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

Ladies and gentlemen, good day, and welcome to the Central Bank of India Q4 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Raju Barnawal from Antique Stock Broking. Thank you, and over to you, sir.

Thank you, Suraj. Good afternoon, everyone, and thank you for joining Post Results Conference Call of Central Bank of India. From the management side today, we have with us Shri. M.V. Rao, MD and CEO; Shri. Vivek Wahi, Executive Director; Shri. M.V. Murali Krishna, Executive Director; Shri. Mahendra Dohare, Executive Director; and CFO, Shri. Mukul Dandige. Now without any further delay, I hand over the call to the MD sir, for his opening remarks, post which we will open the floor for the Q&A. Thank you, and over to you, sir.

Yes. Thank you, Raju, and very good afternoon to all of you. And we are very happy to share with you that now we have recorded the highest ever net profit of INR 2,549 crores. And just I will give the performance highlights. Later, my CFO will give you the details. Now as far as the highlights are concerned, our total business have grown by 10.34% to INR 6.36 lakh crores. Earlier, it was INR 5.77 lakh crores. Total deposits now at INR 3.85 lakh crores, that is a growth of 7.16% from the previous year. And let me tell you that in our total deposits, our certificate of deposits is 0. And CASA deposits, we have 50.02%, one of the best CASA ratios we are maintaining. And the gross advances has grown by 15.60%, now it stands at INR 2.51 lakh crores. Credit deposit ratio, now it has improved to 65.59%, in the previous March, it was 60.86%. Gross NPA has improved. In the previous year, it was 8.44%, now it is at 4.5%. Net NPA, which was 1.77%, now it has come down to 1.23%. And the provision coverage ratio is improved, now is at 93.58%. And net interest income has grown by 10.34%. Net interest margin now is at 3.40%. In the previous year, it was 3.47%. Return on assets has improved to 0.76%, return on equity has improved to 2.92% on quarter-to-quarter and for FY it is 9.53% and CRAR is improved to 15.08%. So this is the highlight of our financial results and details just our CFO, Mr. Mukul Dandige will explain you. Thank you.

Thank you, sir. So the total interest income has grown by 20.28% to INR 30,722 crores. The total interest expenses have grown to INR 17,826 crores at 28.66% because of the lag effect of the rate transmission. The net interest income is at INR 12,896 crores, a growth of 10.34%. And the total income growth has been at 19.60%, and the total income stood at INR 35,434 crores. The total expenditure has increased to INR 28,071 crores, a growth of 23.43%. The operating profit showed an improvement of 6.96% and the operating profit was at INR 7,363 crores. If we take away the provisions of 4,814% (sic) INR 4,814 crores, which is a dip of 9.20% over the last year, the net profit has surged by 61.13% to INR 2,549 crores, which is the highest in the history of the bank. The fee-based income and total other noninterest income has improved on a Y-o-Y basis, if we see, it has improved to INR 4,711 crores from INR 4,084 crores, an improvement of 15.35%. And the interest expenses have increased by 28.66% overall. Interest paid on deposits, there is an increase of 26.29% to INR 16,908 crores. The operating expenses have increased by 15.28% to INR 10,245 crores, out of which the staff cost increase is 12.63% because of the wage revision and other terminal dues payable. And the other operating expenses have increased to INR 3,933 crores, an increase of 19.80%. The provision's part, the provision on NPA reduced to INR 3,391 crores, a reduction of close to 4%. The income tax liability has gone up from INR 1,063 crores to INR 1,504 crores, an improvement of 41.49%. Thus the total provisions have dipped by 9.20% to INR 4,814 crores compared to INR 5,302 crores in the last financial year. The gross and net NPA, as sir has said, has improved. Gross NPA has improved from 8.44% to 4.50% and net NPA has improved from 1.77% to 1.23% in the current financial year. The net NPA, if we see, sector-wise, we are now comparable with almost all the other public sector banks, we are in line. The provision coverage ratio has improved to 93.58% and the slippage ratio on a quarter-on-quarter basis has come down to 0.57% in March '24 quarter. The credit cost also has come down to 0.85% in the March '24 quarter. The total restructured book and special mention accounts, we have given details on our Slides 21 and 22. The total restructured book stands at INR 6,455 crores and the total special mention accounts, including all up to INR 5 crores and above INR 5 crores accounts, stand at INR 15,919 crores, 6.32% of our total advance book. The capital adequacy ratio has improved from 14.12% in March '23 to 15.08% and the leverage ratio has also improved from 4.73% to 5.13% during this financial year. Business details, already MD sir has informed you that business has -- how the business growth has happened. I would like to touch upon the treasury performance also. The overall income -- I mean, the aggregate investment has increased from INR 1,42,653 crores to INR 1,49,538 crores. The interest on investment has improved from INR 8,715 crores to INR 9,510 crores, and the yield has improved from 6.26% to 6.57%. The yield, including the trading profit has improved to 6.91%, an improvement of 50 bps. And despite all this, we have been able to contain the M duration and the P.V.01 of our portfolio. These all were the major highlights of the performance for this current financial year. Now...

No, adding to this, just let me highlight you some of the initiatives, what we have taken during the year gone by. Number one is, we have established our integrated customer care, that is a one-stop solution for all the grievance handling and also for outward -- outbound marketing, for both the things we have established, it is a state-of-art technology we have employed there, with all recent technology -- what you call that? GenAI. Those tools were deployed. So for the past 1.5 months, it is working fine, and it is stabilized. And going forward, that integrated customer care service will be utilized fully. Next initiative what we have rolled out is the collection management system with the integration with our war room for the recovery. That collection management system works with our outsourced vendors where the Feet-On-Street people are also employed. That is the second initiative. Third is our Cent Neo, what we explained in our earlier briefing that our technology platform with a lot of investment that we started. Now products are being rolled out within 15 days, some 4 products we're rolling out through our Cent Neo that is the transformation of our digital platforms. And then omnichannel, that is on the mobile that is also slated for rolling out in the month of July. So these are all the new initiatives what we have taken. And earlier initiative of co-lending, that part, we will continue to focus with much more thrust this year because this time, we have reached a total outstanding figure of INR 11,000 crores. We have tie-ups with 27 NBFCs. And in this financial year, we have a target of having tie-ups with the 50 NBFCs to reach the portfolio of INR 25,000 crores. These are all the new initiative parts. Thank you, and it is open for our analysts or whosoever logged in for any questions. Yes, thank you.

[Operator Instructions] Our first question is from the line of Ashok Ajmera from Ajcon Global.

Sir, my compliments to you, sir, for yet another quarter, and the whole year of the very good results of the bank.

Thank you.

Sir, having said that, now, sir, going forward, now since the Central Bank has now again have almost reached to or reaching to its past glories, how do we see the coming year now going forward? Are we still going to be a little conservative in our targets and estimates? Or we want to open up? And a bank of our size where a lot of scope is there to grow rapidly as compared to other -- some of the other large peer banks. So I want to hear, sir, about your plans or your ideas for the next whole year for the bank, sir? Where are we heading, sir?

Okay. Yes, Ajmera-saab, thank you. Let me give you the big picture so that you can work out the details. We would like to grow the business at the rate of 12% to 14%, okay? And in that, CD ratio, we want to improve it from 65% to 70%. That will be 70% to 72%, is our band for the next March '25. So once we are ramping up our CD ratio, definitely, our credit book is also going to grow. And at the same time, now there is a slight shift to what we would like to make in our credit book balancing is we were sticking to the RAM and the corporate at 65% and 35%, with plus or minus 5%. Now slightly, we are revising that our RAM will be around 63% and corporate will be at 37%, with plus or minus 1%. This is how we are working out this time. That is a slight shift will be there from the RAM to corporate, 2 percentage basis points will be shifted to the corporate side from the retail.

Sir, now where do we see the ROA, which has come up to now 0.76% this quarter? And with this kind of mix increasing RAM 63% and corporate 37%...?

Yes, our target for ROA is 1% for the March '25.

Great, sir. That will be very good. Now coming to sir this, you also said that the NBFC and participating with them and increasing the -- but the way the RBI is going little tough on the existing financial sector, especially on the NBFCs and -- how do you see going forward, don't you see that there will be some pressure even on the NBFCs also and on the bank on the -- as a whole, also for this entire RAM category and especially in the areas of personal loans and retail loans? Don't you see that there will be some pressure on that? Or the margins might also come a little bit down because of that?

Number one is what RBI is doing. There is no comment from our side, he's the regulator. Number two is, as far as our approach in the co-lending with the NBFCs, it is as a business model, we have adopted this. And wherever weak links that were there in our traditional structure is being complemented by the strength, what NBFCs were having. So with that concept, we have moved and it is working well. And going ahead also, we don't foresee any type of issues in our co-lending model because there 80/20 is there and our shortcomings or some gaps in the collection and monitoring mechanism is taken care by the NBFCs. These 2 things are working well for us. And we don't foresee any problem for the coming period.

Sir, my last question in this round is on our recovery front, covering all the areas of the recovery from NCLT, NARCL, selling to the ARC's and also the recovery from the written-off account. So how optimistic you are? And where do we stand as far as the now '24, '25 is concerned, sir?

This current financial year, we are able to -- just our GM Recovery will be sharing with you the details.

Yes, sir. Please, sir. Mr. Dohare?

No, no, our GM...

I'm sorry. I'm sorry. I'm sorry. Not Executive Director, he is the GM. Yes, yes, please.

In the current financial year, sir, we are aiming to have cash recovery of INR 4,000 crores, approximately 10 to 15 accounts are due for settlement in NCLT, amount is INR 2,500 crores, out of which INR 1,000 crores will be cash recovery. Last year, we assigned 5 accounts to NARCL. And this year also, we have received a request, and we are assigning 6 accounts to NARCL, and amount is INR 500 crores. And we are taking...

INR 500 crores of assets?

Yes, yes.

Yes. What is the average realization we expect?

Average realization from NARCL is 30% to 40%.

Okay. Of which 85% is SRs and 15% is cash payment?

Yes. Correct, correct.

Okay, sir. So overall recovery target?

We'll be reaching our gross NPA target, which we have envisaged, 3.67%. Definitely, we'll be achieving it.

Okay. And sir...

Besides this, Ajmera sir, we have a sizable pool of written-off accounts. So this year also, I mean, we have been able to recover close to INR 1,433 crores out of those written-off accounts. We intend to further step up recovery efforts in this written-off accounts and maybe in the range of INR 1,500 crores to INR 1,800 crores, if we are able to recover in the next financial year. That is going to give us some boost in our operating income because that will go directly into P&L.

Straight to bottom line.

Yes, sir.

Sir, any color on that recovery of -- on that aviation account? Are we selling the collaterals and realizing something out of the INR 1,700 crores, INR 1,800 crores, which we are -- no, of course, that is not a written-off account, but what is the recovery...

In our book, we have provided 100% for that, number one. And number two is now we are taking all the actions which are required. And as far as the land parcel which is there, already we have published the public notice under SARFAESI, and we are proceeding on that.

The next question is from the line of Piran Engineer from CLSA.

Congrats on the good quarter. I just wanted to understand what is our NIM expectation for next year? And what will be our driver for ROA improvement from 0.63% to 1%?

See, the NIM, we were at 3.40% as far as this financial year is concerned. For March quarter, we were at 3.58%. So we expect that we will be above 3% as far as the NIM is concerned. Secondly, you are saying ROA, 1% drivers. Right? So if you see my net profit surged by almost 61% from INR 1,582 crores to INR 2,549 crores this year. So we expect that this would continue further, because the ROA will have assets thing also. So if we are able to recover more from the written-off assets and other fee-based income, the -- I mean, that can support our operating profit. So in that case, the ROA will be definitely where we intend to reach in the range of 1%.

Okay. Sir, what I understand, our NIM might be lower next year, but our credit costs will also be lower?

Right.

Yes, NIM will not come down drastically. What we would like to tell is in the earlier calls also, we used to tell that, we will be above 3%. That is sacrosanct for us. And whatever the upside that comes, we will always be striving hard on that.

The next question is from the line of Manish Suvarna from Moneycontrol.

Firstly, congratulations on your results. I just wanted to understand how much slippages you got in this quarter, and this is from which segment?

See the total slippages during this current quarter were at INR 1,175 crores. Yes, INR 1,175 crores, right? And the slippages happened -- the slippages majorly were in MSME, around INR 292 crores, agriculture INR 200 crores.

MSME, how much? INR 290 crores?

INR 292 crores. Yes. Retail, around INR 134 crores. And corporate, there was one account, around INR 170 crores from corporate. So there is no one particular sector which is a cause of concern.

Which is the -- which one is that one account of the corporate?

Specific we will not give...

No, no, small account, not a larger account in a corporate in the range of INR 50 crores to INR 100 crores. Not a very big account has been slippage in this quarter.

Okay. So sir, basically, the majority of the slippages have come from MSME, retail and the corporate segment and rest is from the rest of the...

Agriculture is around INR 200 crores.

Pardon sir, I didn't get you.

Hello?

Hello?

Yes, yes.

Sir, I couldn't be able to hear you. Can you come once again?

Now the sector basically, agriculture around INR 200 crores, agriculture -- MSME around INR 292 crores, retail INR 135 crores and around INR 170 crores for the corporate and others.

Okay, okay. And my second question is on the cost of funds. It has gone up by 76 basis points on a yearly basis, that's what I can see in your investor presentation. So what are the projections for the FY '25 considering the geopolitical tensions?

Yes. Now you see the repo rates increased -- started increasing from the month of May '22. So our yield on advances started increasing immediately because the repo-based rates are all considered almost 51%, 52% of our total advances. However, the deposit rates, we increased the deposit rates from December '22 month. So in March '23, if we see there was only a 3-month impact. Now the full impact has already happened. So we do not expect any substantial increase in the cost of deposits and cost of funds going forward. If you see our yield on advances has also started to improve further, and it stands at 8.91% now.

Correct. So it will remain at the same level, that's what can I expect?

I mean, there will not be any disproportionate increase in the cost of deposits vis-a-vis the yield on advances.

Okay, okay. Once again, congratulation on your results.

Thank you.

[Operator Instructions] Our next question is from the line of Franklin Moraes from Equentis Wealth Advisory.

Sir, you mentioned ROA target of 1%. But in the presentation, I see your ROA target is 0.75% to 0.85%. So where exactly is the discrepancy?

One has to be revised. Okay. See, our target is to reach 1%. And I think in the last slide, which is uploaded that range they have given, I think that will get corrected now.

Okay. Okay. So this needs to be revised?

Yes.

Okay. Okay. And sir, secondly, presently we are at 0.6% and we are targeting to reach 1%. We are already -- our NIM is already higher at 3.4% vis-a-vis our guidance where we are expecting NIM to be above 3%. So where is the improvement going to come from?

See even though the financial year wise, our ROA might be 0.6%, but for the current quarter it is 0.76%. So naturally, you must have seen my profitability, it has already had a consistency. So going by the past year's projections, the same consistency is expected this financial year also. So we'll start within our ROA of 0.76% from this quarter. So going forward, by March '25, we'll be able to touch 1%. And NIM also, if you see, we are saying we'll be above 3%. But as MD sir has said, we intend that -- I mean, we don't expect any sizable reduction in the NIM in the current financial year also.

Okay. Okay. And sir, lastly, like presently, we have this government stake at 93%. But we need to bring it down to 75%. So -- and there are other public sector banks who have also done or being able to reduce it. So what is our glide path and time line in terms of bringing down the stake?

Sir, for this, already, we have engaged with the government. So we are seeking for the OFS part. Once the government clears that, then this OFS part will come into play. That may be a single reduction or maybe in tranches, that will give us the room further. Once we unlock our value, then we will be going for our QIP or any other sort of raising the equity.

Sir, but any bifurcation in terms of your plans in terms of will it largely be OFS? Or will this largely be a QIP? How exactly are we going to reach this? And what -- how much time are we likely to take to reduce -- to reach to 75%? Any indication will also help.

No. Actually, this is the call to be taken by the government. But our request is always there, whether if they are going to offload it through OFS, what will be the percentage that we will be coming to know in the next 2 months. Then we will plan accordingly then how much percentage that will be offloaded through OFS and what is that we have to takeup through the QIP. So that combination we will work out only after 2 months.

The next question is from the line of Anil Pandey from The FrontPage.

Congratulations, Mr. Rao, for 473 bps growth in LDR which is credit deposit ratio.

Thank you.

What I observed that in numerator, we filed 15.6% growth and the denominator, that is deposits, we filed 7.16% growth. Now as you know that this CASA is speaking in general in all the banks. So will we still consider further scaling down the wealth deposits or you are forming some other strategy to increase the deposits to maintain this 65.59% LDR or further increase to 75% or something?

See, as far as the CD ratio is concerned, that's what the guidance we have given, we will be targeting for 70% to 72%, 7-0 to 7-2, okay. So -- and with this background, the whatever combination of our deposits we have that we would like to maintain our CASA ratio minimum 50%. Coming to the term deposits, or the bulk or the high costs, we do not have any high cost deposits nor we raise any certificate of deposit from the market. It is a pure core deposit what we maintain. So as far as the term deposits are concerned, this CD ratio -- for maintaining the CD ratio, where we have to reach that is worked out now with the 50% of CASA.

Very helpful, sir. Very good. Next question is regarding the corporate credit, you have mentioned INR 84,619 crores with a 69% growth ahead. So can you give the components so how much is infra out of that and particularly this power sector government is focusing on this renewal energy and solar power. I do not find a bifurcation of those sectors in corporate commentary.

Yes, yes in the presentation, it is not there. Yes, we will send you off-line because now -- right now, it is not available readily.

The next question is from the line of Kartik Solanki from Elara Securities.

I had couple of questions from my end. So the first one is can I get the overall written-off pool amount? And what would be the component of NCLT and the non-NCLT bifurcation for the same?

Total written-off pool is close to INR 35,000 crores right now.

Okay. And NCLT, non-NCLT?

NCLT accounts constitute 215 accounts, INR 26,191 crores.

Okay, sir. And sir, the second question is on the line of the interest income from recovery of NPA accounts, which forms a part of your interest income.

Right. So this year, it has been at INR 1,433 crores, as I already told. The recovery from written-off accounts. It constituted INR 1,433 crores. So if I want to quantify it in terms of percentage, it is close to 4% of my written-off accounts that we have been able to recover during this financial year.

I meant the recovery of NPA, what would be the component of interest income, which you recorded in NII?

No, no, no what he wants to say is suppose if we have been able to recover more than we would -- that way to take out the data. But this is pure recovery INR 1,433 crores is recovery out of my written-off accounts. You want to know the total interest income booked from the NPA accounts?

Yes, yes, yes.

Yes. That we will provide you off-line, sir.

Okay, okay, so I'll take that off-line.

Kartik Solanki, right?

Yes, yes, yes.

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

Sir, my -- the first question is the second round is on the total overall treasury operations, sir. The treasury income in this quarter has been very good at 600 -- if you look at the segment-wise results, INR 611.75 crores as against INR 396.73 crores. So I would like to know the total structure of; number one, AFS book, modified duration of AFS and what are we expecting, I mean, the RBI to a little bit lower down the rates in the coming quarters? So what kind of treasury profits or the treasury income we are looking at?

No, we have already -- good to know treasury income is -- you have seen from the, this one, it is INR 965 crores book. It's mainly we capitalized on the equity book, we invested in many of the IPOs and made good profit from the IPOs. And also on the bond side also we made good profit. And accordingly, we could able to record a good profit of INR 965 crores. And we maintain an M duration of 1.88% as of March '24 on AFS portfolio. And coming to my AFS book, it is INR 41,733 crores was the AFS book as on 31st March.

And with a modified duration of 1.88%, isn't it?

At 1.88%, yes. We have been maintaining below 2% all through, at least since 31st March, so we are below that, and it is 1.88%.

Okay, sir. Point well taken, sir. Sir, my second question is on the -- now when are we going for the new tax regime, like we have a deferred tax asset of INR 4,294 crores. So what are the planning for going to -- for the new tax regime, maybe in '25, '26?

So Ajmera-ji [Foreign Language] around INR 1,500 crores, we were able to reduce the DTA for this financial year. So going as per our expectation, we should be able to switch to the new tax regime by '26, '27, okay?

'26, '27, yes, 2 more years for this INR 4,294 crores DTA. All right, sir. My next is, sir, is on Note #17, sir, that 8 borrowers. At the time of implementation of the resolution plan, it was INR 3,723 crores and now it has come down to INR 1,978 crores, 7.56%. So this is -- as per the resolution plan, when this 8 borrowers account overall amount is to be received or regularized?

These will have different resolution plans. There may be some -- where purely there will be a -- I mean, regulation of the account will be there. In some cases, there may be a restructuring which will be warranted. In some of the accounts, maybe the recall maybe the alternative. So Ajmera-ji, for all these 8 accounts, details can be provided to you, what is the RP in each of the accounts.

Yes, please. And whether post implementation of the resolution plan, can we also go for OTS with some of these accounts?

Surely, it's any such accounts where recall is marked, and these are already empty. And if the party comes out with an OTS offer, which is acceptable to the bank, we can go in for OTS.

Yes, because nowadays that trend is going on, so maybe. So please provide me that. My last question is just a little bit on this Note #18.2, buying of the standard asset, acquiring the standard assets. So here of course the number of accounts are many, 95,000 small accounts. But if you look at the coverage of the tangible securities, it is going down from 100% in '22 to 87% in March '23 to 51% in March '24. So is it because of the nature of accounts which we are acquiring, where we don't need higher tangible security?

These are all related to co-lending book, sir. There what is happening is, primarily, if there are any MSME accounts, the primary security itself would be more than 100% and the additional collateral security is 50%. Because in retail, as you know, sir, mostly it will be housing loans where the security will be at least 110%, 125% of the book size.

So you mean to say that this coverage of tangible security doesn't include primary security?

Yes, yes, right, sir.

Our next follow-up question is from the line of Manish Suvarna from Moneycontrol.

So in the last question, you mentioned that from the -- of the total treasury gains of INR 965 crores, you have got some gains from your investment in the IPOs. So can you tell me the figure that how much, means, profit you got from that IPO out of total INR 965 crores?

One second, IPO will be around INR 50 crores, INR 52 crores, exact figure I'll tell you. But overall, from the equity book now, we got around INR 125 crores.

INR 125 crores from the equity book. And from the IPOs?

Equity -- it is trading and IPO both, from IPOs it will be around INR 50 crores to INR 55 crores.

INR 50 crores to INR 55 crores, IPO?

Yes.

Okay. And can you name the companies in which IPOs you have subscribed?

See, you are aware IPOs...

But it was -- predominantly it was Tata and other MSME thing.

Lot of MSME.

Lot of MSME.

Tata Tech we got the bigger chunk.

TATA and a lot of...?

TATA Technologies.

Okay, TATA Technologies. And a lot MSMEs?

MSME, yes.

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

Congratulations to team Central Bank for a superb result and a very positive guidance. Sir, my first question starts with, I would like to know more about our transformation journey whether it's Neo or digital-led initiatives, which would transform the bank from where we are. Because across peers or any comparable banks our CASA and our advances, we can transform the bank into a superior margin bank? So these initiatives will lead to us where and what kind of expenditure we will incur on the first question?

This is Ratan Kumar here. GM IT, Digital, who is leading the transformation department, digital transformation department. A year back, we have started our digital journey, our digital transformation in our bank, and we have initiated various projects, so starting with the tech upgradation and API middle layer formation and so many other activities. Along with that, we have also taken up 4 major projects, which is -- one is a super app there is an omnichannel. The second is a digital lending platform. Third is integrated customer care. And the fourth is digital collection management system. So these 4 major projects are going to drive our digital transformation journey. We have already rolled out 2 major projects which are live now. One is the integrated customer care. The second is the collection management system. They are live now. They are -- we have started the operations. The collections management is operating from Bombay and Kolkata. And integrated customer care, we have done from Mumbai and Hyderabad. So very shortly, around 6 journeys, we are -- digital journeys in lending, we have -- we are initiated. That is going to come in the another 2, 3 -- in another week. And the super app on CUG, we are going to launch somewhere in July.

What about the digital expenditure and what other initiatives are we taking along with it? So this is only about customer and call center and back office where digital driving, where credit -- because our customer touch points, what Central Bank enjoys for last 5, 10 years because of CASA, how are we mapping them on a digital trend?

We are -- see, for digital transformation, actually, the...

One thing, see, this is the technology part what we are doing. As far as your specific ask is for the mapping of our CASA customers already we are doing because we have 2 more modules which we're maybe in a 2 or 2.5 months' time rolling out. One is for the wealth management. That's where we have segmented our customers on different profiles. That is one thing. Another is the insure tech, what we are adopting. So as a one-stop shop from the mobile and internet banking, these services will be offered. This is the technology enablers what we are creating. And as far as to garner the actual business for liability customers, the liability products that we are having, how to reach out them through the relationship functions. And then on the asset side, we are working out for the bigger corporates, the end-to-end digitalization of their operations so that the entire ecosystem in which they operate will be captured so that our business will also grow. And for the corporates also, there is an ease of doing the transactions in the bank. This is the overall part where we are working now.

Let's assume that the first part of the journey and the second leg starts well, can our retail products, whether it's housing loan, car loan, education loans, MSME loans, be a total part of our digital transformation?

Yes, yes. Definitely, yes. These are going to be part of our digital journeys. We are creating both digital as well as assisted journeys with a very smooth flow. So this will definitely going to be very beneficial and customer convenience is addressed there.

Sir, if I'm not mistaken, I've heard in the past Q&A that we have created some kind of a strength of technology, product drivers as well as designers within our own capabilities and domain within the bank. Can you elaborate something whereby we can boast about our own performance led by our own team?

See we have created a special department, very focused department for this, which we fondly call it as Cent Neo. Under this, we have inducted both the functional and technocrats into that department. We have inducted around 60 people, fresh hands for this from the market. And we are going to further recruit some more specialized skills for this. So this is going to be -- and we are creating kind of garages for each project, which is running on sprints to get whatever we wanted to design and deliver.

This digital transformation, can it be connected to our co-lending business, which we have aspiration to be INR 25,000 crore book?

Yes, the co-lending, the first leg, that is the lending LOS part, we have already done it. And probably in another 15 days, it will go live. We are automating the co-lending LOS part.

Sir, what is the outlook on our housing loan book as our CASA enables us to be the most aggressive bank in the housing market? Currently, it stands at INR 44,057 crores. How do we see over a period of next 1 or 2 years?

See in housing loan, we will -- normally, we have grown at the level of 15%. And we -- at least this level we want to maintain. NPA stress is very low. And as you rightly said, we get a lot of good cross-selling through our housing loan products, and we have very competitive housing loan product for our female borrowers, which has also gained a lot of good traction in last 2 years. So we want to continue to grow at least 15% to 20% in housing loans.

Now our digital enablers, we essentially target higher ticket size loans once we enable this into the digital journeys. We expect there would be more of a frontage for marketing and garnering high-end ticket sized loan. So that will definitely get a bigger chunk of the housing loan portfolio.

My next question is to Mr. Wahi. Sir, as usual, I would like to hear your outlook on the money market and the G-sec.

See, G-sec, as you know, based upon certain rebound in recovery of U.S. So the rate cut scenario has little bit shifted towards the end of the year. Rather, there is also a view that this year, there may not be a rate cut. So that is the reason that the yields are still hovering at around 7.20% levels. So we also feel that with the -- I think, a little bit of more economic activity if dampened in U.S., then rate cut can happen anywhere near September. As far as Indian context is concerned, definitely, rate cut is not going to happen before September or even it may happen in November. So bond market -- with this global index of bond market also Euro bond market also getting tuned in, we expect around $20 billion coming into India. So with this, yields can soften a bit. But ultimately, the real softening will happen only when the stance of the Central Bank changes and the rate cut happens in the later part of the year. That is the only way.

Sir, based on money market and the current situation where RBI stance is concerned, do you see MCLR further going up or it will remain stable at this current level?

No, sir, MCLR rates are already peaked up. I do not see any rise in the lending rates as well as repo rate, or as well as the lending rates of banks, even retail banking rates also, I do not foresee any rise at all at this juncture.

As there are no further questions from the participants, I would now like to hand the conference over to Mr. Raju Barnawal for closing comments.

Thank you, MD sir, for giving the opportunity to host the call. Over to you, sir, for your closing remarks.

Yes, sir. Thank you. Thank you for all the participants for taking out the time and attending to our -- this conference. And going forward, whatever the guidance what we have given that bank will be reaching to the targets. And let me assure you and also tell you with confidence that our bank will be reaching the new heights in this financial year. That is '24, '25. Thank you.

Thank you. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us. You may now disconnect your lines.