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

Ladies and gentlemen, good day, and welcome to Central Bank of India Q2 FY '24 Conference Call. [Operator Instructions] Please note this conference is being recorded. I now hand the conference over to Mr. Raju Barnawal from Antique Stockbroking Ltd. Thank you, and over to you, sir.

Yes. Thank you. Good morning, everyone. On behalf of Antique Stockbroking, I welcome you all to the Central Bank of India Q2 FY '24 Earnings Conference Call. From the management side, we have with us today, Mr. M.V. Rao, MD and CEO; Mr. Vivek Wahi, Executive Director, Mr. M.V. Murali Krishna sir, Executive Director; Mr. Mahendra Dohare, Executive Director; and Mr. Mukul N., Chief Financial Officer. Now I hand over the call to the MD sir for his opening remarks, post which we will have a question-and-answer session. Thank you, and over to you, sir.

Yes. Thank you. Very good morning to all of you. First of all, let me thank for sparing your time during these festive days. And coming to the Central Bank's performance, let me highlight the 2 milestones, which are very, very important for us. One is bank has crossed the total business of INR 6 lakh crores during this September quarter. And then we have recorded highest-ever net profit in a quarter, that is INR 605 crores. That is the 2 milestones what we have achieved. And coming to the overall results, I will give you brief highlights about the results and nitty-gritties will be shared by our CFO, Mr. Mukul Dandige. Coming to the highlights. Bank's business has grown 11.51%. That is, we have reached a level of INR 602000 crores. And total deposits grew by 8.21%, now stands at INR 3.71 lakh crores. And gross advances have increased by 17.26%, stands at INR 2.31 lakh crores. Cost-deposit ratio now it has inched up to 62.43% of Y-o-Y, if you see, that was 57.64% in September '22. Gross NPA, there is a noticeable decrease from 9.67% to 4.62%. And then net NPA has come down from 2.95% to 1.64%. Provision coverage ratio also improved. Now it stands at 92.54. And as I told you, the important milestone, net profit has recorded INR 605 crores. If you compare with earlier Q2 of financial year '23, that is INR 318 crores. Operating profit improved by 13.47% to INR 3,369 crores. And then net interest income has increased by 10.23%, that is INR 3,028 crores. Net interest margin, it is 3.53% as against 3.12% of Q2 of financial year '23. And return on assets has increased to 0.62%. And then return on equity is 2.31%, and our CRAR has improved to 14.82% when you compare to the previous of 12.14%. And net profit, that is INR 605 crores, that has increased by 90%. Operating profit is reduced by 12.47% on Y-o-Y basis. Net interest income grew by 10.23%. Total income has improved by 19.07%. Return on assets improved by 0.62%. These are all the broad highlights, which I have shared with you. And now with further details, our CFO will make a presentation. Yes, Mukul?

Thank you, sir, and good morning, everyone. MD sir has given you a brief overview of the major financials. I'll give you the other details of the financials. The total interest income of the bank has improved by 19.43% on a Y-o-Y basis and 1.74% on Q-o-Q basis. The net interest income has also grown by 10.23% on Y-o-Y basis and it stands at INR 3,028 crores as on September '23 quarter. The total income has grown by 19.07% and stands at INR 8,412 crores. On a Q-o-Q basis also, there is an increase of 2.79%. The total expenses have increased by 29.43% on Y-o-Y basis and 8.45% on Q-o-Q basis and stand at INR 6,882 crores. The operating profit was at INR 1,530 crores for September '23. And the provisions and contingencies were at INR 925 crores. They were lesser by 35.31% on Y-o-Y basis and around 34.86% on Q-o-Q basis. And that is why the net profit has improved by 90.25% on Y-o-Y basis and 44.74% on a Q-o-Q basis. The fee-based income has shown an improvement on Y-o-Y and Q-o-Q basis at 11.45% and 26.18% in all. And the total non-interest income also has shown an increase of 16.59% on a Y-o-Y basis and 10.64% on a Q-o-Q basis. And it stood at INR 1,061 crores for September '23. The interest expenses, as I told, have grown by 26.85% on Y-o-Y basis and 6.77% on Q-o-Q basis. The staff cost has increased by 30.05% on a Y-o-Y basis, and it has come down slightly by 3.56% on a Q-o-Q basis. The other operating expenses have increased by 39.55% on a Y-o-Y basis and 39.03% on Q-o-Q basis and stand at INR 1,122 crores as on September '23. Provisions. The provisions for NPAs were at INR 1,929 crores in September '23, an increase of 80.28% on Y-o-Y basis and a substantial increase from INR 244 crores in June '23. However, with a write-back of provision from standard assets and the depreciation on investments, also a slight write-back of INR 42 crores on income tax, we could, I mean, manage the overall provisions at INR 925 crores and the net profit was at INR 605 crores. The asset quality trend, already MD sir has touched upon, it has come down -- the gross NPA has come down from 9.67% in September '22 to 4.62%. And the net NPA has come down from 2.95% to 1.64%. Noticeably, the net NPA in absolute numbers has also come down from INR 5,407 crores in September '22 to INR 3,664 crores in September '23. The other important thing is the major ratios. Provision coverage ratio has improved to 92.54%. The slippage ratio was at 1.22%. However, if we discount the one large corporate account, then the slippage ratio was only at 0.30%. The sector-wise NPA classification, if we go through, the retail net NPA was only at 0.73%. Agriculture, also, there was a substantial improvement and the ratio was at 4.35%. MSME at 2.76%. And the corporate and others were at only 0.31%. Within retail also, the NPA of -- net NPA of housing loan was at 0.72%. Vehicle loan was at 0.33%. Education loan was at 0.76%. And the personal loans was at 0.82%. The business performance, already MD sir has touched upon. However, I will give you a breakup. Total business improved by 11.51% on Y-o-Y basis, and the deposits improved at 8.21%. CASA at 4.90%. And the advances grew a very robust rate of 17.26%, out of which the RAM was at 14.24%. Noticeably, the CASA percentage still remains one of the best in the industry at 49.40% and remains our core strength through which we can choose the good rated corporate accounts and maintain our NIM also. The corporate advances grew at 23.54%. And CD ratio improved to 62.43%, which is an improvement of 479 bps. Within deposits, our savings grew at 5.53% and time deposits grew at 11.77%. If you see the credit performance, the retail grew at 15.19%, the agriculture at 7.47%, MSME at 20.25%. And total RAM grew at 14.24%, crossing the milestone of INR 150000 crores. The total risk-weighted assets -- credit risk-weighted assets were at 61.80% also, and it was a substantial reduction of 324 bps on a Y-o-Y basis. So that was all about the overall business parameters that I had to share with you. Now we are open for any question and answers.

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

Congratulations...

Excuse me, ma'am. I'm sorry to interrupt. Ma'am, I advise you to use your handset.

Can you hear me better now?

Yes, ma'am. Please continue.

Sir, congratulations. Sir, my first question is on deposit mobilization. Obviously, you have a very high CASA, so it may affect you less. But for everyone, cost of deposits is rising for known reasons. And given that the incremental deposit mix is deteriorating as in less of CASA, cost of funds continues to rise. So when do you think cost of deposits peak? Because everyone is giving festive offers that will continue. The festive offers are for 300-, 400-day deposits, so they'll continue for 1 year. So how does it all pan out?

As far as this deposit front is concerned, as far as our bank is concerned, we have enough liquidity because of the CD ratio what we have at 62%. And we will continue to maintain our CASA ratio also, whatever the increase that is happening on the deposit front. Yes, whatever the observations that is there and what the market condition right now, where deposit rates are growing and then many of the market participants are also bringing a lot of variance, but all are in the short term. Now given the RBI Governor's address recently, what we feel that this peaking of deposit rates may get stabilized in the December quarter. I don't say it will get reduced, but the peak may get stabilized in December quarter. And accordingly, our ALCO also estimates what is the runoff what we have in the CASA deposits to term deposits, and then vis-à-vis what is the rate we have to maintain so that our deposit should not flow to other competitors. So that is how we are maintaining our game here.

So sir, what is your benchmark deposit bucket? Because for most banks, it's anywhere between 400 to 499 days. So what is your benchmark bucket? And what is your festive rate offer there?

Maximum for me is 444.

Okay. And what is the rate there, sorry?

7.10%.

Okay. Okay. Got it, sir.

One more thing, ma'am, wherever my presence is there, 69% of my branches are rural and semi-urban. And typically, it is in the interior of Maharashtra, interior of Bihar, especially in Eastern Bihar, and also Eastern Bengal and Madhya Pradesh since we hold a leadership position there. So this rate of interest a little bit agnostic to the customers there because of the presence of single branch and then these types of things are there. That's why we always incentivize our saving bank customers. If you see the PSB scenario, it is at 2.90 we offer savings bank. Consciously, we know that our customer segment who are in the rural should not suffer because of this. We are not maintaining the lowest SB rate also. So we are maintaining that equilibrium there.

Got it. Got it. Makes sense, sir. Sir, just one last question from my side. Basically, you said that there was one corporate slippage. Which sector was that?

That is the aviation, madam. I do not want to name the -- but everyone knows that is the airlines. Yes.

We will take the next question from the line of Prabal from AMBIT Capital.

Am I audible?

Yes. Yes. Yes. Please go ahead.

Congratulations on achieving 17% loan growth. Sir, my first question is corporate credit is growing by 24% for us. So what is driving this? And I see in the presentation that the share of AA and AAA-rated customer have gone up at a faster pace. So how is pricing in the market with respect to corporate accounts?

In corporate accounts, that's what we are saying earlier, our philosophy of maintaining the credit balance of 65-35 will continue to be there. That is 65 RAM and 35 corporate. And coming to the corporate also, we are very much conscious of the risk weight of what we will be acquiring. That's why our overall credit risk weight of our gross advances, which was there at 65.04% in September '22 has come down to 61.80% in September '23. So mainly, whatever the assets we are acquiring from the corporate book, almost they are AAA or max AA. We are conscious of the risk weight. And as far as the pricing is concerned, that's what we told you earlier, because of our strong CASA position, we have that pricing power and we are leveraging all that.

Again, the growth is driven in any particular segment? Is it term loan, working capital, how is that?

It's all evenly distributed. It's not that only -- maximum is only 1-year term we are extending. And in some of the things where we have some term loans, it may be from 5 to 7 years.

Okay. And sir, these corporate loans, these are mostly on MCLR pricing?

Maximum is MCLR pricing. I think in 4 or 5 accounts, it is only external benchmarking we have done, keeping in view of the market condition.

And sir, just curious to know that -- our cost of funds from March to September has risen by 65 basis points, but then MCLR 1-year benchmark has just risen by 15 basis points. So why is that the case?

See, that's what I was saying to -- though we have ample liquidity, my CD ratio is only [ 62.5% ]. I have to increase my rate of interest on term deposits to protect my own deposit base and also to provide something to my own customers. That is number one. Number two, having said this, we are conscious that cost of deposits have gone up by 71 basis points. If you see the yield on advances, which have gone up by 125 basis points, so there is a trade-off here. What is that we are increasing and what is the increase you are making in your incremental advances. So every transaction, if it proves to be profitable, that we are entering into that.

No. Actually, my question was -- my understanding was that if cost of funds go up, then MCLR benchmarking will also go up. But cost of funds has gone up, but a proportionate MCLR hike has not been taken care of. So will that come in future? Or why is that the case?

The MCLR increase is totally a factor of our pricing, which is happening in different buckets of my liabilities portfolio. If my liabilities portfolio increases any much on 444 bucket, then I will also increasing certain amount comparing with the market. And where strategic premium or business risk premium, that is credit risk premium, we are factoring depending upon the rating of the account. So in the MCLR, though it is -- appears to be lowest in the market if you compare with all the banks, but at the end of the day, final pricing is happening with the markup.

Understood. And sir, what will be your growth guidance for this year and next year, maybe?

This year, we have given total business growth -- our achievement, that we will continue to hold that 10% to 12%. And deposit growth will be 8% to 10%. Advances growth, this we have given, 15%. This time, we have touched 17%. Probably, it will get moderated with the way we are balancing our credit book. This is how the main top line numbers guidance is concerned. And NIM, we continue to hold above 3 and we are maintaining that. And gross NPA, we have given for this year below 4.5%, and net NPA below 1.5%. Definitely, we will be touching that figure what we have given. And PCR is also we have given 93% to 95%, that we are going to achieve. This is overall. And return on asset guidance, we have given 0.70%, that we will be easily achieving that part. That may be taken as a floor.

Understood. And if you can share your breakup of loan book in terms of repo, MCLR and fixed?

In total portfolio, what is -- we will provide you separately. Right now, I'm not having it, okay?

Sure, sir. Not a problem. Just last question, if you have incremental cost of funds number with you at this point of time?

Incremental cost, do you have?

We will provide you, Prabal.

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

Congratulations, Rao sahib and team for the maximum quarterly profit of INR 605 crores. With this profit, there are some couple of questions and some clarifications. This profit has come on the back of reversal of the provisions. Like provision is only INR 967 crores, whereas NPA provision has gone up to INR 1,928 crores. And the tax is also, I think, as compared to INR 606 crores of last quarter, it's only INR 42 crores write-back. So on this -- because of this, the profit is INR 605 crores, if I'm right. So some clarification on this that how did we, number one, arrive at this provision reversal? Which are the components of it? And tax credit in this quarter, at best the half year net to net is only about INR 560 crores. So for the going forward for the whole year, whether the scenario is going to be the same in the light of deferred tax assets of INR 5,235 crores? This is my first question.

Yes, sir. One is, see, we had done a provision in standard asset on one big corporate account, which we were expecting that it may have some issues going forward. So now that corporate account has slipped to NPA. So the provision...

What is the aggregate amount there? INR 2,000 crores?

Roughly, yes.

Roughly, yes. But minus GECL.

Roughly, yes. So what we have done, sir, that -- because it has gone into NPA, so provision from -- provision made for standard has had a write-back and we have made 100% provision on that account. So that is why because the NPA provision, I get a tax write-back. So last quarter is -- are breaking here. So because we had made provision on standard, so we have had to pay tax at INR 609 crores. Now that NPA provision has gone up to INR 1,929 crores, we have got a write-back of INR 43 crores. However, next quarter onwards, the standard provision may not be that high. The normal NPA provisions would be there. And based on that, whatever the tax outgo will be there, we'll have to make the provision.

Nice clarification, sir. So on that, another question arises, sir, that when we were discussing about this airline account, we were saying that we are secured by separate secured assets of about 60%, 65% of the total outstanding loan. So is that -- stands now also? I mean our recovery prospects are 65%, 70% on this account going forward?

See, I do not want to put any percentage of recovery. But yes, it is sufficiently collateralized account, and we have very bright chances if we proceed to recover from that asset.

Okay. I mean it's a long-drawn process or we can look it in this current financial year only?

Let us see because we have provided 100% in this account. Though it is substandard as per the books, we have provided full. So whatever comes, it will be added to my bottom line.

Okay, sir. Sir, coming to the second one is that fresh slippages are INR 2,544 crores versus in the last quarter of INR 1,062 crores. Is it our total slippage target, which has been given under that? Or it is -- because of that account, it has gone up?

Yes, yes. Because of single account, it has gone up. Otherwise, my slippage ratio is only 0.30%.

Okay, sir. Point well taken, sir, on this. Sir, some color on our digital journey. We have been talking in last 2 quarters very highly on bank within bank. And where have we reached? Because in the note to the account, we said that our digital banking units, DBUs, have also not started coming into the business. But of course, this is different. But what is the status today? I mean how much is the spend already done on this? What is our budget for the total overall digital journey? And when will it start generating fruits in the form of business?

You understand that this technology implement, first is your procurement and technologies starting -- you have your own processes to be completed. All these things are completed. Now separate workforce is assigned to that particular project. Probably from December onwards, low-hanging fruits, we will be reaping. That is the first benefit we will be getting in terms of end-to-end digital lending platform is concerned. And connected with that, in December itself, our collection management system, which is totally on the technology platform with the outsourcing activities of feet on street people for monitoring and also for recovery purposes, that will also be placed in December. This is first of 2 things. And it is 18 months, now it is 24 months. I think we have completed 13 months in that journey. And another 11 months are there. A lot of things now lined up, which will be coming for the implementation part where we can reap the benefits. Number two is regarding the budget. We have an IT budget of INR 1,400 crores for the entire activities, what we are taking up in the technology front. So sufficiently provided. Resources are not scarcity or resources are not at all a limiting factor. And it is only the process, which is going on and we will be reaping the benefits now.

Sir, at this stage, we welcome Mahendra Dohare as the Executive Director of the bank, and we congratulate you for having achieved this post and position. Sir, some color on the recovery going forward, sir? I believe you will be handing the recovery portfolio?

Our Mahendra ji has just joined 7, 8 days back. And after settling down just 2 days back, he is back in the office. And already, he has gone through these NCLT cases and DRT cases and then how best we can use the collection management system that will be placed in the month of -- in 1 to 1.5 months' period. So these are all road map, he has already prepared. And that, we'll be sharing. I think, in the next interaction, we will be having some more positive news on that front.

Sir, you can give some color on that recovery. This quarter was INR 513 crores, including ARC. And some color on the NARCL and going forward, how aggressive we are on the ARC sale and recovery through other mechanisms, sir?

Sir, as far as NARCL is concerned, whatever the assets we are taking, we have only [Foreign Language] less than INR 100 crores. And then we will be accelerating more on the ARC sale now. Whatever the assets that are suitable to the ARC to pick up, that we will be showcasing them, and then we'll be aggressively going for recovery in the next 5 months.

So means NARCL, the way we had originally thought, has not become so effective in getting our books clear, isn't it, sir?

No, no. Originally thought it will be effective, I don't say in that way. We know that any organization, which comes new in the market, will have its own hiccup. And I think our wish is there, now it will get stabilized and then they will ramp up their operations.

Sir, my last question is on note #14. Advances NF and -- I mean fund based and non-fund based outstanding secured by book debt, INR 25,735 crore versus INR 17,229 crore last year. What is the significance of this note, sir? I believe that -- I have not seen it earlier, maybe I might have missed. But why company has to -- auditor has to give the advances secured by book debt?

It is required, sir. And last time also, I think, we have given this since last 1 year.

Okay. I might have missed it. So it is -- so wherever the -- it is a combined limit of book debt and the stocks?

There also how much is the book debt portion.

Okay. In fact, I've missed this very important point maybe in other banks also. So our credit -- our advances against book debt, outstanding is INR 25,735 crore, is it?

Right.

We'll take the next question from the line of Sushil Choksey from Indus Equity Advisors.

Sir, congratulations to team Central Bank for excellent performance and stable numbers. Sir, it is very clearly [ assumed ] that our consolidation and corrective phase is over and now we are looking for credit growth, which you've already done well on the corporate side. Sir, any emerging picture on the retail segment?

Retail segment, sir, we continue to hold our baseline approach of 65-35 with plus or minus 5%. That will be our total credit book balance will be there. So whatever the growth that is required that, accordingly, that will be present for the retail side, agriculture side and MSME side.

No, sir, my -- I understand that proportion of 65-35, 60-40 you have stated in previous calls also. What I meant is, what kind of new initiative strategy we are doing? Because we have such a brilliant CASA number of 49.50% (sic) [ 49.40% ] on a constant basis, if I look at last 5, 7 years' numbers. So we have ability to muster much better numbers than where we stand because of the strength of Central Bank and the loyalty, which the customers have on the deposit franchises. Same needs to be capitalized. So I'm asking what kind of strategies have we drawn because of the technology initiatives we have taken?

See, one thing. As far as the retail part is concerned, on the technology front, what I was explaining earlier that digital lending platform, through that, this lending -- through digital means end to end, that will get operationalized once this platform is in place and already maximum work is done. And some of the products will be rolled out in the month of December. That is for the digital natives and also people who are adept on the technology front. Coming to my core, which is catering to the segments of my rural, semi-urban and urban, there, we will continue to focus on our traditional modes of marketing and also tapping the loyal customer base. The way we are increasing our portfolios in the retail, that will continue to be there. And aggressively, we will be eyeing between 22% to 22% (sic) [ 20% to 22% ] growth on the retail front. That is number one. Number two is on the co-lending portfolio where, again, maximum chunk is on the retail side only, whether it is the housing or with the MSME backed by the LAP. So in these 2 segments, also, we will continue to maintain our leadership position as far as the PSB environment is concerned. And there also, now we have touched almost INR 8,600 crores of portfolio. By March, we are eyeing to touch minimum of INR 15,000 crores. So this is broadly I'm giving you the retail growth strategy.

Sir, our CASA and our MCLR and the current offer on housing should be attracting a much faster number because we are almost the best in the market where our housing loan product is concerned. How are you seeing response specifically in the festive season and the scheme, which we have offered for [ women ] in the industry?

Yes, yes. That's a very good traction we are having. And it is only now what is the bandwidth we have to make it fast, that is the question. It is not that availability in the market and people approaching us. That bucket is too huge for me. Only managing at my end, that is the limiting factor, and we have put enough resources now. And the way we are envisaging 20% to 22% growth, that easily we'll be achieving.

Are you factoring a bigger pie from the housing loan market?

Yes, that is also there. This is the -- I think for the past one year, if you see the housing loan portfolio of above INR 1 crore, I think we will give you the details separately because right now I do not have. There is a larger increase, above INR 1 crore, of housing loans.

Sir, one of the concerns you flagged that the resources. I see that Central Bank is making a lot of initiatives or a lot of institutes in hiring new talent and -- to map our digital journey. Can you update something fresh about it, sir?

Yes. On the technology front, that's what I told you. Almost 65 people already joined in that separate unit, which is totally dedicated to the digital channels. And with that only, I'm saying with confidence by December, we will be rolling out certain products. It's going fine. Yes.

My last question in this round, sir, one is to Mr. Wahi on the treasury outlook because we have defended ourselves well. And second thing, how do you see our position on the marketplace where treasury is concerned by March '24?

See, Sushil, you are aware that as far as the U.S. is concerned, there are still -- the chances of increasing Fed rate is still increasing day by day. So maybe if not in December, we are hoping that there will be a hike of around 15 basis points to 25 basis. But all said and done, that is more or less discounted, and thereafter, we are hoping that there will be a pause. Similarly, in Indian context, because of various political reasons also, we do not foresee any further repo hikes. So there will be yield capping at around 7.50% level. And thereafter, reversal is bound to happen. And maybe March, we are hoping that it will be again in the range of 7% to 7.25%. That is what our inner research says and it's time to build duration actually. So we are also on the same path and little bit we are adding at our AFS as well as our other portfolios.

Right. If I understand well, we are well placed in the comfortable -- comfort with the volatility, which is prevailing?

For modified duration is -- of our AFS portfolio, our modified duration is still the same what it was in the month of June. March, it was little bit less. But that makes sense also. It is in the range of 1.60. So we don't foresee any major hit on there even if the yield is moving down to 7.50% level. That's all.

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

Anyway, my question on the treasury has already been answered. But I have some -- just a couple of questions and some explanation and clarification. Our operating income profit this time has gone down as compared to the last quarter, about INR 300 crores. And that is mainly because of the other operating expenses have gone up by INR 315 crore, from INR 807 crores to INR 1,122 crores. So what is the reason? I mean which are the components of these other operating expenses going up?

Ashok, the major [indiscernible] normal salary that is somewhere around INR 46 crores -- INR 46 crores to INR 50 crores [Foreign Language]. Then some rentals and other things [indiscernible]. We have increased the rent-free accommodation ceiling for the officers. So that is a major component of this INR 46 crores of rental increase. Then one is depreciation. With the various IT projects and other things going on, the depreciation increase is somewhere around INR 75 crores. And the other professional fees and all other expenses paid is around INR 47 crores. So these are the major components.

So why I'm asking this that is it going to be a regular feature now? I mean taking the other expenses more than INR 1,100 crores or INR 1,000 crores every quarter hereafter?

I think this INR 2,558 crores of other operating expenses for this quarter may not happen. In the next quarter, we may see somewhere -- figure somewhere around INR 2,400 crores types.

No, no. You mean that is including of the employee cost, isn't it?

Yes, yes, including employee cost.

I'm just asking only for other -- employee cost is under control, INR 1,490 crore. So in other, that increase of INR 300 crores, you explained about INR 150 crores of regular, which is going to be there now in future quarters. But remaining INR 150 is also going to be -- I mean, you feel that it is more than INR 1,000 crores, INR 1,100 crores every quarter going forward?

Yes. Roughly around INR 1,000 crores.

It will get stabilized around INR 1,000 crores.

Because staff cost is -- around INR 1,450 crores is the staff cost out of INR 2,558 crores. So roughly around INR 1,000 crores to INR 1,050 crores.

All right, sir. Sir, just a point of information, this note #16 on the fraud accounting. We have said that we have amended the FRM policy to give the opportunity to borrowers. So is it because that RBI instructions that before declaring an account as a fraud account, you must give the opportunity? That is what has been amended in this FRM policy or anything else?

Yes. Yes. Yes. As per the supreme court judgment, that part is amended in the policy.

All right. So sir, if time permits now, resolution plan, the 7 borrowers account, INR 3,501 crore is the exposure and outstanding is INR 1,875 crores. Can you give some color on that, on the recovery schedule? Or is it a recent resolution or whether the resolution conditions have been abided by the borrowers on these accounts?

Just a minute.

Which account, sir?

What is that note number?

Note number must be 16, 17 something. Resolution plan where 7 borrowers with a total sanction of INR 3,501 crores and outstanding of INR 1,875 crores.

We will come back because we are just searching out...

Note number 19, sir, actually.

Note number 19...

So what is the, I mean, present status on that? And how do we see this -- the conditions of the resolution being abided by the borrowers?

Whatever the recovery plan we have for the December and March, we have not taken anything from these resolution accounts for recovery except whatever the little that may come from the ILFS and then another [ stray ] account already which is there, they have distributed something in the previous months and we expect something. Other than that, in the resolution plan, for our recovery estimations, we have not taken anything.

Okay, sir. Sir, just one question, please, CFO, sir, for this segment-wise result. There is a major variation in the segment-wise. Is there any change in the method of calculating like the retail treasury, of course, from INR 1,072 crores to INR 624 crores in this quarter? But in retail, from INR 56 crores to INR 1,636 crores. And wholesale from the loss of INR 96 crores to loss of INR 1,533 crores. So why so much of variation in segment-wise breakup, sir?

Sir, wholesale major is because of the provision that we have made for that one big account. So that is why the entire wholesale has gone into loss.

That is okay, sir. In retail, from INR 56 crores to INR 1,636 crores profit?

Give me a second.

Separate segment, where the income has come down from INR 1,072 crores to INR 624 crores. Anyway, sir, I think it is taking...

[Foreign Language] wholesale because of that provision that we have made for the one account.

But how would it affect retail? Like retail profit has...

Yes, yes, we'll go into that, what is...

I'll give it to you, sir.

The next question is from the line of Sarvesh Mutha from Antique Stockbroking Ltd.

Congratulations on a good set of numbers.

I'm sorry to interrupt, sir. There is an airy disturbance from your line.

Just a second. Is it better now?

Yes, sir. Please continue.

Congratulations on a good set of numbers. I just wanted to ask on the credit quality cycle going ahead for the next 4 to 6 months. How do you see that panning out?

As far as the slippages are concerned, it is almost -- what we have given the guidance will be -- it will be below 1%. And this time, because of the corporate, that was -- spike is there. And then if you remove that, it is 0.32%. So going forward, our slippage ratio continues to be below 1% only. Most probably, we will be averaging it out around 0.85% to 1% in between. That is that. So having given the slippage figure, so you can very well back-calculate about the quality, what we will be maintaining on the asset side.

Okay. Okay. And on the ROA front, so 0.70%, you're saying it to be the base, right, you will exceed that...

Have to exceed, yes.

That should be the floor. And going ahead, the credit quality cycle should be a big lever for expansion in [ ROE ], right?

Yes, yes. Exactly.

The next question is from the line of Mohit from BOB Capital.

Just one question on credit cards. So many banks are focusing on credit cards and I see -- I think Central Bank is also doing the same. Wanted to understand a little more on the strategies that the bank has adopted.

See, as far as credit cards are concerned, you may be aware that this is the first bank in the Indian industry itself which brought the credit card in the market. But ultimately, because of certain issues, it was -- the entire division was closed in 2017. And then now we are having the fresh thinking on this cards business. And we have already zeroed in on 2 lines to proceed further. And it will be, I think, fructifying by December.

Okay. So basically you're saying that 2 cards would be launched by December?

Yes, yes. We'll be having the tie-up. Definitely, they are not the bank-backed company.

We'll take the next question from the line of Sushil Choksey from Indus Equity Advisors.

Sir, if I recall correctly, in one of the analyst meets, which we had, we had indicated that we hold substantial higher provisions where pension is concerned or any other future contingencies are concerned. Can you broadly speak about it, sir?

Sir, as far as this pension funds are concerned, we had a very detailed presentation from the 2 independent actuaries. And both have given almost a similar number with a plus/minus of INR 100 crores. So they -- what they have given is almost our fund is short of INR 4,800 crores in the kitty. So what we did for the past 7, 8 months, on monthly basis, we are providing INR 100 crores only to the terminal benefit. So that is adding up to the corpus. And the way we have planned out, in the next 2.5 to 3 years, that shortfall will be met. So that is how the road map is there to make that fund self-sufficient and self-yielding.

This, basically, you are saying by FY '26...

Yes. '25-'26, that will be totally a self-servicing fund.

Sir, other than that, we also have some buffer provisions, our future outlook on credit cost is also concerned?

Yes, that is separate. That is entirely separate. We would like to see that once we moved out of the PCA. At no point of time, we would -- we are not interested to look back as far as the profitability part is concerned. For that, we have our own buffer. Otherwise, the INR 2,000 crores corporate account moving into NPA in one quarter, our -- all the NPA, gross NPA, profitability should have affected adversely. But if you see the figures, it is well maintained. So we are not having much worries on this front and we are maintaining the buffer.

Looks like Central Bank is heading towards very positive outlook for years to come.

Yes, definitely, yes.

Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference over to Mr. Raju Barnawal from Antique Stockbroking Ltd. for closing comments. Over to you, sir.

Thank you, sir, for giving us opportunity to host this call. I'll hand it over to you for your closing remarks. Thank you, and over to you, sir.

Yes. Nothing much to say except thank you for all the participants for their time. And then I wish each one of you and your families a happy Navaratri. Thank you.

Thank you, members of the management. Ladies and gentlemen, on behalf of Antique Stockbroking Ltd., that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.