CSB Bank Limited (CSBBANK) Earnings Call Transcript & Summary

We will begin the 101st Annual General Meeting of the bank. I would like to inform you that the post of Chairman of the Board is lying vacant since the term of Mr. Madhavan Aravamuthan as Chairman had ended on June 28, 2022. As per Article 98B of the Articles of Association of the Bank, Chairman of the Board shall preside as a Chairman at the Annual General Meeting. And if there is no Chairman, Managing Director, CEO shall be entitled to act as Chairman. Now I request Managing Director and CEO Mr. Pralay Mondal to chair the meeting and to conduct the proceedings of the meeting. Thank you and over to you, sir.

Thank you, Sijo. And very good morning to everyone ladies and gents. I'm Pralay Mondal, Managing Director and CEO of CSB Bank Limited as the Chairman of this Annual General Meeting in terms of Article 98B of the Articles of Association of the bank. I'm attending the meeting from the bank's office at Andheri. A warm welcome to all of you to the 101st Annual General Meeting. This meeting is being held through video conference and other audiovisual means in accordance with the provisions of the Companies Act 2013 read with the applicable circulars issued by the Ministry of Corporate Affairs [indiscernible] extending [indiscernible] for holding the Annual General Meeting through VC or OAVM without the physical presence of the members at a common venue to transact the business as set out the notice of the meeting. This is the third year in a row that our AGM is completely being held in virtual mode. Our goal is to encourage maximum participation of members from various locations across and to provide hassle-free facility for our shareholders to vote and ask questions. The bank has taken the requisite steps to enable members to participate and vote on the items being considered at this AGM in terms of above-said circulars along with other provisions of the Companies Act 2013, SEBI and Listing Obligations and Disclosure Requirements SEBI, Regulations 2015 and the rules made thereunder. A live streaming of this meeting is also being webcasted on CDLS's website. Before we start the meeting and the proceedings, I request my colleagues on video conference to introduce themselves. Mr. Madhavan Menon, please.

Good morning, everyone. I am Madhavan Menon, Non–Executive Director of Bank. I'm attending this AGM from the bank's office at Andheri, Mumbai. I'm also the Chairman of Stakeholders’ Relationship Committee of the Board.

Thank you. Mr. Sumit Maheshwari?

Good morning, everyone. I'm Sumit Maheshwari, Non-Executive Director of the Bank. I'm attending this AGM from bank's office at Andheri, Mumbai.

Ms. Bhama Krishnamurthy?

Good morning, everybody. I am Ms. Bhama Krishnamurthy, Independent Director of the Bank. I'm attending the AGM from the bank's office at Andheri, Mumbai. I'm also the Chairperson of Nomination and Remuneration Committee of the Board.

Ms. Sharmila Abhay Karve?

Good morning, everybody. I'm Sharmila Abhay Karve. I'm attending this meeting from my residence in Pune. I'm also the Chairperson of the Audit Committee.

Mr. Sudhin Choksey, please?

Good morning, everyone. I'm Sudhin Choksey, Independent Director. I am attending the AGM from my residence at Ahmedabad.

Mr. Sunil Srivastav?

Good morning, everybody. I'm Sunil Srivastav. I'm an Independent Director of the Bank, and I'm attending the AGM from the bank's office in Andheri.

Mr. Sharad Kumar Saxena.

Good morning, everybody. I'm Sharad Kumar Saxena. I'm an Independent Director of the Bank. I'm attending this AGM from the bank's office in Andheri, Mumbai.

Thank you. I also request our Chief Financial Officer and Company Secretary on the video conference to introduce themselves.

Good morning, everyone. I am BK Divakara, CFO, attending from the head office of the bank in Thrissur.

Mr. Sijo Varghese?

Good morning, everyone. I am Sijo Varghese, Company Secretary. I'm joining this meeting from the head office of the bank in Thrissur.

Thank you, Sijo. Thank you, everybody, and thank you all. Apart from that, we also have the key executives of the bank joining this meeting through video conference from their respective locations. Mr. Vaibhav Shah and Mr. Ankur Kotriwal, senior partners of BSR & Co. LLP, Chartered Accountants, Mumbai, joint statutory central auditors of the bank is attending from Mumbai. Mr. Abhay V. Kamat, partner, Mukund M. Chitale & Company, Chartered Accountants, Mumbai, joint statutory central auditors of the Bank is attending from Mumbai. Mr. Vincent P.D., Managing Partner of M/s. SVJS & Associates, company secretaries, Kochi, the secretarial auditor of the bank is attending from Kochi. We have the requisite quorum present through video conference to conduct the proceedings of the meeting. Participation of members through video conference is being reckoned for the purpose of quorum as per the circulars issued by MCA and Section 103 of the Companies Act 2013. The quorum being present, I call this meeting to order. The bank has taken all feasible efforts under the current circumstances to enable members to participate through the video conference and vote at the AGM. I thank all the members, colleagues on the Board, auditors and the management team for joining this meeting over video conference. This being the AGM held through video conference and other audiovisual means, I request Mr. Sijo Varghese, Company Secretary, to take through certain instructions regarding the participation at this meeting. Over to you, Mr. Sijo Varghese.

Good morning, everyone. Members may note that this AGM is being held through video conferencing in accordance with the Company's Act 2013 and circulars issued by the Ministry of Corporate Affairs and SEBI. The facility of participation at the AGM through video conferencing or other audio/visual means is being made available for 1,000 members on a first-come and first-serve basis. All the members who have joined this meeting are by default placed on mute mode by the host to avoid any disturbances arising from background noise and to ensure smooth and seamless conduct of the meeting. The bank had provided the facility to cast the vote electronically on all resolutions set forth in the notice. Members who have not casted vote yet electronically and who are participating in this meeting, will have an opportunity to cast their votes during the meeting through electronic voting system provided by the CDSL, provided that they're not barred from doing so otherwise. Members can click on the vote tab on the video conference screen to avail this feature. Those shareholders who have cast their vote by remote e-voting prior to the AGM can also attend this AGM, but shall not be entitled to cast their votes again. Bank has received a request from a few members to register themselves as speakers at this meeting. Accordingly, the floor will be opened for the eligible members to ask questions or express their views. The moderator will facilitate this session once the Chairman opens the floor for question and answers. Members can also post their views on the question or the -- Ask a Q tab on the video conference screens before 11:00 AM. It may be noted that bank reserves the right to limit the number of members asking the question depending on availability of time at this AGM. Register of Directors and key managerial personnel, Register of contracts with the related party, bodies, corporates or firms or other entity et cetera, in which directors are interested, certificate from secretarial auditors of the bank certifying that the CSB Employees Stock Option Scheme 2019 are being implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, Statutory Auditors Report and Secretarial Audit Report have been made available electronically for inspection by the members during the AGM. Members seeking to inspect such documents can send their request to Board at csb.co.in. As the AGM is being held through video conference, the facility for appointment of proxies by the members is not allowed. Hence, there is a no proxy registered for inspection in respect of said meeting. Members are requested to refer to the instructions provided in the notice or appearing on the video conference page for seamless participation through video conference. In case, members face any difficulty, they may reach out on the helpline numbers. Thank you very much. Now it is the time for Chairman's speech. I request Mr. Pralay Mondal, Managing Director and CEO of the Bank, acting as Chairman of this AGM to address the shareholders.

Thank you, Sijo. And dear shareholders, on behalf of the Board of Directors of the Bank, I take immense pleasure in welcoming you all to the 101st Annual General Meeting of CSB Bank Limited. I am privileged to address you for the first time at the AGM of your beloved institution that has traversed through many years and different situation over the past 100 years and emerged as the #1 bank in the small bank category as per the surveys and analysis conducted by various leading journals/organizations in FY 2022. Now we aim to scale the bank to the mid-size category in the medium term and to emerge as a significant player in the industry in the long-term. The Annual Report for the financial year 2021- 2022 is already with you where our strategic pursuits and achievements during the year have been detailed. In the report, we have also given details on our ESG initiatives. This is an outcome of our unwavering commitment to governance along with prudent risk management practices. As in the previous years, your bank focused on corporate governance principles, maintained transparency in disclosures and zero level of non-compliance, for which adequate internal systems and controls, processes and procedures were laid down and implemented. This resulted compliance at all levels of governance. At CSB Bank, we had an excellent year during which the bank advanced on all key operational and financial parameters. This is indeed praiseworthy as the banking sector across the world has been going through some external challenges since the outbreak of the pandemic. Our performance during the year has been against a challenging environment both within the country and globally. Before I deliberate on the bank's performance, I would like to touch upon the economic and banking environment, in which bank performed during the year '21-'22. Indian economy has shown resilience in the face of multiple challenges posed by shocks such as the Global Financial Crisis, the COVID-19 pandemic and Russia-Ukraine conflict, which is still ongoing. India witnessed several policy measures, reforms and budgetary priorities, which created a conducive atmosphere for rapid growth. Industry has passed through a defining phase and adapted to the new normal. Digital technology has emerged as the key driver. Overall growth is coming back to the banking system as well now. We have started encashing the available opportunities whether it is retail, SME, mid-market or emerging enterprises. We continued with our geographic expansion mode with the opening of around 100 branches in FY '22. Let me summarize the major highlights of fiscal 2022. It has been a spectacular year for the bank as far as earnings is concerned and now we are continuously making profits for 3 consecutive years. Net profit in last FY more than doubled to INR 459 crores. Bank continued with the accelerated provisioning policy during FY '22 as well. The COVID related provisioning continues as a buffer despite easing of the situation. As on 31/3/22, your bank is holding additional provisions to the tune of INR 215 crores over and above the regulatory prescriptions. Our income increased from INR 2,175 crores in FY '21 to INR 2,285 crores in FY '22. Interest income during the year was at INR 2,038 crores as against INR 1872 crores in the previous year. Asset quality improved as the gross NPA percentage was at 2.68% as on 31/3/21 improved by 87 basis points to 1.81% as on 31/3/22. In absolute value, the gross NPAs amounted to INR 290 crores compared with INR 394 crores a year ago. Net NPAs also fell to below 1% which is 0.68%, 1.17% as on 31/3/21. Some of the other key highlights: Net interest income of the bank has crossed INR 1,000 crores mark for the first time in its history. At INR 1,153 crores, NII growth has been a robust 23% year-on-year. Non-interest income ex treasury profits grew from INR 201 crores to INR 235 crores or by 17% powered by growth in commission income from INR 50 crores to INR 72 crores or by 44% Total employees increased from 4,180 to 4,663 with no major impact on staff cost. Other OpEx has increased from INR 233 crores to INR 305 crores Y-o-Y or by 31%. Number of branches increased from 512 to 603 contributing to hike in other OpEx. Operating profits grew from INR 516 crores to INR 614 crores or by 19% on the back of improved NII and reduced staff cost. CD ratio net of the bank improved by 291 basis point, 78.34% from 75.43%. CASA ratio of the bank improved to 33.66% from 32.19%, up by 1.47% on a mix basis. Provision coverage ratio of the bank stood at 89.7%. If we reckon the COVID related provisioning for the computation of PCR, it will theoretically cross 100%. Yield on advances improved from 10.97% to 11.21%. Cost of deposits reduced from 5.07% to 4.31%, which is a whopping 76 basis points. NIM improved as a result from 4.81% to 5.27% Y-o-Y or by 46 basis points. RoA has increased from 0.99% to 1.91% Y-o-Y and RoE from 21.2% to 12.5%. Book value per share from INR 117 reached INR 144 or by 23% and EPS from INR 12.6 to INR 26.4 or by 110%. CRAR ratio of the bank is 25.9% against the regulatory requirement of 11.5%, which is probably one of the best in the industry. Cost to income ratio improved to 56.2% in FY '22 from 58.6% in FY '21. Coming to topline, total deposits of the bank grew by 5.5% on year-on-year basis while the advances grew by 9.5% to touch a level of INR 15,815 crores, which is in line with the industry. Bank has done well under all critical business and profitability parameters. While consolidating our performance we have strengthened our balance sheet on the backing of adequate provisions for known and unknown losses. Stepping into FY '23, I am delighted to inform you that we continue to exhibit our resilience and deliver performance. The FY '23 Q1 results are a testimony to it. Our capital adequacy ratio is one of the best in the industry at 25.46%. The Net NPA is at a historical low of 0.6% in the last quarter. The liquidity position is very, very comfortable. LCR is much above the RBI stipulation and stood at 147%. Earning is consistently growing and the profitability track record is maintained. Our primary objective of building the balance sheet for the future continues. On the CSR front, the bank had spent INR 84,00,000 towards CSR activities as per the mandatory guidelines and the funds were spent on core areas like promoting healthcare including preventive healthcare, COVID vaccination program, disaster management, setting up of homes for poor and promoting education. We at CSB are embarking on a journey of Sustain-Build-Scale 2030, that is what we call internally SBS 2030. Your bank aims to Sustain its strong foundation and critical strengths; Build the future highway through investments in technology, digital infrastructure, partnerships, leadership, products, processes et cetera; and eventually Scale your bank to the next level of growth and excellence with necessary guardrails in place. We will achieve this by implementing best-in-class technology, leveraging loyal partnerships, offering all products and services across our business and instilling customer-centric mindset among our employees to consistently meet customer expectations. Customer acquisition will be one of our key focus to scale the bank. I would like to repeat that SBS 2030 will run in the veins of every CSBians in this decade. The key enablers for SBS 2030 will be: good governance structure, clear executable strategy; Board support and guidance; growth oriented policy; building infrastructure, physical, hybrid and digital; robust and efficient customer-centric process; leadership with experience to build and scale franchise with long-term vision and commitment; and innovation agile/digital. This is going to be core of the bank by the end of this decade. The key objectives of the bank in the coming years will be to focus on customer acquisition, we need a lot more customers; growth in granular liability franchise with ever improving CASA ratio, and it has never been more important than the interest cycle we are going through right now; focus on strong operating performance and consistency; initial investments with defined payback period because every investment needs to have a payback period; well-capitalized bank with adequate liquidity buffer to manage economic and credit cycles; prudent treasury investment strategy vis-a-vis wholesale funded book growth with the right balance of risk versus return, and we need to be prudent here; well-diversified retail book to want -- manage cycles; relentless focus on fee business, noninterest income earnings; enhanced coverage creates segmentation and whitelist opportunities in wholesale business; and focus on asset quality risk management and strong collection framework. Our ongoing endeavor has been to generate value and honor the commitments made to the shareholders. Thus, last 3 years witnessed remarkable improvement, transformation and turnaround of the bank led by the successful execution of strategies into meaningful results. Thank you for your continued support and patronage. I take this opportunity to express my sincere thanks to our valued shareholders and customers for the faith bestowed on us and unstinted support extended throughout the journey. Without your support and confidence, the institution couldn't have survived over a century of its existence, which is a rare feat by itself. Personally as well on behalf of the Board of Directors, I hand my predecessors, Mr. C.V.R. Rajendran, who led the bank during the critical years of transformation. We are indebted to him for a remarkable turnaround and for putting the bank on a very, very strong foot. I wish to make special mention on the invaluable contribution of Mr. A. Madhavan for his guidance and support as a part-time chairman of the bank During his tenure till June 28, 2022. I wish to mention my gratitude to the regulators, Reserve Bank of India, SEBI, stock exchanges, central government and state governments for their guidance and support. I thank our senior management team for their execution capabilities and all the staff members for their committed hard work and determination, which helped us unlock this proud and satisfying period for the bank. While expressing my gratitude and respect for every employee, who risked their health and served the bank during the pandemic. I'd also like to extend my heartfelt condolences to the families of those staff members who lost their lives during the COVID-19 pandemic. The vision of the bank is to create strong and scalable retail and SME franchise. While we continue to grow our golden business, we are in process of setting up retail assets franchise with all the products, systems and processes in place. As we expand our presence in deeper geography, we'll enhance our offering in agri products to cater to the need of rural consumers. In parallel, we are building a strong CASA franchise through quality customer acquisition. NRI business, which contributes to around 23% of our liability franchise, is being further strengthened to enhance the franchise value. We'll build stronger risk management culture, credit underwriting processes, controls and use of score cards, credit bureaus, various technology enablements with separate credit and risk verticals for appropriate risk governance structure. We are building up knowledge based team in bank to translate the bank’s vision for next level of growth. As I said before, SBS 2030, very important to us. It encompasses the expansion of our branch networks across India, driving growth through existing and new verticals, enhancing business per branch and leveraging fixed costs through digitization and technology. We strive to deliver transformed experience to our customers and build a culture of design thinking and seamless execution embedded in our organization. On the liability side, our focus is to build granular retail book through seamless customer acquisition and onboarding process with a consistent user experience. We all know that for a consistent compounding growth story, building up our quality granular liability franchise is very important. And hence, we'll define segments, geographies and provide products, digital transformation, all channels of delivery, STP and all such other enablers to the customer. Our focus will be on executing our plans, monitoring them and ensuring we deliver to your expectation. We focus on making a long-term customer franchise by leveraging full service banking license of CSB. Thank you for your continued support and patronage, and we are [indiscernible]. The notice dated September [ 27 ], '22 on unveiling this meeting, the statement of profit and loss for the year ended March 31, 2022 and the balance sheet at that day together with the reports to the Board of Directors and the auditors thereon have been in your hands for quite some time. With your permission, I take the notice convening the meeting as read. I now request Mr. Sijo Varghese, Company Secretary, to provide us summary of the auditor's report. Over to you, Sijo.

Thank you, sir. The joint statutory auditors, BSR & Co. LLP, chartered accountants, Mumbai, and Mukund M. Chitale & Co., chartered accountants, Mumbai; and the secretarial auditors, SVJS & Associates, Kochi, have expressed unqualified opinion in their respective auditor's report for the financial year ended '21-'22. Hence, the same is not being read out at this meeting. There were no qualification, observation or adverse comment on financial statements and matters which have any material bearing on the functioning of the bank. The statutory auditor's report are made available on [ Page #3202 ] of the annual report. Secretarial auditor's report is enclosed as Annexure 4 to the Board's report on Page #148 of the annual report. Thank you and back to you, sir.

Thank you, Sijo. As the notice has already circulated to all the members, I take the notice convening the meeting as read. Before we proceed, I'm pleased to bring to your notice that as required under the Company's Act 2013, the bank had provided you all the facility to cast your vote electronically on the resolution set forth in the notice. Members who have cast their vote electronically but are participating in this meeting will have an opportunity to cast their vote through the e-voting system provided by CDSL. I repeat again. Members who have not cast their vote electronically but are participating in this meeting will have an opportunity to cast their votes for the e-voting system provided by CDSL. Members, please note that there is no voting by show of hands. We will now proceed to deal with the various businesses of the meeting in their orders as set out in the notice of the meeting. We'll open the floor for any questions by the speaker shareholders after the resolutions are taken. Item #1, adoption of audited financial statements. The audited financial statements for the year ended March 31, 2022, including the audited balance sheet and profit and loss account as at that day, together with the reports of the Board of Directors and auditors, have already been provided to the members. Item #2, reappointment of retiring director, Sumit Maheshwari, DIN# 06920646. I invite the attention to the members to item #2 for the notice. Fixation -- item #3, fixation of remuneration of joint statutory auditors. I invite the attention of the members to item #3 of the notice and the explanatory statement on the item. Special business, item #4, approve the appointment of Ms. Bhama Krishnamurthy, DIN# 02196-AS39, as the part-time Chairperson of the bank and the terms of appointment. Please note that the bank is awaiting approval of Reserve Bank of India for the appointment of Ms. Bhama Krishnamurthy as the part-time Chairman of the Bank and the terms of her appointment as mentioned in the notice. The appointment shall be effective from the date of reapproval. I invite the attention of the members to item #4 of the notice and the explanatory statement on the item. The next item in the notice is item #5, which deals with approval of my appointment as the Interim Managing Director and CEO of the bank for the period April 1, '22 till September 30, '22, or till the appointment of a regular Managing Director and CEO of the bank, whichever is earlier. Since I'm deemed to be an interest in the item, with your permission, I request Ms. Bhama Krishnamurthy, the seniormost Independent Director of the bank, to decide the transactions for this item in terms of Article 98B of the Articles of Association of the bank.

Thank you, Mr. Pralay Mondal. With your permission, [ I am setting the ] next item in the order set out in the notice of the meeting. Item #5, approve the appointment of Mr. Pralay Mondal, DIN 00-117994, Deputy Managing Director, Interim Managing Director and CEO of the bank for the period from April 1, 2022 till September 30, 2022, or until the appointment of a regular Managing Director and CEO of the bank whichever is earlier. Please note that the tenure of appointment of Mr. Pralay Mondal as Interim Managing Director and CEO of the bank ended on September 15, 2022, simultaneously with his elevation and appointment as Managing Director and CEO with effect from the said date on receipt of approval from Reserve Bank of India on their letter dated September 15, 2022. The bank has not recommended any specific remuneration for the position of Interim Managing Director and CEO. And the fixed pay for the position of Interim Managing Directors and CEO remains the same as that of Deputy Managing Director, which is approved by RBI as per their letter dated September 15, 2022, is INR 1.25 crore per annum. I invite the attention for item #5 of the notice and the explanatory statement on item. Since item #5 is presented, I request Mr. Pralay Mondal to continue the preside over the rest of the meeting. Thank you and back to you, Mr. Pralay Mondal.

Thank you, Madam Bhama Krishnamurthy. The page of the resolutions along with explanatory statements is provided in the notice circulated to the members. If any member desires to ask any questions pertaining to any item in the notice, he or she may do now. Now I take questions from the speaker shareholders and invite the speakers who have registered. To avoid repetition, the answers to all the questions will be provided towards the end. Members may also note that the bank reserves the right to limit the number of members asking questions depending on the availability of time. Members are requested to keep the questions brief and specific. The Company Secretary will now announce the names of the shareholders who have registered as speaker shareholder one by one. Over to you, Sijo.

Thank you, sir. Dear shareholders. Thank you for joining our 101st AGM today and for taking time to participate in it. Before we go live with the question-and-answer session, here are some points to note for your convenience. Name of the speaking shareholders will be announced in turn. The speaker shareholder will be thereafter unmuted by the host. To start speaking shareholders are requested to click on the video on button at the center of your screen. Those shareholders who are unable to join through video for any reason can speak through audio mode. Please mention your name for your number and the location from where you are joining. Each shareholder will have 3 minutes for their questions. To avoid repetition, bank will respond to all the question at the end. Once you have asked your question, you can log off and continue to watch the proceedings. In case there is any connectivity problem at speaking shareholder's end, the next shareholder will be asked to join. If connectivity improves, the speaker shareholder will be called again to speak. Once the other shareholder who have registered to complete their turn. If a member face any technical issue, you may contact the helpline number mentioned in the notice of the AGM. We will proceed -- we will respond to as many questions as possible during the meeting. If we are not able to address any questions during this meeting, we plan to post the questions and answers on our website after the meeting. We also plan to post a recording of this meeting on to website -- bank's website at www.csb.co.in after this meeting. Members may please note that this meeting is being recorded. Please do not disclose any sensitive personal information or personal-identifying information belong to you or any other person that has no bearing on this meeting. Members, kindly note that bank has requested 7 shareholders to speak at this AGM, and name of the speaking shareholders will be announced in turn.

So now we are calling this shareholders actually speak. First person is Mr. Nalin Shah. He's representing NVS Brokerage Private Limited. The company is holding 6,680 shares in the bank. Now we request Mr. Nalin Shah to kindly proceed with your question.

Good morning, everybody. Am I audible?

Yes, sir. You are.

Yes. Good morning to everyone in CSB. At the outset, let me congratulate Mr. Pralay Mondal for being appointed as the regular Managing Director of the company, and we are very confident that it is well ahead, this bank should I think grow for time to time. At the outset, I also congratulate the bank management for posting excellent performance for the year ended 31 March 2022. However, I would like to have some broad [indiscernible] questions on the [indiscernible]. In terms of the performance of the bank, that one that in spite of such a beautiful performance, the shareholders' value has been considerably eroded from the level of almost around INR [ 372 ] per share, which was I think the share price came down to almost INR 178, dropping below even the IPO price of INR 195. So I think during the last 3 years, since the bank got listed. The shareholders, I think the return on investment has been considerably, I would say, poor because of, I mean, extraneous factors. But still, what we understand also as a stock broker, where I'm calling from Nariman Point, Bombay. So what we understand is that the bank is still perceived to be that majority exposure in terms of growth is on the gold loans. And there is no overall growth in the bank that is perseverance the market. So I'd like to just ask the management that what is the -- what are the steps we are taking to elevate that, I think, either do misgivings or whatever you may say. But the fact remains that even today also as against INR 195 today the market price is only INR 250, which means the share is appreciated by only INR 20 in last about 3 years period. So this is my first question that what are the steps we are taking to address this situation. Secondly, what is the kind of growth we are expecting on -- what is this, of course, good but at the same time, other than Board, which can, I think boost the real view, I would say, the value and stakeholders' value in the market? Because if I see the last year, EPS has already come to around INR 26 per share. Even if I were to give a very, very I would say that minimum kind of a multiple of about, say, 15 or 20 to this bank, our share price could have been anywhere between, I would say, INR 375 to INR 500. But that is not the case. We are valued much lower. So that is one question which I will find. Secondly, are we now -- because last year, we did not declare dividend because of certain provisions of the law, et cetera, what you already mentioned in the annual report. So I just want to ask whether current year, are we now becoming eligible to declare dividend or we are still not eligible for declaring dividend? My third question is that -- we would like to know that since you know our bank is in the very able hands of Mr. Prem Watsa and his group, almost 50% plus, what are the provisions of the RBI now applicable to us where? The bank will have to dilute the promoters' equity from 50% level to what level? And what are the value-added provisions of the RBI in terms of this dilution, which will give us some idea about not in value in the banks? So with these questions, I would once again congratulate the management for excellent performance. What I find is that our Q1 performance was a little down. If I consider the provisions plus already back [indiscernible] in the books. So last year Q1, we had 1 60 -- I mean 60 plus 104 provisions, which would have become INR 165 crore profit. Current year, if I see that INR 150 crore plus INR 16 crore provision, it gives us about INR 130 crores kind of a debt. So from INR 165 crore, it's down to say [ 60 ] INR 130 crores in spite of the top line growing, I mean, at a good level. So with this, I once again congratulate the management for excellent performance for time to time. Thank you very much.

Thank you, Nalin, for your question. We have noted your points, and we'll answer that at the end of the session. Now we will...

Thank you.

Now we will move to the next speaker, Mr. [ Gaurav Liladhar Rozatkar ], is holding 1 share in the bank. So we request Mr. -- we have a question from. So Mr. Gaurav, again proceed with your question actually. I think he has not joined. So now we will move to the next speaker. So next speaker is Ms. Abhishek. Abhishek is holding 2 shares of the bank. So Mr. Abhishek can just go ahead and take your question. Abhishek, please proceed. Abhishek, please go ahead.

Am I audible?

Yes. Yes, audible.

[Foreign Language].

Abhishek, you're audible.

[Foreign Language] Can you hear me, sir? Am I audible?

Yes. Yes, Abhishek.

Can you hear me, sir? Am I audible?

Yes. Yes, Abhishek. You're audible.

[Foreign Language] Hello? Just a second, sir. Can you hear me sir? Am I audible now?

Yes, Abhishek. Please go ahead.

On the eve of the 101st Annual General Body Meeting I trust all is well with you and your family. In this challenging situation the company deserves much more respect than the current market cap after completing more than a decade of successful operations, profitability, dividend history and become one of the strongest brands [indiscernible]. First of all, I congratulate the management on the eve of 101st Annual General Body Meeting [indiscernible].

Abhishek, you're not audible right now, so can you just check the connectivity.

It is audible, sir?

Now it's much better, yes.

Hello? Hello? Hello?

Yes. Yes, Abhishek, please go ahead.

Yes. Just a second, sir. I trust all is well with you and your family in this challenging situation. Our company deserves much more respect than the current market cap after completing a decade of successful operations, profitability and becoming one of the strongest brand. I would request our management to kindly take part in con call, marketing presentations and meeting with global...

Abhishek, some connectivity issue there, Abhishek. Not audible right now.

[indiscernible] return on equity, but we can see the momentum is very low. So whatever company is doing new activity, if you can regularly publish the things on the BSE website, it will be really helpful for the investor fraternity, the volatility in the market will increase and the share price will go up. Under such circumstances, I will request the management to kindly take some active steps for the help of the investor fraternity so that the shareholders can get benefited. So then regarding the NPA, how much of NPA that the bank has right now and how much have newly [ NPA ] has been generated during the pandemic time. What proactive steps have we taken to recover the amount, I would like to know from you, sir? And how much of outstanding our bank has right now? Because if you can elaborate, it would be helpful for us, sir. And as of date how many branches our company has? How many ATMs do our bank has, I would like to know from you, sir? And what are the steps being taken by the management [indiscernible] other expenses, legal and professional taxes and the audit fees. Myself and my team run a legal firm [indiscernible] and I would request your good selves to [indiscernible] firm in the benefit of the company and we will be glad to extend our services, sir. So please kindly do put me through the concerned team so that I can share my credentials with them and it can be evaluated. [indiscernible] platform where we exercise our e-voting, when we get access to Annual General Body Meeting as well, you're supposed to update the instructions of the [indiscernible] if any. Unfortunately it is not updated, sir. So I would request your good selves to kindly update the same for the [indiscernible]. And nothing much to ask, sir. I thank the company secretary and their entire team for sending me the link well in advance and making this Annual General Meeting -- 101st Annual General Body Meeting a grand success. Kindly give us an appointment to meet you and greet you, sir, whenever we turn up in Kerala because for the last year also we wanted to -- the 100th year, I guess, we've prepared a memento and a [ shawl ] for you but I could not turn up to Kerala, sir, so kindly give me an appointment in the month November or December so that we can meet you and greet you, sir. Nothing much to ask, sir. I thank the company secretary and their entire team. I wish the company and the Board of Directors a great success and prosperity in the coming future. Also sir 1 more shareholder -- 2 more shareholders, AV Manisundaram and P. Jaichand who are also the speaker shareholders for this particular event, kindly allow [indiscernible]. Just a second, sir. Now next speaker AV Manisundaram will join sir.

We will call your turn, Abhishek, actually.

Good morning, everybody. I am [indiscernible] shareholder of CSB Bank. My DP number is [ IL301667452 ] [indiscernible]

Manisundaram, you're not audible actually. Just check the connectivity. So...

Hello, sir? Hello, sir?

Much better.

Sir?

Yes. Yes, yes, we can hear you.

So this is a good time. We have video conference [indiscernible] 101 Annual General Body Meeting. Very happy to attend the meeting by video conference. Last year, not able to attend the meeting because COVID has affected throughout India. It is a good time 100th year to declare some bonus shares and special dividend. We are happy to [indiscernible] as shareholders who have invested in CSB bank. Also is good -- this year we have good annual report, sir. You have done very excellent. And also please reduce previous [indiscernible] about expenses. Very happy to attend the meeting and next year we will meet in physical meeting, sir. Also, one more shareholder Mr. P. Jaichand is joining in the same [ line ]. Please allow, sir. Thank you. Thanks a lot, sir. See you next year, sir. Thank you.

Thank you. So now we'll move to the next speaker, Mr. P. Jaichand. So now we will move to the next speaker shareholder, Mr. P. Jaichand. So Mr. Jaichand is holding 2 shares of the bank. We request you to kindly unmute and go ahead with your question. I think he's not joined us for this meeting. So now we'll move to the next speaker, Mr. P. Gopal. Mr. Gopal is holding 1 share of the bank. We request Mr. Gopal to kindly unmute and go ahead with your question. So I think he's also not joined. So we will move to the next speaker, Mr. [ Bharath Vyas ]. Mr. [ Bharath ] is holding 1 share of the bank. We request you to kindly unmute and go ahead with your question. I think he has some connectivity issue, not joined yet actually. Thank you all. With this, we conclude the question-and-answer session from all the shareholders. Now I hand over back to the Chairman for conclusion. Thank you, sir, and over to you, sir.

Thank you, Sijo. Thank you all. We received all the questions, and I should now respond to the questions. Though there are some challenge in understanding some of the questions, but whatever we could understand, we will try and respond to that. The questions related to the operations of the bank, I'll respond. Those questions related to audited financial statements of the bank. Mr. Divakara will respond, and questions related to the resolutions proposed Mr. Sijo Varghese, our Company Secretary, will respond. So let me try and respond to the first question, Mr. Nalin Shah. Compliments the bank. Thank you for your compliments. But yes, the share price and the market value, we are actually looking at a very long-term kind of a journey because, as you know, the compounding growth and the compounding valuation of the bank depends on consistent and long-term performance with a larger franchise base. So we at our bank with the guidance of Board and with the focus of management, we are trying to build the bank exactly in the manner which you suggested that while we will -- and that's part of our SBS 2030 strategy that we will sustain what we have done well so far, businesses like gold, some of the liability businesses, some of the geographies, some of the NRI business and so on and so forth. So we will continue to do well there. However, the main focus of the bank will be also to use the full-service franchise and the full banking license to make it a full-grown universal bank. And creation of value will only happen when we have all products, services and creating a franchise where customers will bank, and we'll get larger share of wallet with the customers. And that will happen with quality customer acquisition, better technology, better processes and, of course, building our SME and the wholesale franchise over a period of time. So we are fully committed to that, and the entire team is working towards that. And we hope that if we continue to have a sustainable results as we are performing, the markets will recognize our efforts and [ build long-term value ]. On the growth of the businesses, yes, we have 40% -- a little more than 40% of our mix is in gold loan. We have done very well. We are proud of what we've achieved in gold loan, and we'll continue to sustain that. Having said that, most of the other businesses we are planning to launch one by one. So retail, as you know, takes time because it requires launching products, distribution processes, systems, lot of technology, digitalization and partnerships. In my opening address, I talked about some of these things. So without repeating them, all I'm telling is that it takes 12 to 18 months to build this product franchise. And in parallel, we are getting the customer franchise to the liability flow-through through our branches and through other partnerships and distribution. And I want to assure you that your bank is completely focused on building a much more scaled, growth-oriented franchise based on these products and services. We'll also have products which we will do it through partnerships. Like we are going to launch credit [indiscernible]. We are doing, for example, third-party product businesses like insurance, and we have grown significantly over the last year. We are looking at partnerships. We are already doing partnerships on home loans. And we are also looking at some of the other partnerships for demat, broking and some of the other businesses through some of the market leaders as of today. So not everything we are manufacturing in-house. We will do some and we will have some partnerships, and we will [indiscernible] customer franchise. Similarly on SME and wholesale, we are looking at driving the transaction banking, supply chain vendor finance, a lot of things which we are doing, and we will create it through proper credit governance so that we don't make [ mistakes ]. On your other question on the dividend, I think you had question on dividend. In terms of Section 123 (1) of the Companies Act 2013, no company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year and inadequacy of profits available for dividend after the mandatory appropriations to the reserves. Since there is no adequate profit after several appropriations to these results, no dividend has been recommended for FY '21-'22. Coming to the last question on dilution of promoter equity. RBI has mandated FIH Mauritius to dilute from the current levels to below 15% in 15 years from 2018, which is around 2033, okay? So FIH Mauritius will follow the mandate or any changes to that as prescribed by RBI from time to time. Coming to the next -- thank you for your question, Mr. Nalin, and I hope that we could respond to your questions. We could not get Mr. Gaurav on the line for some connection-related issues. Mr. Abhishek who joined us, there was a lot of disturbance, but I'm trying to pick up some of the points which he probably was trying to ask. One is on ROE. First of all, I must say that we are one of the rare banks who has CRR above 25% and ROEs above 18% as of now. This is a very rare achievement. Obviously, the management is focused on ensuring that we utilize our capital even more efficiently and grow the ROE as we expand and diversify our businesses. As you know, gold loan does not need much capital, but it does for other businesses, SME, retail and other businesses. We will use the capital, and hopefully we should be able to sustain our ROE. Can we publish ROE? Of course, we publish at the end of every quarter results, and that we continue to do. And that is what is allowed both by SEBI as well as regulators. On the NPA, I think I've already covered in my address in the beginning that our NPA has not significantly -- gross is below 1%, net is below 1%. Long-term while we don't give guidance, but our objective is to ensure that we keep it below 2% and below 1% in terms of gross and net. Our gold NPA, we had some slippages last year in the beginning, first 2 quarters, and then we ended the year on a negative credit cost. The first quarter also was sort of flattish to negative. But obviously, as you know, the slippages will happen, and we cannot have a negative credit cost. So we will have a credit cost, which is in our [indiscernible] generally have found. Regarding some of the NPA, what steps, what actions or correction we've taken, we have a separate department, ARD, which focuses on recovery. And we have some old portfolio which is mostly provisioned as well. So we are looking at some of those portfolio. We have a very small restructured portfolio, which is not a concern. And from a recovery perspective, we have a full focus on our old -- because being an old bank, we also have older portfolio. And hence, we have some opportunities there to cover the portfolio which we are fully focused on. On other expenses and management, I can tell you that we have taken significant cost-cutting initiatives, efficiency, employee productivity, revenue per employee, all those parameters we track on an ongoing basis. We are doing hard rent negotiation during the pandemic. We went back to the landlords that said that if you do not reduce the rents, we will move out. So we got some -- our entire premises department did a great job on that along with the CFO team. We are also trying to ensure that expenses on electricity, paper, stationary have brought down has anyway good governance from our CSR -- from an ESG perspective. The online meetings, which we're in right now, and e-learnings also helps us in cost reduction and reducing carbon footprint. Digital enablements like AOS, centralized operation, DMS, compliant redressal mechanism, [indiscernible] are some of the initiatives which we are looking at. And as we're talking, we are working towards bringing a lot of documentation, et cetera, and old documents centralized so that the branches can effectively get more productive, which will reduce costs, create efficiency, and hopefully improve our -- overall results of the bank. So Mr. Abhishek, I hope that I could respond to some of your questions. Coming to the next speaker, it was shown as Mr. Abhishek, there would be some to that, I don't know. I'll get the same question on dividend and cost and expenses, which I just addressed in the previous question. So I hope that satisfies the question that you asked. Mr. Gunjan could not join, and Mr. Gopal could not join and Mr. Bharath actually joined. So I think there is some challenge on the network. But broadly, I think these are some of the questions which we got today. And overall, I think we could reply to the queries of most of the speakers. And with that, I hand it over to Company Secretary, Mr. Sijo Varghese.

Sir, I think all the questions were answered. With this, I will hand over back to the Chairman. Thank you, sir, and back to you, sir.

Thank you. Thank you, Sijo. Members may note that they're working on the CDSL platform. We continue to be available for the next 30 minutes. And therefore, I request members who have not cast their vote yet to do so within the next 30 minutes. The Board has appointed Mr. P. D. Vincent, Practicing Company Secretary, Managing Partners, SVJS & Associates, Company Secretaries Kochi as the scrutinizer to supervise the e-voting. Further that, results of the voting shall be declared and placed on the website of the bank within the prescribed time and in the manner as prescribed in the notice. The voting results, along with the report of scrutinizer, will be intimated to the stock exchange and will be uploaded on the website of the bank and on the website of CDSL. The resolutions as set forth in the notice shall be deemed to have been passed today, subject to receipt of a requisite number of votes. We had 70 participants in today's 101st Annual General Meeting. Now that all the items of the notice of the meeting have been discussed and taken up for e-voting, I hereby declare the proceedings as closed, pending declaration of the results of the e-voting options. On behalf of the Board of directors, I thank stakeholders -- I thank all the stakeholders who are attending the meeting and for their kind cooperation and assistance extended for the smooth conduct of the meeting. I'm also taking on record that the prescribed number of members which were constituting a quorum was present throughout the meeting. Thank you very much.

Concluding this meeting. So with this, we'll conclude this meeting.

Thank you very much.

Thank you.

Thank you.