how was this portfolio in terms of the pre-COVID because this portfolio is slightly on the higher side, and you may look at a declining trend going forward as well, right?

Yes. Exactly. See, COVID, what happened -- because of the Supreme Court, moratorium and all those issues, the figures won't give you that comfort to infer anything from that. Meaningful inferences may not be there. What we see is from the SMA-2 figures of June and September and whatever the things that are slipping and the activities and also geographical areas, we are confident that the slippages are not -- may not be to the extent of what we cannot manage.

Right. Right. And sir, is there any overlap between the SMA and the restructured book?

See in...

There won't be slippages.

There may be a little -- may spill over here. But as a restructured portfolio, our focus, when it moves to this one, SMA category, it will come under SMA category. But definitely, as you say, that little overlap may happen there.

It could there.

And sir, finally, a broader question in terms of your strategy for probably a little longer time. If I actually look at one thing, Slide 13, where you have given the standard advances exposure. I see that there is a lot of churning happening where your AAA proportion has actually increased quite significantly and your BBB and even A has actually shrunk and -- BB and below. So once we are out of the PCA framework, would our risk appetite be to go again into these segments and actually lend?

No, no, no, sir. Never it is going to happen. See, again, we do not want to learn the lessons again and again, okay? So definitely, this one, but your observation is quite right regarding the AAA. What the churning has also taken place because of the conscious focus that -- as a bank, we have a lot of CASA. This is one of the best in the industry that is 49%. My cost of deposit is only 3.8%. There's no point for me, even in the pricing, I will always have the upper hand if I compare with my peers as far as the pricing is concerned. There, we entered that market. So even though I'm earning less, I know that it is dead sure that nothing is going to happen. So that's why our AAA has gone up and it also aided us in reducing our risk-weighted assets portfolio.

Right. But sir, do you believe that actually the corporate cycle is behaving well? And because of the past experience, do you think that you may miss on the opportunities of making more money?

No. No. It's not like that. Even the corporate side where we are very choosy that's what I'm saying. In corporate, now we are maintaining the balance. We want to maintain the balance of 70-30. And in the near term, it will be 68% and 32%. In the 32%, we know very well what are all the assets that are maturing in this time, and we know what type of assets we have to pick up. Even on the pricing side, I'm getting the good return where I'm confident I'm going for the SPVs where totally, it is a ring-fenced mechanism, and we are totally avoiding the financing the holdcos now. And we will be focusing on the SPVs, and we should have a definitive visibility on the equity front from where it is coming and what is the quality and strength of that equity. And also when cash flow starts, total ring-fencing should be there. So there is nothing from our side to abstain from the opportunities. But definitely, as a bank, we will be looking at the reasonably qualitative corporate portfolio.

Okay. And sir, in this one more thing in terms of on the growth perspective. Because our cost of funds is so low, are we actually capturing in terms of the customers where the financial institution or other financial institution may be at -- giving our loans at a higher rate? So is the balance transferring happening to us or how do we actually look at the growth in terms of the retail and housing despite a lower cost of funds, sir?

See, retail and housing is entirely different ball game. It is not much depends on the refinancing. As far as the corporate side is concerned, you are also aware now in this market, very few capacity expansions or new things are happening. Otherwise, it is only refinancing where corporates are reducing their cost of borrowing.

Okay. And there, we are seeing the benefit that is reflected in actually growth in the AAA-rated entities?

Exactly.

Right. And sir, finally, in terms of -- just if you could actually give an outlook in terms of how much would we selling down to NARCL? And broadly, your recovery from the technical write-off, how do we actually look forward towards these 2 numbers in the next 3, 4, 5 quarters?

Yes. NARCL, we can give reasonably calculated number.

In NARCL, we have 7 accounts which are identified out of 22. As you are aware, there are 22 accounts pan-industry. And our exposure there is INR 2,507 crores. So the reduction expected through NARCL is INR 2,500 crores.

And sir, if you could also help in terms of the treatment, whether these would be written off or fully provided accounts?

Some of the -- like I can say, out of 7, all of them are fully provided. 100% provided for.

So this will come as basically the provision write-back in the provision line item and the gross NPA will fall?

Yes, whatever we recover will add to the bottom line.

And the provision -- gross NPA will fall by INR 2,500 crores?

Exactly. Exactly.

[Operator Instructions] The next question is from the line of Amit Mishra from Indus Equity.

I have 2 questions. Seeing there are certain loan growth opportunities, which segment are we expected to contribute to growth for us? And the second question is, what is the recovery pipeline for second half of the year?

See, the recovery pipeline, that's what in the bigger accounts, what we see is only NARCL that bigger accounts will move out from our book. And then because since these are all 100% provided, that will be contributing to our bottom line in an appreciable extent. As far as the loan growth is concerned, it is on track. As far as the corporate book, which we are eyeing for that 30% what I was again repeating, 30% and 32%. So we are in a position to pick up the assets. There, we never have any issues as far as the loan growth on the corporate book. Coming to the RAM segment, yes, now we are focusing more on the growth side, on the retail segment, agriculture and MSME. And coupled with that, it will be -- our co-lending will be complementing to this portfolio.

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

So sir, taking this -- our NARCL discussion forward, so almost about 1.5% of our gross NPA will come down in the next quarter when this INR 2,507 crores goes. So this becomes our gross NPA will otherwise also come down to 14%, isn't it, sir?

Correct. Perfect.

And sir, now one more thing, sir, in the case of the SREI, he objected to the section of the government saying that I was solvent and I could have run the business with the restructuring and other things. So it means he is capable of paying the amount and this thing. So what was the need of the almost -- I mean, full 50% provision? Is that informal message from the RBI? Because the other bank also today said that we also made 50% provision as against the 15%, which is mandatory required. So have you got some fillers that minimum 50% has to be provided for?

No. No, sir. No such type of direction or indication from anyone. It is only our own internal capability of providing that amount. Since we had the opportunity to provide, we have provided. And whatever the SREI's comments, on this platform, I have no comments to offer.

Okay, sir. No, point well taken, sir. Answer well taken. Sir, in case of the DHFL also, though the settlement has taken and Piramal has paid you the cash and the bond. But still, the banks are saying that we can still go against the promoters because they had given personal guarantee and there are some uptake of recovery. Have you also assessed...

Yes. That is open, sir.

Pardon?

That is there. Personal guarantees invocation is there.

Is there?

Yes, yes.

So any assessment of some possibility of -- I mean, any idea of some more...

No speculations at this time because a lot of things are involved. Okay, that legal provision is there and everyone is exploring that.

Okay. Sir, when I was abruptly cut in the first time of my opportunity because I have taken a lot of time, I was just -- we were on the point of this NBFC and co-lending. So there, I was asking you that, yes, it's a very good move and you said that you have a lot of -- because your CD ratio is only 52.29% and you have a lot of cash to deploy. So I was just asking whether in that case, you are open to A+ rated NBFCs for direct lending also for the priority sector or otherwise?

No. No. Now...

That's a co-lending route.

Through co-lending route only, we would like to increase our book there. As far as the direct financing to NBFCs because we have internally fixed ourselves that we should be 10% of our loan book should be towards the NBFCs, right now we have around 11.7% or 11.8%. That's why direct financing to NBFCs is not happening at our end, except for the exposure neutral lending. New ones, may be going forward, we may see, but not at this moment.

Yes. Because that is another opportunity because all these NBFCs are doing very well these days again.

Always -- we always learn which are incubated only during the good times.

Yes. Ashokji, Vivek Wahi this side. If NBFCs are really doing well, that means they are growing more than 10%. If they are growing more than 10%, then for them also co-lending is a very good option. So that really...

Sir, no, that is okay. But there are some -- I think, some practical problems also like especially, I saw in case of gold and the security creation, the gap between the -- there are -- anyway, I mean those are the problems, which -- I mean, these are the dealing problems because you are expanding your business in that direction because the main thing is the security creation coming to the bank vault and the certification, the valuations and all those things. So co-lending has its own -- some of issues...

Yes, it's evolving. It's evolving.

But direct lending and especially to the priority sector onward lending, I don't think it should be a problem. But anyway...

It's not a problem, yes. It's not a problem, but only our internal -- our own restrictions, what we have kept on ourselves.

All right, sir. So apart from this, your retail in co-lending, do you see any green shoots now in the business industry, MSME, some midsized corporates because unless you do that, to increase the book size loan book, I think only by retail or this very, very competitive products, you may not achieve that kind of thing when you are so comfortable with 52.29% of the CD ratio and good capital adequacy now. So are you looking at or have you -- are you working on that or some...

See, we are open to all avenues as far as lending is concerned. Only base rule is, again, we should not go back and repent afterwards. That is only the base rule we have.

I think I lost. Hello?

Yes. Hello. Hello.

I think there is some interruption from my side only or...

No. No.

Is it audible from my side? Is it audible?

There were some interruption in between. I mean I couldn't hear you fully.

No. No. Just what I was saying is we are open to all avenues as far as the lending is concerned. Only principal and base rule what we apply is we should not repent in future. That's all. That is only the base rule we apply.

No. No, that is, of course, the prudence is required and the base rule of those kind is really and because of that, the bank is now again coming back to its past glories back. Having said that, sir, this -- on the treasury income and the -- what is your future outlook on that? And you said, I think in some of the -- answering some of participants asked questions, that you are very comfortable on the yield. And so how comfortable you are...

No, it's not that comfort. Comfort, we are deriving an account the way we have immuned our AFS book from the possible increase in yields that we are foreseeing. And we had that inkling, and now it is coming true what we expected as far as the yields are concerned. So in that perspective, we had tweaked and also shifted a lot of securities in the month of April. At that point, whatever the loss we have booked because of the shifting, that appears to be very small amount now what we have seen in the increase in the yields when it has gone for the M2M. So keeping that in mind, we have moderated and also shifted. That's why our modified duration and P.V.01 all the things are in place. Even for December, if yields touch 6.5%, we are totally immune from that M2M losses.

Yes, because you've got almost about INR 1,750 crores in this half year from the treasury operations. Look at your -- the segment-wise, this wholesale loss is...

In between, it is dropping. Your...

[Foreign Language]

Hello? I think we lost Mr. Ajmera.

In the meanwhile, we'll move on to the next question. That is from the line of Mr. Sohail Halai from Antique Stockbroking.

Sir, just a couple of questions again. One, if I actually look at your loan-to-deposit ratio of 52%. In the environment, what we believe is slowly and steadily, the interest rate would rise and probably the liquidity will get tightened. In this -- can you actually tell me how far away are you from basically raising the rates in terms of your deposits?

Right now, there is no thought on that. And as and when the situation evolves again, our ALCO will meet and take the appropriate decision at that juncture. Right at this moment, we are not tweaking any of the rates. And we are also conscious because of our presence in the rural and semi-urban areas and also our demographic exposure tilted towards the senior citizens, we do not want to reduce the deposit rates even -- at this moment, it is very easy for me. But keeping our commitment to the society and senior citizens' problems, our committee has taken the view that let us not reduce the rates drastically. Let us maintain. And whatever the liquidity we have, let us go for the profitable deployment.

Sir, let me little rephrase the question. Say, about 6 months or 9 months down the line, probably the private banks may start raising their deposit rates. Would we actually chase private banks in terms of raising the deposit rates? Or we would be comfortable till the time there is liquidity in our balance sheet?

See, one thing I can tell you, we will be balancing our activities from the proactive measures and reactive measures. We will not be totally fully on the reactive side when other banks raises, then we will think what to do or liquidity exhausts at our end, what to do. In that way, we won't to go. We will be balancing. And anyhow on a daily basis, we have the liquidity reports on our MIS. We will be taking the conscious decisions on that.

No, I agree, sir.

It may be premature for me to forecast at this moment.

No, sir. I agree. The only question that actually came in my mind is probably in the medium-term perspective, while we have very, very excess liquidity, this would help us as well as some of the other PSU banks because the cost of fund differential will continue to increase as the liquidity intense between us and the peer banks. So just wanted to collaborate that with you. Sir, second, in terms of -- you have actually grown significantly as discussed in terms of the AAA book. But if I look at the current account growth, that is still muted. So are we able to -- in terms of increase the relationship or strengthen the relationship with some of these large corporates? And your thoughts on that?

Yes. Yes. That is the precise reason why we are entering into AAA with a pricing advantage what we have. And we have already worked out for the 2 big corporates, how ancillary business can also be taken into so that value-added services and also to their employees and retail levels to their employees, all sorts of things we have bundled it together. So the way you see the private banks are making the ecosystem financing some terminology, so we may not be using the terminology, but precisely, we are doing the same activities so that once we have an entry, we want to ring-fence the entire cash flows not only for the company, but also to their employees. Further added to that we have gone one step ahead of taking their creditors and debtors information so that we can also explore for the further business.

Understood. Understood. This is basically the entry point and then you will be targeting the entire ecosystem?

Exactly.

That was the last question for today. I would now like to hand the conference over to Mr. Prabal Gandhi for closing comments. Over to you, sir.

Thank you. On behalf of Antique Stockbroking, I would like to thank the entire management of Central Bank of India, M.V. Rao, especially, for the time that he has given us. And thank you. And, sir, would you like to make some closing remarks?

No. Just I would like to assure all of you, first of all, thank you for sparing your time. And we would like to add to the market that we will continue to perform and excel in our operations. And whatever the interest you are showing earlier, please continue to bestow your -- such type of interest in our bank. Thank you.

Definitely, sir. Thank you so much. And with that, we'll end this call. Thank you, everyone, for participating. Thank you.

Thank you.

Thank you very much. Participants, on behalf of Antique Stockbroking Ltd, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.