DCB Bank Limited (DCBBANK) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. We sincerely thank you for spending time out of your busy schedule, and of course, quality family time. And we also thank your families for sharing the stress of you reaching home a little late today. Thank you so much. And meeting investors and analysts have always been part of our endeavor. We are in process of fine-tuning this process. And please note, this is a journey, not a project. We'll keep improving. We'll keep improvising. And we get valuable insight from each one of you, and sometimes to our surprise and delight, we realize that you know our numbers as good as we know and sometimes better than what we know if it relates to hair-splitting. We meet and discuss with analysts and investors. We meet analysts who are bullish about us. We also meet those analysts who are not so bullish about us. We meet and discuss with those who are invested in us. We also meet those who have left us. And people who have invested their money and have paired their fortune with us would -- must have dived deep and taken note of our past, present and must have discounted our futures also. We appreciate that. In many ways, this great community of analysts and investors have shown us mirror on many occasions, and it keeps helping us. And 2-way feedback help us to build a bank which is consistent, predictable and sustainable. And broad contours of this program will be as follows: presentation by CFO, Mr. Ravi Kumar, followed by a presentation by MD and CEO, Mr. Praveen Kutty, highlighting important landmarks and important pitstops and question and answers. And after Q&A, we'll proceed for our dinner, and we request your participation in Q&A. A well-worked questions and answers thereon benefit not only the concerned person or persons, but analyst and investor community in general. It also help us, DCB management, to discover some of the facets of financial landscape, which may not have come across or which may not have thought through. We would like to inform you that our senior management team is here. You can interact with them during the dinner and discuss different aspects of the bank. They are actually the people who run the bank on shop floor. A brief introduction of our senior management team, not in any specific order, will shortly appear on the digital wall. Idea is to introduce those people to them. Vikas, can you run this? Sorry, it is coming with a lag. I think I'm pressing a little faster. These are our senior management. They will keep interacting with you after this is over. Now, I request Ravi to join with his presentation. Thank you.

I'll prefer to be here. Am I audible?

Yes.

Thank you, Ajit. My absolute pleasure to be welcoming you all for this first ever investor meet of our bank. And I'm sure the entire management team is -- also joins me in welcoming you all for this meeting today. I want to start by saying that you are a very important stakeholder for us in this journey under the leadership of Praveen in our next growth phase. We interact with some of you more frequently than others. And we take your feedback and inputs seriously and take actions wherever it's possible to do so. Since Praveen took over about 6 quarters ago, he embraced the philosophy of this bank in terms of its core DNA and what we stand for. But he also made a few changes. He also made a few changes, which we believe that will take us into the next -- or propel us into the next phase of growth. I would like to call this phase as readying for takeoff. What I'm going to do in the next 20 minutes is take you through the financial impact of some of the changes that the bank has ushered in over the last 6 quarters on some of the critical financial ratios. Now that the engines are rolling, the seatbelts are buckled in, seatbelts -- seats are up right, the trade tables are tugged in, we are now on full throttle for a takeoff. What I'm going to also do is to give some context and background. I've picked up about 12 ratios, which I'm going to talk about today to drive home the point of how this change has impacted or what is the impact on the financials of the changes that we have done in the last 6 quarters. And these are critical ratios cutting across growth, product quality, portfolio quality, profitability and return ratios. But to give you a context and a comparative benchmark, I looked at our own history. We have 15 years under Murali and now with Praveen. And we looked at 15 years to say which period in this 15 years journey, we were consistently -- or as a bank, we attracted a good price to book value. Why am I doing that is because with all the quantitative and qualitative inputs that we have, eventually, it boils down to the value that is there in the market. And you guys understand this better than I do. So we looked at what is the best phase for us. And then I looked at what these 12 ratios that I'm going to talk to you about today in that particular period, which I'm going to call it as a reference period, right? So that will give you one comparison of current ratios versus the reference period for the bank where there was a value that is a decent price to book. The second comparison I'm going to give you is across the industry with other banks. So for the purpose, I looked at private sector banks, which are of our size or thereabouts. I'm not going to call them peer banks because there's a difference of views on who's peer, who's not depending on when or in which context we are talking. But I would want to call them as comparable banks. And these are banks which are less than INR 3,00,000 crore balance sheet size. So that's the second reference point. The third reference point, obviously, is the quarter-on-quarter movement of these ratios on the 6 quarters that we had, right? So this is the 15 years period where we looked at our price to book. And if you notice the yellow pillars in that histogram, this is a phase when from Q4 of FY '16-'17 to just before COVID, Q3 of '19-'20, we were above 1.5 price to book every quarter on a consistent basis. So 12 quarters where it was in that range. You will see that around this, there are other quarters where also the P/B -- price to book went up and down. But I was looking at consistency, right? And of course, there was a peak of 252, but the 12 quarters is where, as I said, is our reference period for today's comparison. And what are the 12 ratios that we're going to talk about today? So we're obviously going to talk about growth, both in advances and deposits, very normal thing to do. We're going to talk about the yields on advances, cost of deposit. We're going to talk about portfolio quality in terms of gross NPA and credit cost. Of course, NIM also is a derivative there. We're going to talk about cost to average assets. And we look at operating leverage, and how I define operating leverage is the rate of growth of operating income to rate of growth of operating expense. So every 1 basis point of operating expense, what is the corresponding growth in operating income? And, of course, the favorite ROA and the ROEs. And for sake of completion, I have price to book here, but I would refrain from talking about it. That's for you to talk, okay? But it's an important item, and we got it there. So let's look at the -- in the reference period, I don't know if you can see the pointer there, but this is a simple average of growth of advances in that reference period of 12 quarters, right? Please remember this because when we go to the next slides, you will see what -- how this pans out, right? Growth in deposits, we've been growing 20.5% in the reference period. Our yields were at 11.46%. Our cost of deposit in that 12 quarters was 6.63%. And some of these may be from a -- you may want to say that, listen, the environment was different then, the repo rates must have been different, but I get all of that, but this is just a comparison in that sense. The NIM was 3.94%. Gross NPAs were at 1.87%, sub-2%, in that reference period. Our credit cost was 50 basis points. We were clocking in a cost of average assets of 2.72% and an operating leverage of close to 1.6% with an ROA of 0.96% and an ROE of 11.3%. I don't have to really work hard on remembering this because I have these numbers again repeated in the subsequent slides. How did we fare in the last 6 quarters in these 12 ratios, right? And as I said, for every number, I'll give you a 3-way comparison, except for yields -- yield on advances because I personally don't believe that I have a relative comparative bank, which has a 94% secured book and a granular book as we have. So it's a very different and difficult comparison. What you'll compare is the NIMs because ultimately, it boils down to NIM. So for yield and cost of deposit, I may not have the bank comparison, but for NIM, I definitely would have. Right. Let's look at growth on advances over the -- so as you just said, in the reference period, we grew 21.17%. And the last 6 quarters, we've been growing at -- the last 24.73% in Q4, 18.90% in Q1 of last year. But where I want you to draw your attention to is the yellow band at the bottom. I hope people in the back can see the entire numbers. Are the numbers visible in the back? Yes. All right. I think there's a screen on your both right and left as well, just in case, right? So if you look at the yellow band and randomly look at any of this, right, there's a good 4% to 10% delta between the averages of these 10 banks versus DCB Bank. And the delta is in our favor. We grew at a much higher rate than these 10 banks put together. And the average for the 6 quarters is about 21%, which compares favorably with the average in the reference period of 21.17%. Growth in deposits. Again, a similar story unfolds here. If you look at the comparison with other banks, the so-called comparable banks and look at the delta, it is somewhere between 6% to 10%. And this is coming with -- in a very difficult phase, at least in the last 4 quarters. Deposit has been a struggle. We have achieved a growth rate of close to 19%, 20% without altering the structure of our deposits and reducing the cost of deposits in the last 2 quarters, which you'll see in the subsequent slides. So it's been a lot of hard work from our branch banking team. And you see the reflection. The market has grown at -- for example, in the last quarter, the 10 banks put together grew at 13.2%, whereas we grew close to 19%. Right. Let's look at how the yield on advances have panned out. In the reference period, as I said, I'm not going to give you the comparison here of the other 10 banks, the comparable banks. But what is good to see is how we were in that reference period. We were at 11.46%, right? And you look at the histogram of the remaining -- the new -- the last 6 quarters, they're more or less around the same range, right? If in fact, the last 2 quarters, there was a repo cut in February, started from there, the series of repo cuts, 100 basis points of repo cut. And how much did we shed? I mean, we were at 11.54% in Q4. We're at 11.11% in Q2. This is coming in the backdrop of 100 basis point cuts in repo rate. You would have heard our MD say in multiple earnings calls that this bank will not chase high-yielding assets just to enhance yields. That's not our DNA. That's not what we stand for. And you'll hear from Praveen in his presentation on how the bank will move forward on these matters. But what will happen is the yield enhancement will come through a very, very hard steps of product mix change, right? We speak about changing the mix from HL to LAP. So that's something that we will continue to do. This is my favorite slide. I really love this story, and my branch banking team knows this. Cost of deposits for us to grow deposits in a very, very tough environment with a growth delta of close to 10% against the average comparable banks is no sort of a miracle. And to do that by reducing cost is a fantastic achievement. The last 2 quarters, our cost has gone from 7.28% to 6.96%, and you all know this. We are a heavily term deposit sourcing -- I mean, our deposit side of a mix contains a lot of term deposits, and the repricing benefit will continue to flow over the next 3 to 4 quarters. So in the reference period, we were at 6.63%. We are at 6.96% in the last quarter. And how the remaining quarters will unfold, I would request you to wait until Praveen has a say on it. Okay. On the net interest margins, the comparables are back. If you've noticed, the yellow band is back. So we were at 3.94% in the reference period, and we are at 3.23% now, right? And we have said that the Q2 has bottomed out, and we expect a NIM uptick from here onwards, primarily because we expect the repricing benefit on cost of deposit to flow through, but that's not the only reason why there will be a NIM uptick. I also want you to focus on comparables with other banks. And you see across the band, across the quarters, there is a delta between us and the average, which is not in our favor. And I want you to register that in your mind, and I'll talk to you about this when I get to the credit cost slide, okay? Gross NPAs, in the reference period, we were sub-2, and we are at 2.91%, which by straight looking, you might see there's a big task ahead of us. What I want you to look at is the trajectory from 3.33%, 3.29%, 3.11%, 2.99%, 2.98% and 2.91%. Six quarters consistently, some action has happened and gross NPAs are -- the trajectory of the -- of this is in our favor. Having said that that's not what we aspire for. There's an aspiration, and that's been spoken about. And if you look at our earnings call, there is a commentary on what our aspiration is and where we want to be. But it's quite interesting if I move to the next slide. And before I do there, not only between the comparable reference period and now, but also with reference to the comparable banks, we have a delta which is not in our favor. So please register that. And -- but look at this slide. It's quite fascinating to me that while our gross NPAs are slightly higher than anybody else, our credit costs are much, much lower than anybody else. What it does tell you that we are a high slippage, high recovery bank, largely because of our segment that we operate in. And that's something that the management is working on. It's not that we are happy with it. ECL kicks in, we'll have an issue with some of these slippages, and we have started our work right now. But look at the delta of comparable banks in Q4, against the 1.08% with 36 bps against 1.20% in Q3 of all the 10 banks put together, we are at 38 basis points. Even the 59 basis points here had a one-time 21 basis points provision for microfinance, right? If you knock off the 1 -- the 21 basis points, even in this quarter, Q1 of this year, it was 38 basis points as a BAU credit cost, right? So there's a high GNPA in the previous slide. There's a delta which is not in our favor, but there's a huge delta here, which is in our favor. Cost to average assets, there's a lot of times you have asked us about our business model, our OpEx and our cost-to-average assets and cost-to-income ratio. I intentionally pick cost to average assets because in our view, this is a better reflection of the underlying business model and the machinery. Cost-to-income ratio sometimes gets distorted because of -- sometimes you could have a one-off income, and therefore, the ratio doesn't really gel well. But this is a core ratio. Cost to average assets will tell you at any point of time how the company is operating. 2.71%, 2.75% of peak of 2.75% in Q2, and thereafter, a consistent quarter-on-quarter decline in cost to average assets doesn't happen by coincidence. It takes a lot of effort to reduce 1 basis point of cost on an overall asset -- it's a big number when you look at 1 basis point on an overall assets, right? It takes a lot of effort to reduce costs. And to do that from 2.75% down to 2.43% in a matter of 1 year requires some effort. Right. This is operating leverage. As I said, we defined it as rate of growth of operating income to rate of growth of operating expense, which basically translates to if you have 1 bps -- 1 basis point increase in your cost, today, in the last quarter, we have given you 2.23 basis points of income, right? And 1.6 was what was in the reference period that we spoke about, the 12 quarters, where our price to book was above 1.5. Again, a consistent performance quarter-on-quarter, showing the trajectory on where we are heading in this. Would -- is 2.23 repeatable? Perhaps not. Where -- which is the ideal number? Where do you want to -- where do we think we'll settle down? Maybe around the 1.6 number. Maybe that's our sweet spot for the operating leverage. Return on assets, very favorite topic. I think a lot of discussion happens on this. Consistent performance, again, I think I probably overused the word consistent here in the last 20 minutes. And pardon me for doing that, but that's the belief, and that's what is coming out of these numbers. 0.82% going to 0.93%, 0.86%, considerably around that 0.94%. But look at the last few quarters, right? 0.94% -- sorry. And what will happen going forward? Because one thing is for sure that Praveen has gone ahead and said, our next year ROE will be 13.5% when we exit year '27. But once the cost of deposit unfolds fully, the repricing benefits unfolds fully and the yield kicker happens through the mix change in product. You -- one would expect that, that will flow into the return on assets. And, of course, the biggest there is the credit costs. And I don't have any reason to believe that what you saw in the 6 quarters chart on credit costs could be any different going forward. Return on equity, if I'm reading out too many numbers, the good news is I'm towards the end of my number slides, so you can have a breather. And I'm sure most of you come here to hear Praveen speak about his vision and going forward how the bank plans will unfold. And I really appreciate and respect that sentiment. But you guys -- perhaps you have to bear with me for some more time before Praveen comes over with his presentation. We have already said this. We have said that when we exit year '27, we'll be at 13.5% ROE. And when we exit year '28, FY '28, we will be at 14.5%. And where is the confidence coming from? The confidence is coming from the fact that the previous quarter that just went by, we are at 13.2%, right? So if you have any belief in terms of the trajectories and history repeating itself, then 13.2% is not very far from 13.5% or 13.5% is not very far from 13.2%. Right. Price to book. So in the reference period, we were at 2.12 on an average basis, as I said, with a peak of 2.52 and consistently over 1.5 and across those 12 quarters until COVID happened. And thereafter, we didn't -- we haven't had a re-rating. What I want you to look at is look at the book value. INR 156 going to INR 161 going to INR 165 going to INR 171, there's an addition of INR 4, INR 4.5 every quarter in the book value. And I really want you to absorb this because I think the reflection of what we do is in the book value, and the price to book is a derivative, which we don't control. All right. So I want to take you -- summarize what I just said in terms of last 6 quarters before I invite Praveen. But we had a consistent growth of over 18%. That's known -- I mean, you all know we are a bank which is on a growth trajectory of 18% to 20%. There's no surprise there. We had a consistent increase in core fee income, highest ever fee income in the last 16 years. We had step-by-step reduction in cost to average assets. We believe the NIM has bottomed out. And from here on, there will be an uptick. Credit cost has been consistently under 40 basis points, highest business per employee in the last 16 years. Highest full-year ROE in the last 10 years. Highest earnings per share in the last 16 years, and most efficient capital utilization in the last few years. Our RWA is under 50% now. We're at 49-point-something, right? All of this has happened in the last 6 quarters. And I want you to remember that. In the 6 quarters, these were the -- some of the highlights, and these are only select highlights. Now, before I invite Praveen to share his plans and vision, I want to respond to the question that I myself asked in the beginning, like how did we fare against these 12 ratios in the 6 quarters against the reference period. Well, I think I've answered that in each of the slides, but let's look at -- so this is the average for the reference period, and this is the average for the last 6 quarters. Advances growth, deposits growth, we can comfortably say there's a positive movement there. Yields on advances, as I said, we're pretty okay with 11.46%. We don't want to be chasing every butterfly in the town or in the garden. And we will avoid the temptation. We have avoided in the past, and we will avoid the temptation of getting into high-yield, high-risk products. Cost of deposit, there's a work. There's a task cut out for management team. We are aware of it, and we are working on cost of deposits as a management action item. And consequently, the NIM will be a reflection of the effort that goes into the cost of deposit. The other story on gross NPA, while our credit cost is in control, gross NPA is also something that at 2.91%, it's a far number away from where we want to be. And there's a concentrated effort from the management in terms of improving collections, recoveries and also certain other management actions to address this ratio. I don't think anyone in the room would have a question mark on credit cost for us. We're sub-40 throughout in the last 6 quarters. Even in the reference period, we were quite decent about it. Our cost to average asset is at 2.43% for the last trailing quarter, right? So 2.50% is where we have said that's a guided number, and we are comfortably placed on the cost to average assets. Operating leverage, we are at a much higher number than where we want to be at 2.23%. We said around 1.6% is perhaps the number where we would end up with. ROA, 0.96% is not good enough, 0.1% is good enough -- or sorry, 1.00% is good enough. But that's a derivative. We get our cost to deposit right, keep our credit cost in control, then ROA is what will happen. ROE, we are at 12.32%, as I said, and 13.2% for the trailing quarter, and 13.5% is what our stated number or goal is. I'm not going to make an effort on the last one. I want to leave that open for you all to reflect, contemplate and then tell us what you think we should be at. Thank you, ladies and gentlemen. Thank you for listening. My pleasure to be talking to you and sharing these numbers with you. I now request Praveen to share his plans and vision for future. Thank you so much.

Thank you very much, Ravi, and good evening, everybody. It's so nice to see so many faces here, many known faces here. Ravi talked about yesterday. I'm going to talk about tomorrow. Why yesterday is important is because yesterday gives you the confidence that the tomorrow can happen. But before we get into tomorrow, we'll talk about the story behind some of those comparisons and some of those outcomes Ravi had mentioned in the previous presentation. For us, there are some things which have changed and some things which remain constant. Let's look at what are the things which remain constant. First thing is, for the foreseeable future, I see us being in the secured space, which basically means lower loss given default. Granularity is very important for us, higher stickiness, better risk on both sides of the balance sheet. We are geographically diversified. There are many pan-India banks, but where we stand is that there is not a single state in India where we have more than 20% concentration. We are low regional concentration. And lastly -- sorry, we cater probably exclusively to the self-employed segment, which is large, you know that. In my opinion, it's underserved, severely underserved. And if pandemic has taught me anything, it is this one thing that this bunch of folks are supremely resilient. What you've seen so far is the top part of the duck. What I'm going to talk to you right now is about this furious paddling that you see underneath -- that you don't see underneath, which is what my team has done, which has made some of these outcomes possible. What exactly are those? What has changed? We spoke about what has remained constant. Now, let's talk about what has changed. The first thing that has changed, and this will be a surprise to many of you, in the last 2.5 years, we've had a new CFO, a new MD and CEO, a new Executive Director, a new CRO, Chief Risk Officer, a new Head of HR and a new Chief Internal Auditor. These are massive moves. And the part of the duck above the water remains. No news is good news, doesn't come out. And things happen smoothly, it's not news. Even in our bank also, cleanup makes up heroes. No errors, seamless, doesn't create heroes. It's a part of the job. But what is good news is that every single one of these folks, I mean, including myself in it, has come from within the DCB Bank system. And over cocktails and dinner, you will be able to interact with many of these folks in governance, who are not usually exposed to you, right, in governance, in support business team you probably know of. But just interact with them. The depth of talent in this company is something I've been blessed with. You will get to know of it when you spend time with them. Otherwise, you wouldn't find so many of these internal phrases coming in this particular slide. So that's the first thing. There's been a transition -- no, sorry, there has been transitions. What's the second thing? What changed? There was a lot of tweaking. What have we tweaked? We tweaked -- if you look at my transcripts about 6 to 8 months back -- 8 quarters back, sorry, I've spoken about changing this home loan and business loan mix with 50. Today, we are 60-40. It took time. Getting 11,000 people to -- a large part of 11,000 people to change track is not easy. I found out even when I -- it doesn't matter if you're a CEO or not, but getting this whole large ship to change direction takes time. But happy to say when the repo rate cut hit, we have done what it takes to ensure that there is a change in mix -- in business mix. And it's not just on one element alone. When pandemic hit in March 25, 2020, we had an INR 800-odd crore gold loan book, organic gold loan book. Today, it's 4x. Without incremental cost, in-house valuation, existing people, who were doing their jobs, took on additional responsibility and did this work. Did the gold price increase help? Of course, it did help. But the fact is you're getting incremental income, you're getting a larger book with very low underlying cost. You're just sweating the existing sunk cost. Many of you may not know this. We have started an educational institution finance program. It's an INR 1,000 crore book with really good portfolio quality. These are funding done to build a new laboratory, buy computers, a swimming pool, a new school building, primarily -- which are an INR 2 crore to INR 3 crore average ticket size, INR 1,000 crore book, built silently, strongly. And with the new NEP coming in, the new economic -- new education policy coming in, we believe this is a segment which will really grow. It's a huge segment for us, and you will see growth happening on this front as well. Headwinds on microfinance, we talked about it enough. Everybody knows about it. But that doesn't mean that there are lending cap that are left as such. We don't have the deep pockets to buy PSLC certificates. And we definitely do not want to increase our NPA in the future by doing microfinance at a time when headwinds are very heavy. What is the alternative? Tractors came in to fill the gap. Reasonably good yield, reasonably good NPA, distribution is a strength. We brought that in. We leverage partnerships on both sides of the balance sheet, and we'll talk about it in detail at some point in time. On the deposit side, with our fintech partnership with Niyo, on the asset side, co-lending. Co-lending started in 2021 -- '21, May '21, 4 years. I have put a curb on them, said you can't be more than 50% -- 15% of the total balance sheet. I put a curb on that. That's the kind of growth you're getting. Homegrown. Homegrown over DSA grown. We own the customer, not the DSA. Are we there yet? No, but it's a tweak. It's a good change. These are the sourcing mix changes that have happened in the last 18 months. And all these things, I want to tell you, are not just for 18 months. We're hoping that this becomes a part of our DNA, a part of our culture, and we will -- these are the -- this goes into the foundational who we are when we talk about the journey forward. So I covered transitions. We covered sourcing mix. Now, we're going to cover one more, the last change -- please, what is not changing is the slide. It toned up a bit. Core strength is increasing. It toned up, shedding fat, becoming slightly leaner, bringing energy into it. Improving productivity. We have raised the bar. If you can't handle the heat, get out of the kitchen. Ordinary is not good enough anymore. It is never good enough. It is definitely not good enough. The bar has been raised. Building deposits, decreasing cost of deposits. Emerging story, I still wouldn't give it credibility until a few more quarters, but a good beginning. Relying on technology controlling cost, and finally, expanding assets while conserving capital. We'll go through each one of this in detail -- that's okay, I'll go back. Building deposits, decreasing cost -- building deposits, decreasing COD. What you see here is a comparison of India's 3 largest private sector banks and public sector bank. We looked at the peak retail deposit rate entities and compared with DCB Bank's own peak retail rate. 6 quarters back, there was a gap of 89 bps. You've seen how that's progressing quarter-by-quarter. Today, it's 60 bps, the difference. Are we happy with the difference? No. Are we happy with the direction? Of course. And you're not comparing with peer banks or less than INR 3 lakh crore, 10 banks, no offense to you, Ravi. We're comparing with the best -- the largest in the country, and that's the comparison we're bringing in. That's a comparison not at my level. This is done at our branch banking head's one down level. So there is a -- it's not easy because we've been selling price. Today, we've changed that. So it's a hard task for them. I understand that. But that's the way we want to build this franchise. We also talked about performance, raising the bar. Just look at the business per employee, it has gone up from 8.30 to 9.81. That's 18% increase in 15 months, and that's not a big thing. You know when that becomes a big thing, when you can increase the business per employee by 18% in 15 months without changing the granularity of either the deposits or the assets. That is something which we are proud of. Will this number of employees keep coming down? Of course, not. We will continue to invest. We are a people-led company. That will happen. But will the business per employee grow? We are doing everything that we can to make it grow. Busy slide, I'm going to talk about 4 items alone here. How is technology helping us? In DCB Bank, less than 8 months back, if you were to open a gold loan, it takes you somewhere around 115 minutes. Today, it takes you 30 minutes. Many of you do go visit our branches. Many of you do, I know that, right? I mean, you can talk about it openly. Check it out, see whether it's right or wrong, 30 minutes. Second, I want to talk about is something called CUBE, account opening, no paper, no courier, no storage, no errors, fantastic turnaround time. There is something called My Docs, which our technology folks -- you should have interacted with CTO during our break. Brilliant, My Docs. Imagine you can call 24/7, and then, on IVR, request for what document you want without even getting into Internet and then get that particular statement or document emailed to you any point in time. No human being involved, absolutely no human interface. Of course, you can go through the Internet banking as well and collect it. You don't need to have passwords. OTP-based, go to the website, collect the information. Brilliant stuff, I have to say it myself. And lastly, we can talk about secured credit card. For every eligible credit card holder in the country, there are close to 16 ineligible people. We are betting big on secured credit card. I ran the credit card portfolio of Citibank about 25 years back. And I'm convinced that a company which is running a normal credit card cannot give the same emphasis and focus to a secured credit card. A secured credit card is not a revenue-making proposition on the loan side, while it is, we consider it as a liability proposition. We consider it as a mechanism for eternal gratitude from a customer who has -- who cannot really participate in the mainstream because of some behavioral impact, educational impact he or she had. We believe secured credit card is going to be really, really big. And we are looking at liabilities on that. Even though it's a buy now, pay later, fully secured instrument. What has changed? 20% growth Ravi showed on assets. And I'll tell you, Q1, our Tier 1 grew despite growing 20%. In Q2, our Tier 1 grew again, two consecutive quarters where we're growing 20%, nearabouts. And our Tier 1 capital is increasing, strange as it may seem. Will it continue? No, we will use. But having seen these 4 slides, what is the takeaway for you? What are you taking away on the last 4 slides? Let me repeat. We spoke about calm transitions and with the depth of talent in the company. We talked about sourcing exchanges. I showed you 4 slides. In my opinion, the common thread between these 4 slides is one word, discipline. We have ensured that the resources that we have are being spent wisely, whether it be capital, whether it be employees, whether it be cost, whether it be -- waiting, employee, capital, cost, cost deposits? Every single parameter, if you were to see the common thread, it is about establishing a bit of an order and discipline on how you utilize these resources that you have. Enough said about the past. Let's talk about the future. Let's talk about tomorrow. What do you want to do? What do we want to do? Change is difficult. I never thought it's too difficult, keep pressing this, but change is difficult. My management team and I generally -- it is not a vision statement, mission statement, okay? This is just that we believe and possibly one of the reasons why we come to work is because the 19 of us genuinely believe that we can be an organization that can scale up and provide timely and tailor-made solutions that meet all the financial needs of a self-employed customer in every single neighborhood that we operate. It sounds like one [Foreign Language] statement, right? Let's break this up. First thing I want to tell you is about tailor-made solutions. As a bank, we have been giving cookie-cutter products. Nothing wrong with cookie-cutter products. These are templated products. Fit in, yes, goes through. Doesn't fit in, doesn't go through. Nothing wrong with that. But we want to be a bit more customized. How will we do that? Have the patience and see what we plan to do about it. Second thing, we want to be a full solution provider for all the financial needs. What are all the financial needs? You have surplus money. You have a need for money. You need a risk protection solution, so many insurance folks sitting here. I can't avoid saying that. Fourth, trade finance solutions. All the four, we want to provide all the four. The people we compete with provide only one solution. That's why we need all the four, and we'll talk about who we compete with. And we will do it in every neighborhood that we operate. And when India stack of technology becomes stronger, when you are able to do more products online, we probably will drop this every neighborhood from our centers. The rest will remain. That's the reason why we come to the bank. For some people who do not know who we are, what we stand for, what defines us, the market defines us, the canvas on which we operate defines us. What is the canvas on which we operate? For the people who know us, this is ad nauseam. How many times will you say the same thing? Self-employed is the canvas where we work. Geographically diversified. We don't have a Karnataka risk. We don't have a Tripura risk. We don't have a Maharashtra risk. We are at maximum 20% in one particular state, not just pan-India, low regional concentration. We do lending, but genuinely, we want to become a banker, not just a lender, a banker. Nice little cusp of the Venn diagram. That's where we want to be. That's the canvas in which we want to operate. The core of who we are, what do we stand for, what are the immutable, unchangeable parts that we need to stand for, secure. Even when the temptation -- see credit cycles happen, there will be times when it looks -- when the margin looks very rosy. Will we deviate? Probably not. We want to be in the secure space. Granular, you'll keep hearing this word, and tech-driven. How much of a tech-driven we are, I'm not happy. The appetite for tech driving in our bank is infinite. Every area where there is a paper, paper is a symptom of a poor process. Driving the tech agenda. User interface, make it simpler. Why would you need training on Finacle, FinnOne, many other core banking systems? It has to be as intuitive. Nobody taught you how to do WhatsApp. Make it intuitive, tech-driven, both at the customer end as well as the back end. Don't -- we think of the bank as a train where each compartment should be automated and also the entire train should be. What happens is there's part compartmentalized automation, which happens. Integration has to be through the bank, critical for us. That's the core of who we are. Secure, granular, tech-driven. The culture that we are driving. Regardless of what our size is, we want to be a high-growth player. We want to be low credit cost and consistent and predictable. This is what we -- this is what defines who we want to be. We may not be that, but that's where we want to go. This is extremely clear -- it will be very clear when you interact with my team members of how we think, how we define ourselves, what do we go in for. I'm going to talk to you about 2 big ideas we are pursuing for the future, 2 big ideas. One is the treasure within. What treasure within? Look at every single unique customer that we have. 76% of these customers have only one single product with us. Fairly simple, right? It's an indictment, but I think it's an opportunity. For every 1 DCB Bank gold loan, for every 1 DCB Bank home loan, for every 1 DCB Bank business loan, for every 1 DCB Bank overdraft, there is 1.7 gold loan taken by our customers outside of DCB Bank, 3.3 home loans taken by our customers outside DCB Bank. Of course, you can read this. 1.7x business loan taken by our customers outside DCB Bank. 0.9x overdrafts taken by our customers outside the bank. Are these products that we don't do? Of course, not. In gold loan, in my opinion, we are competitive on price, far more competitive, but still people have taken from somewhere else. On home loan and business loan, we may not be that competitive on price. And I have no problem if the customer goes out and takes a loan, and I'm telling you publicly, provided the customers asked you and you have said, look, I cannot drop the price or you're ineligible. My guess is these customers and our relationship officers, our Internet banking have not even spoken about this. But this can be the future. Every month, there are a bunch of customers, if you look at the honest, and where do you get it from, people in the back, Bureau Scrub. You exactly get to know what's happening. Remember, 2 slides, 76% of our customers are a single-product customer. These are people who have -- who are normal customers. We compartmentalize them as home loan customer or LAP customer. There's nothing called a home loan customer. There is a customer who at different stages of life have different requirements, which a bank of our kind has the product to satisfy. Why don't we do it? Maybe because we have verticalized, we have business verticals, affordable housing. You don't do anything affordable housing. That's all you do. You have somebody who's a business loan. We look only at that. The verticals that we have created gives you focus. It gives you growth, but there is a price that you pay. For every give me, there's a gotcha. I could give you very nice sounding names because AI is an item which everybody loves. I could talk about recursive learning or conversational AI, but I'm not going to do that. I'm going to talk to you about [Foreign Language]. The end result of that recursive learning or AI or conversational AI or natural language -- natural programming language. Let's talk about the basics. What the BIU team does, the business intelligence unit team does, is they give you a bunch of customers who have a low bureau score who are an outstanding gold mine for gold loans. Secured cards, massive set of -- we have our savings account customers with a low balance in our mind is a perfect match for the secured credit card. They got terrible bureau scores. They are marginalized. In our opinion, it's a big-mover number, which you can get entirely from within. High bureau score and low balance. Let me tell you how a normal relationship manager works in a branch. Your balance determine your worth. I mean, if Bill Gates had an account with us and is keeping INR 1,000 in our bank, you wouldn't treat him like Bill Gates because Bill Gates is not defined by who Bill Gates is. He's defined by what balance he keeps with us is, but that's not the person. Lastly, this is on CASA, more importantly, on SA. We're all chasing float because float is low cost. But the way to float is through flow. If money is going to go outside from your account to the outside world, there is a greater chance of you getting a better CASA. So we are actively encouraging our customers to use money, don't keep a balance, just use it because SA customers who come for interest is nothing but TD customers masquerading as SA. And while CASA ratio may improve, we are not in the CASA ratio business. We are in the cost of deposit business. So there's an active encouragement of using UPI, driving the flow. And by doing that, you get the float. The way I tell my people is this. There is opportunity disguised as deadwood. Low balance customer. No single RM will pay any attention to this customer. But the moment our analytics team is able to build a straw man and every single customer you're building a straw man based on information within and information outside. Who you are is not defined by how much money you keep with us. Who you are is defined by the information, a straw man, which is being created by our BIU team. Did anyone of you know this? Did you know this? You knew this? Amazing. You knew this? Awesome. I didn't know that you would know this. Forget the first part. 10.1% of the debit card international spends in a given month, I took June as an example, is done through DCB Bank through the Niyo program. Many of you may be Niyo customers, right? That's no big deal. But the second one is a big deal. 2.1% of all the debit, credit and prepaid card is from RBI data. The denominator is RBI data. Numerator is our own data. The spend 2.1%, and this includes all the behemoth, big card issuers. This is a flyweight fighting a battle with a superheavy weight, 2.1%. Am I thumping my chest? I want to tell you what we are not doing, not what we are doing. You know what the sad part here is? Next slide. 27% of these people who are doing their foreign exchange transactions outside the country is keeping less than INR 1,000 balance with us. The moment you get down the flight, finish customs, before you buy the liquor bottle, you're transferring money from your Niyo account into your main primary bankers' account. Is it a problem? I see it as an opportunity. They love our cards; otherwise, the 2.1% wouldn't happen. No way. What's happening? People who raise their hands are using as a service provider. We are a bank. You're not using as a bank because we're not told you that we're a bank. What are we going to do about it? We'll talk about what we're going to do about it. This is a slide which will be new to many of you. You may have an inclination as to what it is, but you never got it this clear. Who is our competition? Balance transfer out in a particular month of a LAP customer -- of a LAP database of a business loan, right, loan against property. It's one particular month, I think it's June or March '25. I don't know -- forgot which one of the two. 35% of the money comes in from private sector banks. They take away our customers, 35%. Who's the next? Who's the next? HFCs take 24%, NBFCs stake 20%. I'm not getting to the rest. They may get the customer because of higher exposure or because of better pricing, mostly better pricing. 44% in that particular month has gone to NBFC and HFC. What do we have that they don't have? What do we have that they don't have? Thank you so much. Now, you're going to take over my presentation. Term loan to overdraft, easy. You remember how much struggle I had from moving the HL/BL ratios, 50-50 to 60-40, it took 1.5 years to get it done. Similar kind of thing is happening. The duck is paddling underneath. You're not seeing it. In the surface, it's calm, but the legs are moving. From one-time use to multiple-use. For us, it's critical to capture the flow. You want to meet, said this enough number of times. It gives you sustainable fee income. It gives you lesser runoffs. It's a fantastic early warning system indicator. Gives you better retention. So many positives. What I haven't written there is amortization. Look at a normal LAP, [Foreign Language] is to fill what is being repaid. It's like a treadmill for those of you who run, right? 4 months of work is to keep the book where it is. The rest 8 months is for it to grow. OD, very different. Is this a single -- is a panacea for every ill? No. For certain kind of customers, of a certain size and above, fantastic thing. Are we trying to solve all competition? No. We are targeting at the 44% who is eating our breakfast. We are targeting. All is fair in love, war and banking, right? We've been doing the lending business for too long. It's time we played the banking business. Will it happen overnight? I really wish we would. We have the ability. And this is not some God-given skill. It is just that you're using the licensing moat, and you can compete with a large proportion of the 44%. What is it changing? What -- how is tomorrow going to be different? So I spoke to you about the opportunity. Now, let's talk about what are we doing about the opportunity. We -- all the while we have been building business verticals. Now, we are building a business horizontal. We are building it. You may want to ask -- I'm sure the questions will come in later. You may want to ask -- all products, everybody sells all products. There is a benefit in focus. We want to grow 20% consistently, 18% to 20%, 18% to 22% consistently, you need focus. So we'll still continue to be business vertical focused to get the customer in. Once the customer comes in, the business horizontal takes over. How do we do this? First element, a unified, cross-sell engine. When you meet our BIU, Shashwat is there. You'll meet him during the course of tonight, the evening. He will talk to you about the centralized intelligence layer that is being built in. I envy the PSU banks. They got this ready-made. Relationship managers who understand multiple products and cater products to suit what the customer needs, we're going to build that. We're already on the anvil, building it up, improve depth, the literacy of the relationship manager. Third item, the efficiency and the flow, the process flow, we talked about tech a while earlier, making it seamless for the -- not only for the customer but also for the front line, integrated across all departments. We don't want to man in the ATM. We want the entire thing to be seamless. Analytics-led so that right products can be offered to the right person at the right time at the right price. Rewards. You get what you measure, you get what you reward. Wallet share of the customer becomes a part of the RM scorecard. And finally, the tone at the top. What happens is what you want to make it happen. This is one of the things that we want to make it happen. Why will it happen? I'll give you 2 examples. Look at co-lending. Look at the kind of strides that we have made on co-lending from 2021 onwards. If we can execute that, if we can do school finance, the way we have done it, there is no reason to believe that this cannot happen. And this is entirely within our -- this execution challenge is entirely within our ecosystem. There is one important segment that we missed out. If you were to look at -- you're all mathematically well evolved. Look at R x T being 72. Familiar with R x T being 72? 1.09 -- 1.08 raised to the power of 9, right? If T is 9 years, rate is 8, 72, you double. In 2016, we were doing loans of INR 3 crores to INR 5 crores. Just by inflation, that INR 3 crore to INR 5 crore is INR 8 crores to INR 10 crores. I generally think we missed a bit of trick there. We are introducing INR 3 crore to INR 10 crore secured sole banking proposition run within -- I mean, we have a corporate bank, we have an SME proposition. And what fits in, in the middle is this INR 3 crores to INR 10 crores proposition. In summary, what do we have to say? Unchanged foundations, continued [indiscernible] on cost, credit provisions and capital, that discipline continues. Trust area, employee productivity, tech option. Business horizontal to supplement business verticals. If you have a moat, if you have a leverage -- if it can be leveraged, why not leverage it? Continued focus on inorganic opportunities. Portfolio purchase, asset purchase, if there are good opportunities coming in, inorganic co-lending, multiple areas where we look at strategic fits. And finally, fill the key segments, which do not violate the first point, which is the unchanged foundations. That's in summary of what we intend to do to become that institution which scales up and provides timely and tailor-made solutions to self-employed customers to meet all their financial needs in every neighborhood that we operate. That's what we want to do. What are the milestones for the next 2 years? We want to ensure that the growth continues. We want to ensure that the foundational nature of the growth is unimpaired. And these are the ratios you can assess our progress by. We'll be publishing this and tracking ourselves to this quarter after quarter all the way until FY '28. We, as a team, are extremely excited in this particular journey. We really believe that there's a purpose, there is energy, there's a drive, there's a cohesion within the team to take up this opportunity and take the bank forward at a pace which is similar to what you've seen in the last 6 quarters. We really believe that there is a team which can reach out for the stars. Thank you for your patience, and you can ask both Ravi and me all the questions that you need to ask for what we have presented, plus some others which we may not have presented as well, right? Thank you. Are there people with mics around? Yes, great, great. In the meantime, some housekeeping announcements. One is that this entire thing is recorded. The -- both the presentations are on the exchange websites. So if anyone wants to refer it back, it's always there. The question and answers also will be recorded so that people do not lose out in terms of information, there's no information asymmetry during the course of the Investor Day.

I'm Aadesh Mehta from Motilal Oswal Asset Management. We understand that you're aspiring for an 18% to 20% growth. But if you see the recent trends, right, if we exclude portfolio buyouts, ex of portfolio buyouts, our growth is still lower than double digits. How are we thinking about growth in that segment? Ex of partnerships, how can the growth quickly ramp up?

First of all, the ex of partnership, the growth is not single digits, okay? In fact, let me give you some figures. If you go back to Q2 of last year, our single biggest co-lending -- we had only one co-lending partner a year back. That was IIFL. From March 4, 2024, all the way to October, there was 0 incremental sourcing on this book. And we had an INR 2,800 crore book, which ran down. It entirely ran down. Despite the rundown, we still posted between 18% and 22% growth. And where did that come from? It came from organic ability. Having said that, yes, co-lend -- what we did -- our learning from that was we have to have multiple partners because for whatever reason -- I mean, I don't want to get into the reason why the embargo happened, that stoppage happened, regulatory embargo happened, we now diversified. But the fact remains that our organic growth is pretty much in the high teens. So going forward also, I see that happening. We are making a conscious effort to move away from the lower ticket segment to the higher ticket. You would have got a sense of it anyways. You can't do overdraft to an INR 20 lakh customer. I mean, you can do, but you'll pay the price for it, right? But an INR 50 lakh plus is something which -- where overdraft will come in handy. Your runoffs will be less with overdraft coming in. And now let me take a completely different aspect to this. From a loan growth perspective, the INR 3 crores to INR 10 crores, which you are consciously getting into is an element where we see a higher ticket size coming into play, which we think is of normal organic risk. It's not a higher risk segment. Our school proposition, which I told you is an INR 2 crore to INR 3 crore proposition. All these are indicators to see that we are moving up the ticket size ladder. So that's how we are compensating for lower employees and not just through the partnership alone. Gentleman right behind you, and then, we'll come to you. Can you give the mic here so that -- sorry, there's somebody else also. Yes.

So I wanted to ask. Am I audible?

Not so much.

So we are saying that we maintain a guidance of growing our book by 18%, 20%. And during our Q1 con call, we said that we are going to focus a lot on 360-degree banking, SME-led businesses. While in Q2, you said that our SME or 360-degree led book will be only INR 200 crores, and this will be franchise that you'll be growing for next 5, 10 years. So most of the growth for next 2 years should be coming from LAP and mortgages if I understand it right?

So what I said there was SME had this element called TReDS. TReDS is a 90-day product. It's a working capital product, which is low yield and low tenure. So we've kind of gone slow on that, reduced it. In fact, if you were to see the whole of Q2, we've cut down on -- our balance sheet grew only by 14%, okay, even though there's been 18% growth in the customer advances and deposits. Why that happened is because we have gone kind of heavy on lower earning assets and on borrowings, which are of higher cost. So we gave up both sides of the balance sheet. So there -- growth for growth's sake is not what we're clearly looking at. It has to make money. So we just cut down on the TReDS element and SME completely. Most of the overdraft, not all, but most of the overdraft, which we are doing will come within what we show in the investor presentation as SME. So that's where the growth. So it's not just LAP and home loan alone, but the SME book also will grow. The composition of the book will be different. It will be more the INR 50 lakh plus overdraft loans coming and sitting there and not the TReDS, which is a high velocity, quick closing loans.

So the growth guidance remains the same, but the composition...

18 to 20 is...

The composition shifts from SME to LAP and mortgages mode. This is what I wanted to understand.

No, no. Only TReDS is going down. Overdraft is critical for us. I mean, otherwise, I wouldn't have even said that for all the reasons I told you, it genuinely makes sense. I mean, you can compete with a top-quality NBFC who's coming at a lower rate by telling the customer, it's not the interest rate, it's interest paid. And our customers understand cash flow very well. So it's a very important element in our armory, so SME will grow.

And also, if you can give us some light on 360-degree banking as there was a lot of focus there, and how you plan to grow for the next 5, 10 years, as you mentioned in Q2 call recently?

It's the same thing, which I repeated here. I just call it treasure within, because 76% of our customers are only having one particular product. And you see so many of our customers taking our same product, which we offer at a more attractive rate, but taken from outside. It's a sin. It's really ridiculous. So that's why we are building up all those things which I told you to ensure that it stays within or even if it doesn't stay within, it is after a lack -- after a full effort that the customer is going out. We're okay with that. But it can't be because you are verticalized, right? And you don't even have this question, which is being asked. So that's what we are trying to plug.

Lastly, do you fear from the gold prices that have increased? So number of customers might have increased by some 5%, 10%. All the more our co-lending has doubled almost. That is mostly due to the value of gold increasing and the loan.

Not at all. We don't allow -- I mean, we do allow, but very little enhancement happens in our bank. So most of the gold is at the rate at which the customer came on board. So while we do an MTM, the customer does not get the benefit of it. So just because the value of gold has gone to, let's say, INR 12,000 per gram, the customer who came at INR 8,000 remains at INR 8,000, right? Unless -- even on the Internet banking, he cannot enhance that. We don't allow it. And that's more from a risk perspective because we said, look, there's no point in getting the incremental gain and then chasing the customer in case the gold loan -- the gold rate falls. So for us, it's a cushion.

And lastly, on cost-to-income side, how much juice is left? We've reduced...

If you see, we never mentioned cost to income. In the whole presentation, we talked only about cost to average assets, right? But we can talk about cost to income also. So how much juice is left? I don't think there's too much of juice left because we need to invest in people. We need to build that. And we don't want the growth in the next year to get impacted because we don't have the right kind of people to take the proposition forward. And the whole game is about leverage, which Murali spoke -- which Ravi spoke about, which is the incremental cost to output, right? So we need to invest in people. I think 250 is -- 2.5% is a good percentage of cost to average asset to go forward.

And given that most of our loans are sourced through DSAs, a good part of loan are sourced through DSAs, given that if some more rate cuts come, is there a risk of getting BT'ed out? And what is our view? How will we contain it?

We've been through 100 basis points cut, and that's a very good graph. I mean, have a look at it because it's publicly available. A 100 basis point reduction has resulted in the NIM moving from 3.29% down to 3.20% to 3.23%. Just have a look at how it moved for the 10 other banks, see what the difference is, right? That gives you an indication as to how strong the franchise is so far.

Sir, this is Jai from ICICI Securities. Sir, excellent presentation, very refreshing point of view through you also and the CFO presentation also and your presentation also. I have first question for CFO presentation, and it's an observation.

You want me to answer or Ravi to answer?

No, no. So this is an observation and maybe you can answer. The reference point that you showed, right, that those 12 quarters, Q4 FY '17 to third quarter FY '20, that was actually one of the worst period in Indian banking because of AQR, because of June 12 circular and everything. You were, of course, not impacted to the extent others, even including all large banks, mid-tier banks. I would draw your attention that the ROA in that 12 quarters for system was 0, right? Yours was 0.9%. You have come back to 0.9%. But system has moved from 0 to maybe 1.3% or maybe 1.4%. So you are there where you were. System has moved, I mean, very high times because the period was very, very poor. Versus that reference point, of course, the point that you made out is very clear. There' a lot of, let's say, undervaluation at this point of time. But the gross slippages as well as net NPA, these are the 2 things which are still above that. So given the way that you are, let us say, you are running a secured book, and ideally -- I mean, the credit cost is okay, but your net NPA is still also on the higher side. Other banks, even including PSU bank, et cetera, the system net NPA would be like 0.5% at this point of time. So that is one observation as to why there could be seemingly mismatch what you showed there, but I take most of the points there.

I totally agree with you. I think your observation is right. The moment we get our NPA story also, gross NPA, net NPA story, right? You may not get a slippage story, right? You didn't talk about slippage, but I'm bringing slippage also in. But if you reduce our gross NPA, net NPA, and we would like to make it below 2% and below 1%, right, in an ideal world. It's a question of time. But if you can work out some method of debt transfers or other modes in which we can bring it down, it still is a good thing to do, right? We're exploring opportunities. We don't know when that will come in. But till such time, organically, we kind of presume that it will come down the way we're seeing it. But yes, I take your point fully on the GNPA and NNPA.

System ROA. I mean, we have done...

NNPA part of it. Yes, it's a work in progress. For us, it's not about what has happened so far. It's about what can happen in the future, Jai. It is not about -- what you saw till now just shows you capabilities, right? The whole idea of what I want to talk about is the -- is a possibility of what can happen.

Right. Secondly, sir, on your SME OD transition, et cetera, system or a lot of fellow banks, they have gone very big time on unsecured SME, right? Business banking is a segment that they call. What is your view? I mean, when you transition to, let's say, multiproduct bank from a single, or let's say, one solution to multi-OD, et cetera, do you intend to catch on the business banking segment or you intend to do the secured SME portion only?

Secured. Clearly, secured only, not because of any other reason. Let's assume a 20% growth. In 2030, we'll be about INR 2,50,000 crore bank, right? Like you're at, let's say, INR 80,000 crore now, let's say in 3 years or 3.5 years, you double that, INR 1,60,000 crore, yes, maybe some INR 2,25,000 crore bank. Still think that there is a large proportion of secured lending possibilities still in India even in 2030. So why do you want to get into that area, right? I agree with you, if you exhaust that opportunity. Our opinion is not really, right? Organically, we can get to, mathematically at least, INR 2,25,000 crore book by, let's say, April 2030. If you were to do the math, right, I'm not getting into the -- it's not a guidance, but just telling you, still, there is so much of play left. So we'd stick to secured lending.

Right. And sir, on this -- the last slide that you summarized in terms of financial outcomes, if I see this -- I mean, the numbers that you showed as an NII as a percentage of assets was 3.15% to 3.2%. The last slide that said NII...

Not earning assets, total assets.

Total assets.

Yes. So there's a difference between the NIM that we show earlier and...

Yes, that is right. So the like-to-like number for Q1 and Q2 is actually 3% and 3.05%, right? That is the right comparison, right? I mean, we are saying that 10 basis point on asset improvement for the full year versus what we are doing right now. That is the right understanding...

That's the right understanding. We may have to say that, look, this is assuming that there is no incremental rate cuts coming through. But if it does come through, then there's some benefit you will get on the fee, like we saw earlier, right? But the key thing is this. See, earlier, it is a bit of an unknown. Today, it's a known. You know how the NIM changes per percentage point cut for us as well as for others, right? So you can look at the math and figure out what the sensitivity of a rate cut to our bankers and assuming that the liabilities team also acts in a similar way, right? And I'll tell you where the confidence is coming from. Whatever savings account cut that you can do or should do has been done, right? You're seeing the benefit of the long tail duration of the term deposit. We did term deposit of a longer tenure only for one reason because 54% of our book was mortgage. So we needed that long tenor term deposit. Now, we hopefully, with every passing month, if we renew exactly the same number of -- same percentage of term deposits, we should be sitting on an incremental cost of deposit. So that's the game we are playing.

And lastly, sir, I mean, see, 1% ROA is maybe 2 years back when the system was under COVID, that was sort of one of a benchmark. But how do you sort of propose or do you intend to do, let's say, 1.1% or 1.2% ROA? Because that is where the inflection point comes, right? 1% ROA is actually below system. So what are your thoughts? When do you think you will be crossing that hump of maybe 1.1% ROA?

Instead of when, I'll tell you how. The play is on cost of deposit, okay? At INR 78,000 crore balance sheet, I think the time has come where we get the deposit that we want at the price that we want, right? That's a challenge. And what you should track us on is our ability to grow liabilities at our trajectory on cost of deposit. That's what I'm tracking myself on. Probably you should look at that, right? That gives you an indication as to when it will happen. We will not play the yield game. We will not. Why? When you said, will you do unsecured, there's a temptation. Obviously, who doesn't want to make a higher NIM, all of us want to. But strategy involves sacrifice. If you try to catch every single butterfly in the garden, you'll land up catching no butterfly at all. So it's okay. That's a cost we pay.

Correct. Actually, sir, that gives me one more question. Tracking yourself on cost of deposit could be a slippery thing in my view, and hear me out why. We have seen other banks where there have been management change. The first thing that they do or say is that we want to improve the franchise. And the way they do it, they will be cutting bulk deposit, keeping the cost of deposit a bit lower, and that sacrifices growth, right? You can easily up or down in the bulk deposit manage cost of deposit, but the sacrificing part is the growth. Now, you're saying 20% plus growth while keeping a tab on the cost of deposit.

18% to 20%.

Yes, 18% to 20%.

It can be more than 20% also. Yes.

Yes. So 18% to 20%, along with a tab on cost of deposit. So -- I mean, good luck to you. But I'm saying we are already at the -- maybe the top tier in terms of cost of deposit, so best wishes. Maybe -- I mean, to do both growth as well as improve the cost of deposit has been -- at least historically, has been a very, very tough job.

It's not easy. And you're right, it's not easy. But if you want to get the kind of premiums that we think we deserve, then we should demonstrate that, right? Second thing is, honestly, there has been a transition, but there's not been a management change. The entire set of new influx has come from within, right? So if I have to blame somebody, I had to blame myself, there's no point in blaming. Thirdly, whenever a transition happens, you said in other banks, we're not like other banks. We never took a huge provision when MD/CEO transition happened, and we didn't live off some mega provision for the next 3 quarters. We lived life normally. So some bit of it is that Venn diagrams, which I showed you, some of the values that -- these are important things for us. We want to -- it's not about cosmetically making a difference, right? We may do something cosmetically. But honestly, we won't -- there is a franchise we need to build. There's an opportunity. I mean, there's like -- there's a crying need. I mean, we can fill it. If we don't fill it, somebody will fill it. So that's where we are. Is it going to be easy? No. I think over cocktails and dinner, you will know that we have the team to do it.

Am I audible?

Yes, sir.

Just continuing this GNPA and NNPA targets, which you said like 2% and 1%, respectively, are they coinciding with the 2 years assumptions or they are a little far off?

See, it's a tough question to ask and answer. I'll tell you why. What we're really concentrating on is to get the right kind of assets. And even if the slippage is a bit high, if the GNPA is a bit high, NNPA is slightly a bit high, as long as the credit cost is okay, you are anyway on your model to get where you want to get in terms of guidance, right? So these are the things which you spoke about. But I understand this. And this is a painful lesson from the pandemic. When we had a 7% odd of restructured book, right, one of the reasons I think that the market was spooked was because at 7%. I mean, it's like a problem or an overhang, which can happen in the future. But internally, both on slippage and gross NPA, yes, we -- even when an ECL model comes in, there is strong recovery that also goes into the model. Out of INR 100, which slips, INR 81 you're showing, right, that goes between somewhere as low as INR 79 or INR 77 as high as INR 85. So that model will still hold good on the credit cost side. So in an order of priority, I would think the credit cost maintenance is paramount. And yes, we need to work upon GNPA and NNPA. That's the way I see it, right? Slippage, because of the market that we are in a gold loan, if we didn't have so much of gold loan, probably we'll not have an issue. It needs improvement. So there will be marginal improvement happening. So drastic reduction unless we do some ARC sale, et cetera, it may not happen in a falling-off-the-cliff manner. So it will still be gradual as we speak.

Okay. And this repricing advantage, which we are assuming, can you translate in bps over a year or...

Repricing of the term deposit or the...

Term deposit. Bulk deposit, term deposit, whatever you want.

Can I put it another way? You look at our peak rate, right, or a cost of deposit 2.5 years back and look at the cost of deposit today. It will give you an indication what the differential is because most of the loans -- most of the deposits are a longer tenure, which will come up for maturity. So you'll know each month approximately how much comes from maturity and what the incremental differential is. And our renewal rate is in the high 70s. Nitin, yes.

I have a question on your ROA. Now, the number that we are targeting, we are already broadly there and in terms of 0.95% approximately kind of ROA. And with the potential improvements in margins, some bit of further cost optimization, credit cost remaining in control, should ROA not surpass 1%? So is it something that you are keeping as a cushion that is limiting the guidance that you are giving?

In fact, Nitin, I usually talk about ROE, consciously not talk about the ROA. And the reason for that is very simple. A quite a lot of products that we do are low margin, low OpEx. So the margin is extremely thin, and they are very low capital consumption in that sense. I would tend to think that we've hit the nadir in terms of the cost to average assets. So now it will probably be -- because investments will continue to happen, somewhere around 2.45%, 2.50% will be the -- would be the cost of -- so there will be a slight uptick coming in there. NIM, let's wait and see. I mean, see -- look at us for a few quarters and see how the improvement is, right? How the change is, right? That would give you an indication as to where we are. And also the growth. End of the day, it's an average assets which comes into play, right? So have a look at that. I don't expect the credit cost to be above 0.45%. Yes, for the half year, we are at 0.45%, probably even be lower going forward. So 2.50% OpEx, 0.45% kind of provision cost, right? Fee, a lot of insurance folks are here, we do a reasonably good job of the third-party distribution. You will get a sense from many of the folks who are sitting here. We do -- we genuinely do a good job, at least compared to how we were doing, there's a difference happening. Treasury has more or less dried up. So you will see -- that will not be contributing. And NIM, let's wait and watch. Let's see how the NIM journey goes. So it will give you an indication. Whether I'm keeping a cushion is a different matter altogether, right? If it's happening, it's happening anyways. But very high probability that NIM has bottomed out.

And what 1 or 2 things are you most worry of over the next 2 years as you'll now go on to deliver as what you are talking today?

What am I most?

What worry of, like most cautious about? Like is it the ECL transition? Is it any potential rate cut if it comes through, which is still a kind of uncertain...

Not really. See, we've seen the rate cut's impact, right? We were very -- we are reasonably confident because we had worked the math out. We knew how much it would impact us. That is not -- I'm -- I'll tell you what worries me. What worries me is what I was speaking to Jai about. Will we be able to grow our liabilities in the same granular fashion at a lower cost of deposits? That is a worry for me. I'll tell you why. Because of 15 years our frontline folks have gone ahead and sold it saying that we give you the best interest rate. We give you one of the best interest rate. And to change the pitch for so many other people, right, on the front line, retrain them, give them the confidence that you still can, it's a very difficult task for Pankaj. If you meet up with him, speak to him. It's not an easy task. So that is one area which I worry about because the whole premise was built on our ability to continue to grow and bring the cost of deposit down. Doing any 1 of the 2 is very easy. Doing both is probably, I think, the real challenge. The second challenge is it's very easy for me to stand here and say, cross-sell, customer 360, surplus need, deficit need. No bank has really got it right. Genuinely, not got it right. They have the business intelligence unit. They have horizontal, vertical, diagonal, you can call it by any fancy management term, but most guys haven't got it right. Public sector banks have got it right because that's a culture. It's from the ground kind of thing. We are attempting to do a matrix, and every matrix is not easy, right? Even as a matrix reporting, it's not easy. I think these are the 2 execution challenges, I think, which are really the problem area. On asset growth, we've -- I've told you this earlier, the co-lending book will not be more than 15% in quarter 4. There will be some challenges in terms of the new rules coming in, originators have to change their -- the way they are looking at it. We have to change. There is a question of blended rate. There is this thing happening. So I'm seeing some bit of kerfuffle, some bit of thing to happen before it settles down. But that's a known, known. I don't see. These are -- I can only think of 2 real issues in the way we go with things.

Right. And the last question is about the capital ratios. Now, you plan to operate around 15.5% to 17% capital adequacy. And so how do -- how should we rather look about the RWA optimization? With all the improvements that the bank has shown over the prior years, RWA to total assets is one of the best in class. So do you see further scope of improvement? And with the kind of growth that you're looking at, will you not burn capital at a higher rate? Or you see you will plan to raise capital successively? So how should we look at that over the coming years?

RWA would be in the early 50s, max, max. The upper limit is early 50s, okay? That's how we see RWA. On capital, we are genuinely comfortable with the capital that we currently have for the kind of growth projections that we spoke about in this room. But in India today, there are a lot of opportunities. There are opportunities. If we get additional capital right now, we can fast forward ourselves about 2 years, 2.5 years. That opportunity is there. If we don't fast forward, that opportunity is not lost forever because India is really, really doing very well, right? But we are -- at the moment on capital, there's no real requirement for the projected, budgeted growth. But for opportunities that may come our way, we would like to have the capital of the right kind of partner at the right kind of price.

Praveen, Bhavik here from InCred Capital. I just wanted to understand, when you say your NII will be -- NII to assets will be 3.12% approx over the next 2 years. Do you assume the spread between -- the term deposit spread between savings -- between large private and you to remain constant or reduce further?

Ideally, we'll be happy if it is -- you're talking about the peak TD rates which I presented, right?

Yes. Yes, yes.

I'll be very happy if we are within 50. This number, and you can go back and check this out, was 1.27% about 9-odd quarters back, okay? We brought it to 0.89%, brought to 0.60%. It's an indication, right, as to where things are. Even from a cost of deposit perspective, people who have a large savings account can make a quick difference in terms of bringing the cost of deposits down. We are cognizant of it. And a lot of it has not got to do with the bulk deposit because I know -- I think Jai mentioned bulk deposit. Bulk deposit is super sensitive to price, okay, but retail is not. When I speak about 0.5 million Niyo Card customers and publicly saying 27% of them who have used the card abroad, if you have a passport, you're in a different section of the society. You've gone -- not only that you've gone abroad, you've swiped the card someplace else and come back and keeping less than INR 1,000 in our bank account is a tremendous opportunity, right? And for those who do not know, there's something called liquidity coverage ratio. Are you familiar with liquidity? So INR 1 a bank gets from an individual is very different from INR 1 that you get from a financial institution. If you get money from an individual, you can afford not to keep surplus money in your SLR, which gets you what 6 -- Ajit, how much do we get, 6.5%? Around 6.5%, right? So while rupee is a rupee, in a Y-o-Y growth, it shows nice 18%, 20 kind of percent, but there is a mandate. Our branch banking guys have 3 mandates. You have to grow 18%, 20%. You have to get a lower cost of deposit. And where you get the money from also matters. It has to come from individuals, not all of it does, but that's a drive. So if you get this horizontal, which we spoke about, right, there are customers there. The KYC is already done. All you need is damn money. And let's not even chase savings, [Foreign Language] savings. It's not a cost of deposit. Even if we get term deposits from the individual customers, it will help me considerably. While it's not show in cost of deposits, it will show in interest on investments, right? There will be much less money in there. So there's a 3-pronged game that we are attempting to play. So when I showed you that it seems like only 2 items: one, treasure within; two, filling the gap of 3 to 10. But there are wheels within wheels there, which will help the bank become stronger, more robust. And forget about cost and P&L for a minute. It's difficult for all of you to do that. From a risk perspective, the stickiness that comes in with the individual customer is immense. So it is not just your trader, these are not your chosen segment of customers, the new customers, right? These are people like you and me who are -- these are not typical DCB Bank customers. And it gives you an opportunity, and they love you for it.

Just last question here. Yes. Just a follow-up maybe. So we want to focus on granular growth.

We are focused -- I hope we are because otherwise...

We are focusing on granular growth. So as in, in a scenario where our granular growth is less than 18%, would you be okay to compromise on asset growth?

I'll tell you 2 things we are not okay with. And there are times when you may not be able to meet that 18% number. It's okay, because you're looking at a 3-year window, and there could be times when that exact number may not be reached. We're okay with that, okay? As long as in a longer term, the graph is still growing at 18%, 20%, we are comfortable with that. But what we will not do is create an NPA problem for the future or create a mix problem on the liabilities, right? I mean I would come to you and say, look, this quarter would not happen rather than meet it through -- to keep up the word, we will not compromise the franchise. No, no way.

Anil Tulsiram here. Sir, my question is on the co-lending. Can you explain what is the strategy and rationale of doing co-lending? And what is the profitability? Most of the banks are pretty much not interested in co-lending at all. And we are one of the few banks which have 15% of the book on co-lending, and we have that target going forward also. So what is the strategy and rationale...

I'm going to talk about co-lending as per the current rules, not about the rules going forward, okay? And I'm going to talk about only co-lending for gold. Co-lending for gold typically does not come with a credit cost, typically. If it does, it's a very small basis point. We can live with that. It comes with 0 expenses, okay, near 0 expenses. You do some flying squad visits, surprise checks, et cetera, to see [Foreign Language], and the same thing is not placed to other banks or other financial institutions. There are 3 risks that you carry. So [Foreign Language] we do the checking. So a very nominal operation cost. And you get a very small NIM for it. There is very little capital consumption. Capital consumption, near 0; expense, near 0; provision, near 0; small NIM. Why do you think I'm avoiding the conversation of ROA? I'm avoiding the conversation of ROA because this is highly ROE-accretive business, but it's not ROA-accretive business, right? You get it, right? NIM is small. I'm not going to tell you how much NIM is, but it's considerably smaller than -- see, why will somebody give you a 20% loan to you as a co-lending partner at 20%? You get a much lower rate, right? So that's my view on co-lending. On other products, it is yet to be played out. The credit is yet to be played out because you're taking a call on the other person's underwriting ability, and then, your guess is as good as mine. So then you're doing co -- going forward, you've seen the rules, right? So that's my simple view. Why do we do co-lending? Because it helps ROE. It doesn't help ROA, it helps ROE. Sorry, I've kind of skipped you a couple of times.

Dheeraj here, Aditya Birla Health. So first, I would like to congratulate to your team because of the wonderful performance of DCB because I think that the DCB Bank has seen many credit cycles and the time of volatile credit market where there is any bad news coming from many banks. I have monitored this bank for a long time, and I have not seen anything bad in the news, so a wonderful risk team and management. The first question was my -- related to the capital that you told me that you are not seeing any equity dilution or anything in recent future for the -- your projected growth. But my second...

The right price with the right partner with the right opportunity.

You may see that. My second question is that, do you see any branch expansion? Or -- I mean, what I see that a few years back, you were, I mean, increasing your branch very fast. But in the last 5, 6 years, I've not seen any -- personally, I've not seen any branches, more branches, ATMs. So on that side, are you seeing any growth or any plan?

So next year, we should be touching 500 branches. Our branch strategy is about putting up new branches in the locations where we have existing branches. So increasing the concentration is what we do. There are 2 distinct areas we build the branch. As far as mortgage is concerned, this is important, mortgage, SME, secured lending against property is concerned, you need a physical presence. Despite ULI, et cetera, you really do require a physical presence. So then, we go into locations which have a good credit history, where there is strong leadership, put up new flags in completely new areas. But for liabilities, it's still the big 10 cities. You can put 20, 30, 100 more branches in Bombay and still may not be enough. So you take a call on what kind of cost comes into play. So liability is based on more branches in the same location. Asset is based on expanding the footprint. I don't see us going into Northeast or into J&K. But everywhere else, we see more branches coming in. So in a calibrated fashion, 25 to 30 branches every year. That's the way we'd be going ahead with it.

This is Akshat from SMIFS Limited. So actually, I wanted to check, is there any target for BL versus HL? Historically, it was 85 to 15. And now you said that it's 60 versus 40, right?

On sourcing, not on portfolio.

Not on portfolio. So what's the stock number as in...

We haven't yet revealed it, but soon we'll be -- I guess, we'll be revealing it, right? Yes. Yes, we are not.

So do you plan to go back to like historical levels? You have in the past pointed out that PMAY 2.0 might hinder that. But still, I mean, is there any plan to go back to near historical levels?

I think 60-40 we are comfortable with. We should be in the similar kind of range going forward as well. And the reason -- one of the big reasons for that, for not going to 65-35 or 70-30, is PMAY 2.0. It's clearly that because it's right in the sweet spot of where we operate. And it has got so many things going for us. Maximum 11.5% cannot take the -- cannot do BT out for a period of 4 years. If you default, you lose the subsidy. Subsidy given year after year, not as a lump sum, why would you not do that, right? 11.5%, we are okay. That's a yield that you saw, right? You saw the advance when Ravi presented. We're okay with that.

Yes. So -- but on the cost of deposit side, we -- I mean, we have got a very comprehensive idea. But just trying to understand what kind of uplift we will have for like moving further into BL versus HL, right, on the NIMs part?

See, a lot of will get negated. Sorry to be a negative wet blanket here. The reason is every passing month, there is some hybrid deposit. There is erstwhile fixed deposit, which becomes floating. And when it becomes floating, you pass on the repo rate that you haven't passed on earlier. Are you with me?

Yes.

So there will be a dilution of yield on that count as well. So the advantage that you get from a better BL to HL ratio would, in some sense, get negated by incremental loans which are booked with a 2-year or a 3-year hybrid becoming floating now.

Right, sir. So just a follow-up on that, like with this, there will be some impact on RWA density, right? So you are at 49% and you said that you would be looking at like early 50s, right? So is it all coming from this transition?

No, I tend to think that co-lending gold will continue to be a 15% growth only, right? They have 15% -- and I'm sorry, a 20% kind of growth. So they will -- the co-lending gold will continue to grow exactly at the same proportion of the rest of the asset book. So there will not be a massive increase in co-lending. Because co-lending gold is very low capital consumption, you're getting the benefit of it. So the moment it becomes proportionate to the normal organic growth, you don't get any incremental benefit coming through. The incremental benefit will come because of the business that -- normal business that we do dictates a 53%, 54% kind of RWA.

Right, sir. My second question is on deposits. So what are -- I mean, what is the bank doing to kind of grow CASA ratio with -- where we're kind of lagging versus the peers? It's -- I mean, because we are a small bank, so obviously, CASA ratio would be kind of low. But still, what are your plans to grow that and become a slightly 35% or 33%, 34% kind of percentage kind of win?

See, personally, I'm not a believer in CASA ratio. I'm a believer of cost of deposit, okay? Because there are 2 kinds of SA coming and sitting there. One is a term deposit, an INR 50 crore term deposit comes and sits at a 7% SA, right? That is not a SA. That is a term deposit equivalent where the money can go out the next day. At least in term deposit, it stays with you for some period of time and breakage -- if there's a breakage, you get a benefit. So at one end, you have customers who are keeping monies, which they need to use for some specific purpose where the timeframe is not known. They park it -- they park their funds there and get a higher rate. It will improve your SA. But is that the kind of SA you want? What the SA that we want is where the float comes before -- because the flow comes in. So we are activating most of our savings account, telling customers, please use your UPI, use it for this particular purpose, giving inducements. If you electronically use our account, if you use UPI, you get a cash back. Can you imagine this? Every bank, including us is suffering because the UPI transactions have gone through the roof. The technology cost of supporting this has gone through the roof, and we are saying, use UPI, you get a benefit. So we believe that flow will give you a float because that's what you want. You want -- our savings account rate at the lower end, less than INR 1,00,000, it's 1.5% -- or 1.75%? It's 1.5%. That is near current account. We want more and more customers of a less than INR 1,00,000 variety, and they are there. We need to get it activated. The KYC is done, e-mails, mobile, everything there, and they're keeping very low balance with us. We are urging them to use our bank account, making it seamless, making it easy. And that is the way we want to build a savings account book.

Very well, sir. And in terms of credit cost, one of the reasons -- I mean, many banks have low credit cost is like recoveries, which are -- which will dry out at some point, right? So how sustainable are our recoveries because we do have...

I really wish what you say is true because the problem we are facing is we are having slippages. I don't know whether you really look at slippage. [Foreign Language] it's like a never-ending pool [Foreign Language]. So I want to -- I wish we get into that kind of situation. Our slippage is so high, right? See, if you look at non-gold, our slippage is about 2.5%. It should ideally be at 2%, should be less than 2%, ideally. Our recovery is also very good. So when will the dry out happen? When the floor reduces, then the dry out. That's a good situation to have. In fact, that's what we are trying to gun for, right? So within the bank, I will tell you this, we have a campaign where 90 DPD has been replaced by 1 DPD. There is a drive within the bank to move from 90 DPD -- you understand DPD, most of you know. It's days past due. So how many days overdue that is. So moving from 90 DPD to 1 DPD. So the -- you're changing the battlefront, right? Right now, it's a slogan. But at some point in time, we'll see the benefit of this coming through.

Right, sir. All the best.

Not at all. Not at all. We have 3 hands. We still can have a discussion outside, right, yes, but still. Yes, [ Arvind ].

So sir, this was on the operating leverage -- operating ratio that you have given. When we are moving from a LAP kind of a product to an SME kind of a product, OD kind of product, which will have multiple interaction. See LAP is a one-time interaction, you sanction it, and then, you keep getting NIIs. In that, you get a servicing cost, and then, you get a cross-sell and all those potential. So if you were to compare these 2 products on that operating ratio that you have shown, how do they stack up in the medium to long term?

We haven't done it. But what we see is so many -- see, the bank's philosophy is moving from being a one-time lender to a proper banker where lending is only one of the things that we do. So that itself is so compelling. And whenever we've tried it, we have seen sporadically benefits coming through. What we want to make -- do is make it a program and move the needle. 20% of the term loan that we do is -- just an indicator number, don't take it for granted, if we can move 20% of term loan that we do into an overdraft facility, the pressure of runoffs, treadmill effect will go away. Our ability to generate fee -- today, we are a very TPD-dependent recurring fee income thing. We're doing a reasonably good job of it. But we need more streams on the board. We need the trade income to kick in. But how do you get a trade income from a LAP customer [Foreign Language]. You have to have an operational facility. So [Foreign Language] even if he doesn't want an overdraft facility, have a current account. Life becomes easier. That's what you're driving it. So it's a bit of a seismic shift, right? And that's important because 44% you saw, at least in June of who our competition is, is NBFC and HFC. Do you want me to fight the battle on exposure and then create an NPA later on? Do you want me to fight this battle on price and create a NIM problem later on? When we have a third alternative there, which is overdraft, not for every customer, but let's say, for the bigger customers, very much there. And that is what we want to do. So haven't gotten into the operation. If you want...

Is it something we can work out?

I really don't know what the operations, but there are so many compelling reasons why we should be doing this. Not only we, most banks who have that ability should be doing that.

And sir, second was on the deposits. When we are reducing the TD spread with large banks, clearly, earlier, the rate itself was a selling point. How are you changing the strategy? Anything -- you may have partly covered, but how you get that working?

When I don't know the answer, I give it to Pankaj. Pankaj is our -- heads branch banking.

Okay. So many questions on the deposits. I was also already getting worried about next year, but here is it. I'll give you some perspective on this. See, there are a few things which we have learned in the last few years on the deposit front. Some of it, we have executed. Some benefit has come because of the repo rate cut, and all banks have reaped those benefits, not only us, right? That trend we see. And then Praveen spoke about the book, the way it is, and we have next 3, 4 quarters that benefit will come to us. But that's the math of it. I want to give you a bit of a glimpse on what we do in branch banking. One, as part of cross-sell customer 360, one of the franchise within the system, which understands engaging with customers very well, is Branch Banking. Why? Because Branch Banking acquires customers, acquires savings customers, acquires current account customers, cross-sells term deposit, cross-sells health insurance, cross-sells life insurance, cross-sells gold loan, same Branch Banking, collects gold loans, okay, the overdue interest, interest due and all and also cross-sells trade products, bank guarantees, LCs and all. So one competence, which clearly we have is the ability to have multiple conversations with the customers that we acquire and which are there in the portfolio. That is one part. Second part, and I keep on thinking genuinely since you're asking this question, but I myself keep thinking, how is some other bank acquiring term deposit at 50 bps lower than what we are offering, okay? How is an SBI or an Axis or an ICICI or many other banks acquiring 25 bps lower than us, 30 bps, 40 bps lower than us. They're also doing something. I've learned at least part of the thing. One, own the neighborhood where you're operating. If you have a relationship, I mean, many of you have fixed deposits in various banks, I'm sure you have. How many times have you shifted your term deposit for 25 bps? How many times? On renewal of your term deposit, how many times have you figured out, okay, [Foreign Language] 25 bps, 30 bps [Foreign Language] I want to break it and shift? Many of you would not do it. You know why? Because there is some relationship manager who is engaging with you, not only for term deposit, but for various other banking services. That is reason number one. How well we engage with the customers through, and we have started something like -- we have done programs like Ek Mulaqat Aur Kuch Baatein. This is a signature program for us. Along with Praveen and management committee members, we go around the country and meet up with our 150 top customers in various cities, be it Mumbai, Pune, Hyderabad, Chennai, Bhubaneswar, Indore, Bhopal and all. What impact does it have? It has 2 impacts. One, we understand the customers better. Lots of insights come to us in terms of how do we make our Branch Banking engagement better, relationships build up and all. And second, multiple programs happen at a branch and cluster and regional level, which we call, because you asked the question, Ek Shaam Aapke Naam. So that engagement itself has given us a lot of confidence that we can run this engine much better as a structure. If you hear -- if you saw that treasure within, we have so many customers who can -- for example, an INR 25,000 fixed deposit customer, trust me, doesn't hunt for rate of interest. So a few things like this.

2, 3 things I want to tell you. One, we talked about the Niyo base. See, for 25 bps, you may not transfer. But for 60 bps, you may transfer. And why am I saying 60 bps? Why not 50, why 60? Do you remember the slide? The 3 largest private sector banks and public sector banks average is 60 bps. Most of our Niyo customers bank with a large -- the big, large customer base. They have a bank account with us, seamless, no KYC, no biometric, no video KYC, no nothing. Give money, get rate. At the lower rate, they're getting 60 bps more than what they're currently getting. And guess what, they have had a superior international experience with us. Why is it not compelling, number one? Number two, secured credit cards, while it's called credit cards, it has got a holiday period, you get interest on it. If you delay, it's a liability proposition. It's a massive liability proposition. Hopefully, a year from now, when we meet again -- we'll meet even before that, but a year from now when we meet, that could be a big mover for our savings account. Third is the set of the analytics that we are driving in. It's not the balance that you keep. It is the person you are, and we already know who you are, how much you can keep. To my mind, it's not a strategy challenge. Is there a challenge? Yes. It's an execution challenge. And how well we execute it? You'll learn in a few quarters.

This is Krishnan from HDFC Securities. So partly 2 things, what Jai said, what Nitin said as well, you seem to be indicating that you have exhausted most of the low-hanging fruits because you're nearly there and you're saying in 2 years, we are likely to remain more or less there. I mean, most of the gains seem to have already -- so at least the low-hanging fruits seem to have gone. So -- and yet I thought the productivity gains and efficiency gains are yet to play out. Given what you mentioned in the Q2 call, Praveen, you said we are high on slippages. But instead of focusing -- and about 80% of that money does come back. So why should it come -- why should it take nearly 3 months to come back? Why not -- and so basically free up -- so I'm just saying your ceiling should be higher. I mean, from whatever you have said so far, you're still not reaching for the stars, very honestly, right? So I believe your ceiling can actually be higher. Why, why not?

I also believe so. I also believe that is much higher. But the indication I'm giving to you is this. And when we reach this indication, we'll give you more. Much higher. Much, much higher.

I guess the other thing that you mentioned was the cost of chasing delinquencies is fairly high today, right? So your OpEx -- I mean, while you are focused on cost to assets, to my mind, you're still running almost like a G-sec portfolio, right, which is why the cost to income is as elevated as it is, right? I mean, I'll give you a simple example. Supposing we both were working at 2.5% to assets, right? So on an INR 100 asset, you are running at 2.5% cost, I'm running at 2.5% cost, right? But on that 2.5% cost, if I'm earning only 5%, right, my cost to income is about 50%, right? If you were earning INR 6.5, your cost to income is far better, right? Our sense is probably you should be also looking at cost to income. You can't control everything, but you also need to look at cost to income. I think that...

Look at the other perspective also, right? I buy your point. Look at the other perspective. Suddenly, you get some windfall gains, and in banking, you do get windfall gains, right? You never get a credit for that because that brings down the cost to income to some lower levels.

I'm talking sustainable income. So instead of...

So you see blips coming through. I'm just saying I want to modulate that blip by looking at 2 critical parameters, numerator, which was actual cost, and denominator was actually averages. So blips are removed. That's all I'm saying. So that if you want to compare, clearly, the comparison comes through in terms of what are you spending and on what you are spending that comes through. That's it. On the low-hanging fruit, in the last 18 months, I haven't seen one -- there's nothing called low-hanging fruit. There is all -- everything is effort. It doesn't -- it hangs upwards. Genuinely, there's nothing called low-hanging fruit. Everything requires effort, right? And it is a question of which do we choose from a sustainability perspective. That's it. So let me try and explain this to you. Like everything is -- everything that we do is a trade-off. There is no clear-cut black and white, right? You can -- it's very simple if you play 2 out of the 3 triangulates. If cost of deposit and growth alone was a problem, we can play these 2 games, bring low cost of deposit and get growth of 20% and build 3-month deposits, right? We will not do that. And whatever happens, we will not do that because there is a sense of purpose for the bank, which needs all the 3 to be met. We need long tenure deposit, which are by definition costly because there's a risk element attached to it. So within the constraints that we have, which is the best way of moving this? So while it may look like a low-hanging fruit, there's always a cost to pay. While we talked about technology, right, how technology is driving down cost, I can easily put up another slide saying how technology is driving up the cost, the kind of money that we pay on cybersecurity, the kind of money that we pay on UPI, the kind of money -- there is a -- I know it's a recorded call, but there is a licensing norms change from software to user, suddenly, you don't have a choice. There is no other player, can you imagine? Instead of charge being on the server, per server, you are paying something, you move to per user you're paying, whether the user is using it or not, because your 11,000 employees, you'll land up paying something, right? And you're already stuck, you're in bed with that kind of technology. You can't get out of it. So there are enough costs which are going up also. So while you -- on the My Docs and paper and courier, et cetera, you do some hard work and bring it down. There is so much of investment going in there, and you can't compromise on cybersecurity. So what I'm trying to say is, yes, there are competing costs. One good way of looking at it is are we -- for the kind of growth that we are getting, are we growing less than proportionate to the kind of growth? Are we growing less than proportionate to the income that we're getting? Is our operating leverage getting better? Would you like to reduce this flow and then recovery? 100% yes, it's waste of money, waste of time, waste of effort. And you get atherosclerosis just by looking at it because it has slipped. That's a fact. On fourth, it has slipped. On first, it's slipped. You want to wait until '27, '28 to get -- to recover the money back, till then you're palpitating. Why do you want to do that? I mean, the same question you're asking me, I'm asking you, right? So there is merit. There is wastage. Is there room? There definitely is room. I genuinely think reaching for the star is not a 1% or -- it's not a 13.5% or a 14.5%. 13.5% and 14.5%, in our opinion, are milestones in our journey. And I've given you a 2-year perspective, not really -- I haven't given you a 2030 and beyond perspective. So there clearly is -- it's important for our credibility to talk about our confidence on achieving something, which we haven't achieved so far, in a time frame which we haven't defined so far. That's it. That's our objective for the same. And it will change. The moment we touch that, I'm reasonably confident, hopefully, we'll touch that, then we go to the next milestone. And lastly, if your ambition is such that it is within your grasp, it is not an ambition, we will forever reach this -- reaching out for the star. We'll never reach the star. That's what we want to do. When we reach our next milestone, there's another milestone which we'll go for. There's so much of ambition in the company. There is so much of opportunity in this company. That's what we are here for.

Krishnan, I think we have to end, interest of time. If you have questions, you can come back to us. We would answer it separately because it's getting late. And one announcement, as a part of compliance and information symmetry, these presentations have already been uploaded on website of BSE and NSE. And video recording of the discussions today will be appearing on exchanges sometimes tomorrow link for it. So if you decide, you can go through it. And for questions, you come back to us. Thank you for being with us for such a long -- I think almost it is 8:30. We'll keep meeting going ahead. Thank you. Thanks a lot. You can join us for dinner. You can hit the bar. Thank you.