IDBI Bank Limited (IDBI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. In terms of Section 104 of the Companies Act 2013, read with Article 154(4) of the Articles of Association, I, M.R. Kumar, Chairman of IDBI Bank, welcome all members of the bank and other participants at the 16th Annual General Meeting. As permitted by the Ministry of Corporate Affairs vide circulars dated 8th April, 13th April and 5th May 2020, and by SEBI vide circular dated 12th May 2020, the AGM is being held through video conference mode. I would first like to take you through important instructions for participation in the meeting through videoconferencing. [Operator Instructions] As informed by the Company Secretary, since the requisite quorum for the meeting, including a representative of LIC, is present, I call the meeting to order. I am attending the AGM through VC from LIC Head Office in Mumbai. My other colleagues on the Board who are attending the AGM through VC from their respective locations in India are Shri Rakesh Sharma, Managing Director and CEO; Shri J. Samuel Joseph, Deputy Managing Director; and Shri Suresh Khatanhar, Deputy Managing Director, attending from IDBI Tower, Mumbai; Ms. Meera Swarup, Government Nominee Director, attending from New Delhi; Shri Rajesh Kandwal, LIC Nominee Director, attending from Gurugram, Haryana; Shri Gyan Prakash Joshi, Independent Director and Chairman of the Nomination and Remuneration Committee, attending from Ramgarh, Uttarakhand; Dr. Ashima Goyal, Independent Director and Chairperson of Stakeholders Relationship Committee, attending from Mumbai; Shri Bhuwanchandra B. Joshi, Independent Director, attending from Mumbai; Shri Samaresh Parida, Independent Director and Chairman of Audit Committee, attending from Mumbai; Shri N. Jambunathan, Independent Director and Chairman of IT Steering Committee, attending from Mumbai; Shri Deepak Singhal, Independent Director, attending from Mumbai; and Shri Sanjay Gokuldas Kallapur, Independent Director and Chairman of Risk Management Committee, attending from Hyderabad. Apart from the directors, the representatives of banks, Statutory Central Auditors and Secretarial Auditors are also present in the AGM through video conferencing. The notice convening 16th AGM and the annual report for FY 2019-'20 were e-mailed to members of the bank on July 15, 2020, as per the direction of Ministry of Corporate Affairs and SEBI, which also dispensed with the requirement of mailing physical copies of AGM notice and annual report to members this time due to COVID-19 pandemic. The notice of AGM having been mailed to members in time may be taken as read. I now proceed to read my statement. Dear shareholders, the annual report, including the audited statements of accounts, for the financial year FY 2019-'20 is already with you, and I shall, with your permission, also take them as read. Before I go into the highlights of your bank's performance, I would like to briefly outline the state of the economy, in general, and the banking sector, in particular, during FY 2019-'20 to meaningfully assess and comprehend the strategy and operational performance of your bank. Developments in the Indian economy and the banking sector. FY 2019-'20, proved challenging on the macroeconomic front, as progressively weakening private consumption expenditure and investment demand dented the economic growth for a better part of the year. Barring agriculture and allied activities in the public sector, the pace of economic activity was subdued across all other sectors and particularly in the industry and services sector. The bigger dampener to the economy's revival prospects came about towards the end of the financial year when, as an emergency measure to counter the impact of COVID-19 outbreak, a 2-month nationwide lockdown was announced pan-India in March 2020 that brought the economy to a complete halt and established a new normal in lifestyle and social mores. The nation has since moved to a gradual and geographically differentiated unlock phase from June 1, 2020, with a view to revitalize the domestic economy through a provision of essential enablers without compromising on the basic tenets of a healthy and safety protocol to combat the unrelenting pandemic. Responding to the challenges posed by such an unprecedented situation, the government and the Reserve Bank of India have also announced a number of initiatives aimed at mitigating the impact of the lockdown and reinvigorating the sagging economy and its distressed sectors. The government announced a comprehensive stimulus package. There is the Atmanirbhar Bharat Abhiyan, aggregating to over INR 20 lakh crore to support the affected segments of the economy, such as MSMEs, small traders, persons engaged in agriculture and allied activities, et cetera, as well as sector-specific schemes to alleviate the miseries of the economically disadvantaged sections of the population. The RBI, which had already maintained an accommodative monetary policy stance with a cumulative repo rate cut of 135 basis points between February 2019 and the onset of the pandemic in early March 2020, changed gears and cut the policy repo rate by a further 115 basis points thereafter through August 2020. The conventional and unconventional monetary policy and liquidity measures announced by the RBI, equivalent to about 4.7% of 2019-'20 nominal GDP, have been aimed at restoring market confidence, alleviating liquidity stress, easing financial conditions, unfreezing credit markets and increasing the flow of financial resources for productive deployment. The broader objective was to mitigate risks to the growth outlook while preserving financial stability. A broad segment of informed opinion believes that the macroeconomic impact of the pandemic, which is far from subsiding, is threatening to be more disruptive than earlier expected. Overall and sectoral performance in Q1 2021 reflects the adverse impact of prolonged lockdown and slower recovery than anticipated in April 2020, marked by slump in industrial activity, softening price pressures due to weak demand, narrowing of merchandise trade deficit in view of the prolonged lockdown. The downtrend in the Indian economy is expected to linger on during Q2 FY 2021 and for most part of Q3 FY 2020-'21 due to social distancing measures and temporary labor shortage. A measure of economic revival is expected around the last quarter of the current financial year as supply lines get normalized and demand gradually revives. Nevertheless, downside risk to domestic growth remains significant. International Monetary Fund has forecast India's economy to contract by 4.5% in 2020, even as global economy faces a likely contraction of 4.9% with only China expected to register nominal positive growth. The banking sector reflects the state of the economy, and the steps taken by it is indicative of how to overcome the challenges. Consequently, while there were no immediate impact on the Indian banking sector for FY 2019-'20 on account of COVID-19 epidemic, which showed up around March 2020, it is anticipated that going forward, the disruption to economic activities due the COVID-19 outbreak would adversely impact certain fundamentals of the banking system in varying degrees. The economic impact of the pandemic due to lockdown and anticipated post-lockdown decline in economic growth may have some adverse impact on asset quality. Accordingly, the minimum risk capital requirements of banks, which are calibrated based on historical loss events, may no longer be considered sufficient to absorb the losses. Hence, it is imperative that the approach to risk management in the banks should be in tune with the realization of more frequent, varied and bigger risk events than in the past. The liquidity measures and regulatory concessions granted by the RBI with respect to loan moratorium and asset classification would, no doubt, provide some relief to banks in the interim. Nevertheless, once the temporary relief of moratorium on loan repayments winds up at end August 2020, the specter of a bulge in NPAs looms large. There is also a pressing imperative to initiate some form of capital conservation, particularly keeping in mind that fresh NPAs from March 2020 cannot be referred to NCLT under the Insolvency and Bankruptcy Code, IBC, framework for 1 year, which would backload resolution of such cases through this route. Nevertheless, your bank derives adequate comfort in the fact that moratorium has been largely extended to salaried borrowers with proven track record and companies whose viability have been stress-tested to minimize the downside risk once moratorium period elapses. Some borrowers have already started making payments in the interim. I shall now dwell at some length on the business strategy adopted by our bank during FY 2019-'20 and how these successfully translated into relevant performance indicators during the same period. While the operating environment during FY 2019-'20 was not conducive for business, your bank continued to steadfastly pursue its strategic priorities. In consonance with its desired positioning as a retail-focused bank, your bank undertook initiatives to ramp up its retail, agriculture and MSME asset book while simultaneously limiting its corporate exposure in a bid to achieve a diversified and granular asset mix. Concurrently, on the liability front, your bank focused on increasing the share of its low-cost deposit base, that is, CASA deposits, and retail term deposits in its total deposits. Complementing its overall strategy, the bank strived to remain relevant by introducing new products as well as revamping its existing offerings to address the evolving needs of its customers. At the same time, the bank stepped up its data analytics capabilities to ensure need-based targeting of products and services and thereby improve its sales efficacy. The bank's varied initiatives were guided by its intent to ensure excellence in service across all its channels and deliver optimal customer satisfaction. Recognizing the critical importance of asset quality in ensuring a sustained turnaround and a profitable future growth path, your bank has been aggressively pursuing recovery and upgrade of its delinquent asset portfolio under legal and regulatory routes to resolve the existing stress in its asset book. Furthermore, dedicated teams have been set up to drive recovery in corporate and retail portfolio. As a proactive measure, the bank has strengthened its credit monitoring mechanism to prevent slippages in asset quality going forward. I shall not go into the granular details of various initiatives taken by the bank during the year as they have already been explained at some length in the Director's Report and Management Discussion and Analysis sections of the annual report. However, let me emphasize that despite FY 2019-'20 being a year of unprecedented challenges, your bank was able to successfully weather the adversities and improve its performance on several fronts through these consciously crafted strategic endeavors, ably complemented by committed efforts of the entire IDBI Bank team. I draw your attention to some key highlights of your bank's performance during FY 2019-'20, which provides a fair indication of the progress made under various heads. Deposits. Total deposits aggregated to INR 2.22 lakh crore as on March 31, 2020, of which CASA deposits stood at INR 1.06 lakh crore or 47.74% of total deposits, marking an improvement from INR 96,730 crore or 42.54% as on March 31, 2019. While retail term deposit book, a focus area, grew by 5.58% to almost INR 77,000 crore as on March 31, 2020, the share of high-cost institutional or bulk deposits was consciously reduced to 17.64% as of March 31, 2020, from 25.39% as on March 31, 2019. These developments helped the bank in reducing its cost of deposits to 5.08% for FY '19-'20 from 5.5 -- sorry, 5.44% for FY 2018-'19 and cost of funds to 5.44% for FY '19-'20 from 5.78% for '18-'19. Notwithstanding the elevated level of NPAs, your bank was able to improve its net interest margin, that is, NIM, to 2.61% for FY 2019-'20 as compared to 2.03% during FY 2018-'19. Advances. The bank's net advances stood at INR 1.3 lakh crore as on March 31, 2020, as compared to INR 1.47 lakh crore as on March 31, 2019. The yield on advances was higher at 9.56% for financial year '19-'20 as compared to 8.82% for FY 2018-'19. Retail to corporate share in total advances stood realigned to 56:44 as on March 31, 2020, as compared to 51:49 as on 31 March 2019, in keeping with the bank's objective of emerging as a retail-centric bank. The increase in share of retail advances was largely driven by a 9% growth in your bank's structured retail assets portfolio. The shift towards a more retail-oriented portfolio mix, coupled with strategic capital conservation measures, aided a reduction in the bank's risk-weighted assets, RWA, to INR 1.59 lakh crore as on March 31, 2020, from INR 1.83 lakh crore as on March 31, 2019. Priority lending -- priority sector lending achievement. The bank's priority sector advances amounted to INR 77,586 crore aggregating to 41.69% of adjusted net bank credit, exceeding the regulatory PSL target of 40%. Capital. The bank's capital to risk-weighted assets ratio, CRAR, stood at 13.31% and Common Equity Tier 1, that is, CET 1 ratio, including CCB ratio at 10.54% as on March 31, 2020. Thus, the bank achieved all regulatory capital ratios as per Basel III norms prescribed by the Reserve Bank of India. Asset quality. While gross nonperforming assets, ratio of the bank remained elevated at 27.53% as on March 31, 2020, as compared to 27.47% as at March 31, 2019, net NPA ratio improved significantly to 4.19% as on 31st March 2020 as compared to 10.11% as on 31st March 2019. The reduction in NNPA ratio is attributable to strict monitoring of first-time NPAs and robust recovery and upgradation efforts, along with prudential provisioning. The bank's first-time NPAs nearly halved to INR 8,384 crore in '19-'20 as compared to INR 15,281 crore in '18-'19. Recovery from written-off cases improved to INR 827 crore in '19-'20 from INR 468 crore in '18-'19. The FTNPA recovery plus upgradation ratio also nearly halved to 97% during '19-'20 from 184% the immediately preceding financial year, implying that recoveries and upgrades more than covered the buildup in first-time NPAs. The bank's provision coverage ratio, that is PCR, improved to 93.74% as on March 31, 2020, from 82.88% as at -- on March 31, 2019, arguably one of the highest in the banking industry. Profitability. The bank posted a 26.16% growth in operating profit to INR 5,112 crore in FY '19-'20 as compared to INR 4,052 crore during FY '18-'19. While the bank posted a net loss of INR 12,887 crore for the full FY '19-'20, it was lower than the net loss of INR 15,116 crore registered during FY '18-'19. Progress under Prompt Corrective Action, PCA, framework. The strategic endeavors of your bank have also been led by a resolve to improve its financial health on a sustained basis to provide an enabling platform for an exit from the Prompt Corrective Action framework imposed on it by the RBI since May 2017. The serial improvement in its financial and operational performance in the latter part of FY '19-'20 and gains of which were consolidated further in Q1 FY '20-'21, about which I shall talk about shortly, gives us the confidence that your bank will be able to meet the RBI's expectations in this regard, hopefully, in the current financial year itself and position itself yet again as a full-service bank to deliver optimum value to all stakeholders. Synergies with Life Insurance Corporation of India. With the Life Insurance Corporation of India, LIC, acquiring majority stake in your bank in January 2019 and becoming its promoter, your bank has emerged as a part of a first-of-its-kind financial conglomerate and one-stop solution for a wide gamut of banking and insurance products for the benefit of all its stakeholders. The mutual synergies emerging between the 2 entities have resulted in the bank acting as a corporate agent for LIC and distributing the latter's products as well as facilitating premium collection, among other facilities. Your bank intends to leverage upon and deepen these synergies to grow its business and income going forward. Operational and financial performance highlights during Q1 2020-'21. I am pleased to state that your bank has consolidated the gains made during Q4 FY '19-'20 and continued to record an uptrend in most key performance indicators during the recent Q1 FY 2020-'21, which was released on July 28, 2020. The bank overcame daunting odds to post a net profit of INR 144 crore against a loss of INR 3,801 crore during a year ago period. Operating profit recorded a year-on-year growth of 39% to clock INR 1,326 crore. Various contributory factors included a sharp uptick in NIM to 2.81%, a 440 bps growth in low-cost CASA ratio to 47.55%, a vastly improved NNPA ratio of 3.55% down from 4.19% at end of March 2020 and from 8.02% during the same period last year. PCR at 94.71% was arguably the highest in the banking industry. FTNPAs pared down to a modest INR 69 crore during Q1 FY 2020-'21 from INR 727 crore in the immediately preceding quarter, which is the recognition of the close monitoring and assiduous recovery efforts from the stressed portfolio of the bank. Both Tier 1 capital at 10.59% and CRAR at 13.37% were comfortably above levels prescribed by the RBI. Cost of deposits at 4.65% as well as cost of funds at 4.96% reduced both on a year-on-year as well as on a quarter-on-quarter basis, while yield on advances at 9.54% increased 92 bps year-on-year and was almost on par with Q4 FY '19-'20 levels despite muted credit offtake. This positively impacted both net interest income and NIM. Our focused approach towards cost-cutting measures led to a sharp reduction in operating expenses from Q4 FY 2019-'20 levels, inter alia, leading to a vastly improved cost-to-income ratio of 52.25% in Q1 2021 from 58.48% during the same quarter of FY '19-'20. Retail centricity of the bank continues to show traction with an uptick in relative share of Retail to Corporate in Total Advances at 57 point -- 57:43 as at end June 2020, as compared to 52:48 as at end June 2019. Challenges and prospects during the year and beyond. The bank's core mission in the balance period of FY 2020-'21 is to future-proof the gains achieved in the last 2 quarters through appropriate strategic reorientation of its business model and delivery channels to navigate through the challenges in its operating environment. The bank has initiated the process early into FY 2021 by revamping its organization structure, operations and business practices with specialist support to ensure a focused approach to the envisaged strategic priorities and position itself as the bank of the masses. Simultaneously, recognizing the challenges posed by the COVID-19 outbreak, bank ensured that both employee and customer safety as well as uninterrupted business activities and delivery were served through assorted means, including but not limited to productivity -- productively leveraging its technology prowess. Apart from ensuring that most branches are functional with proper COVID-19 protocols in place for in-person servicing, where essential, the bank redirected key business processing activities to alternate locations within the country for uninterrupted and time-bound processing of customer requests. Customers were encouraged to use digital and other alternate channels to carry out their banking transactions. To ensure safety of employees, options like work from home with access to the bank's internal network through virtual private network, VPN, were provided. Staff members reporting at the workplace, albeit with numbers suitably calibrated to ensure decongestion and adherence to local administrative directives, are being regularly guided on social distancing and other hygiene factors as well as protocol to be followed in case any staff tests positive for COVID-19. Your bank, as an employee-friendly measure, has constituted quick response teams at its corporate office and zones pan-India as well as a special committee at its corporate office to monitor the situation, provide regular feedback to the management, coordinate with outside agencies and provide financial help and support to staff for medical treatment and hospitalization as needed. Besides, as a responsible corporate citizen and as a testament to its commitment in the fight against the pandemic, the bank's workforce has contributed INR 5.12 crore towards the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund, also known as PM CARES Fund. The bank has also compassionately addressed the felt needs of its customers in these trying times. To provide financial relief to its customers, your bank has extended a moratorium on payment of all installments falling due between March 1, 2020, and August 31, 2020, for various categories of loans to the borrowers who opted for it. Recognizing the liquidity constraints confronting MSMEs, your bank has also extended additional credit limit to MSMEs affected by COVID-19 after careful assessment of their underlying viability. However, the bank is also taking preemptive measures, including sensitizing customers about higher financial obligation that would arise due to the moratorium, which they have to honor during the current financial year, and encouraging them to either opt out of the moratorium or prepare them to commence repayment from September 1, 2020, without fail. At the strategic level, the COVID-19 outbreak has compelled banks to chart newer paradigms, some of which would well outlive the pandemic era. IDBI Bank, like several leading banks in India, is exploring the possibility of automating several routine activities, which may help in reorienting workforce at branches and front offices towards more productive sales and business sourcing functions. IDBI Bank is taking a holistic view of the work-from-home business model and its advantages before deciding on whether it can be introduced in a limited way even after the COVID-19 crisis withers away, and life and business returns to some sort of normalcy in the foreseeable future. The bank is looking at the possibility of significant gains in terms of cost saving and operational efficiency through this route as also because it allows for a better work-life balance and improved productivity. Simultaneously, the bank would continue to invest in technology to enable greater digitization of processes, including account opening process, which could potentially benefit the banks in terms of economizing costs, driving higher operational efficiencies as well as improving turnaround time. This will also enable the bank to redeploy staff to alternate productive avenues. In terms of business, your bank has been increasingly looking at the retail loan segment to drive its business growth. However, in view of the observed tendency among customers to cut down on discretionary spends in the current COVID scenario, this segment might witness a slowdown. In contrast, certain segments, such as MSMEs, small traders, et cetera, may increasingly seek financial assistance from banks to revive their operations. In such a situation, banks like IDBI Bank would need to appropriately rethink their lending strategies, commensurate with their risk appetite and assessment of the overall operating environment. At the same time, the prevalence of uncertainty about the future has pushed customer preferences towards bank deposits despite southward movement in interest rates, considering the liquidity and safety they provide. This presents an emerging opportunity for banks like IDBI Bank to raise low-cost deposits as well as to enhance wallet share by providing wealth management solutions and thereby augment business revenue and profitability. In view of the economic impact of the pandemic, the bank will have to attune its risk management framework to account for varied and bigger risk events that has been traditionally or historically used to account for such massive disruptions. I now summarize the major components of the business strategy, which is already in motion. As part of this road map, the bank will continue to move towards a retail-oriented business mix for a sustained and profitable growth trajectory. At the same time, the bank will continue to take initiatives to ramp up the share of low-cost CASA and retail deposits. As an enabler to this strategic vision, the bank has been investing in data analytics and technological upgrades to drive better customer retention and deepen the customer base. Drawing upon its experience in the past, the bank will adopt stringent credit appraisal and monitoring standards to ensure growth in good quality asset portfolio. Given that the credit demand may remain muted during FY 2020-'21, the bank will target maximizing fee income by focusing on cross-sell opportunities for various segments of customers as well as leveraging the extant synergies with LIC. To improve its operational profitability, the bank will strive to contain its cost of funds, cost of deposits as well as operating expenses while boosting employee productivity. Underpinning these initiatives, the bank has been focusing on strengthening its risk management, corporate governance and regulatory compliance framework to boost its internal defenses against external shocks and lend it operational stability over a longer time horizon. The bank has been taking all possible steps for ensuring a return to a profitable growth path and the results for Q4 FY '19-'20 and Q1 FY 2020-'21 is a testament to its success in this regard. The turnaround achieved by the bank so far validates the efforts put in by the bank's management team and, more importantly, the workforce, and it gives me the confidence to state that your bank is firmly on the trend path for a sustained turnaround in its business, bottom line and much better prospects going forward. I must, however, submit that the successful outcome, as reflected in the bank's performance parameter so far, would not have been possible without the trust and support that you as shareholders of the bank have shown in your bank's ability to successfully overcome its adversities, several of which arose from legacy issues. I would urge you to continue to exhibit the same level of trust and support towards our current and future endeavors, which will further motivate your bank's entire team for meeting various challenges successfully. I would like to thank our valued shareholders personally and on behalf of the Board for your continued trust in your bank. I express my gratitude to the Government of India, all statutory and regulatory authorities for their continued timely support and valuable guidance. I would also like to put on record that your bank truly values the continued patronage of its esteemed customers. I convey my sincere thanks to the Board of Directors of the bank for their wise counsel and unstinted support. Lastly, but not least, I place on record the bank's deep appreciation of the commitment, sincerity and drive exhibited by all the employees in helping effect a sustained turnaround in bank's performance and braving all odds in this trying environment to ensure that the bank continues to be a trusted brand, adding lasting value for all its stakeholders. Thank you, ladies and gentlemen, for your time and attention. Thank you. So let me repeat. There are no qualifications, observations or comments in the statutory auditors or secretarial auditors' reports for '19-'20 on the financial transactions or matters which have any adverse effect on the functioning of IDBI Bank, which are required to be read before the AGM and be kept open for inspection of any member in terms of Section 145 of the Companies Act 2013. The AGM notice contains a total of 10 items of business, with the 3 items being ordinary business items and the rest 7 items being special business items. Item 1 seeks adoption of audited financial statements, including consolidated financial statements of the bank for the year ended 31st March 2020, along with reports of Board of Directors and auditors thereon. Item 2 is for reappointment of Shri Rajesh Kandwal as rotational Director during his tenure as LIC Nominee Director who retires at this AGM and, being eligible, offers himself for reappointment. Item 3 seeks to authorize the Board of Directors to appoint or reappoint Statutory Central Auditors of the bank and Branch Statutory Auditors for bank's DIFC Dubai branch for FY 2020-'21 as per the approval of RBI to be received in this regard. Item 4 seeks to authorize the Board of Directors to raise equity share capital aggregating up to INR 11,000 crore through public issue, rights issue, QIP, ESPS, ESOPs and/or on private placement basis depending upon capital requirement for the bank. Item 5 seeks alteration of Articles of Association of the bank in compliance of RBI's directions to bring them in line with RBI guidelines for private sector banks. Item 6 seeks to appoint Ms. Meera Swarup as rotational Director during her tenure as Government Nominee Director of the Board. Item 7 seeks approval for the appointment of Shri J. Samuel Joseph as Deputy Managing Director and as a rotational Director for a period of 3 years with effect from September 20, 2019, at a remuneration approved by RBI vide letter dated September 04, 2019. Item 8 seeks approval for the appointment of Shri Suresh Khatanhar as Deputy Managing Director and as a rotational Director for a period of 3 years with effect from January 15, 2020, the remuneration approved by RBI vide letter dated January 9, 2020. Item 9 seeks to appoint Shri Anshuman Sharma as a rotational Director during his tenure as Government Nominee Director on the Board. And the last item 10 seeks to approve pensionary benefits to DMDs and revised compensation structure for MD and CEO and DMDs, subject to the approval of RBI. All these 10 resolutions have been recommended by the Board of Directors for approval of shareholders. In terms of Standard 7 of the mandatory secretarial standards on general meetings notified by Ministry of Corporate Affairs, since all 10 resolutions have been put to vote through remote e-voting and e-voting during the AGM, the formal proposing and seconding of these resolutions is not required. In terms of the provisions of Section 108 of the Companies Act 2013, read with Rule 20 of the Companies Management and Administration Rules 2014, IDBI Bank provided remote e-voting facility to the members and beneficial owners of shares. The e-voting commenced on Wednesday, August 12, 2020, and ended on Sunday, August 16, 2020. The e-voting was disabled at the end of the said voting period in compliance with the provisions of Rule 20 of the said rules. The bank has appointed Ms. Aparna Gadgil of M/s. S.N Ananthasubramanian & Co., practicing company secretaries as scrutinizer for conducting the e-voting. A live streaming of this meeting is being webcast on NSDL's website. The bank has taken all requisite steps to enable members to participate through VC and to vote on the items of business being considered at this AGM. Since the AGM is being held through video conferencing as permitted by MCA, the provisions relating to appointment of proxies by members are not applicable. These statutory registers as required under the Companies Act 2013 are open for online inspection of the members. Members who have not cast their vote earlier through remote e-voting can cast their votes now during the course of the AGM through e-voting facility, which has been enabled again. I now request Shri Rakesh Sharma, MD and CEO, to take over the question-and-answer session.

Dear shareholders, good afternoon. So I will now request the shareholders by -- in the sequence in which they have registered their names for raising the questions. [Operator Instructions] So on all 10 resolutions given in the AGM notice, the questions will be asked. The e-voting is being kept open until 15 -- so the first shareholder who has to ask the question is Mr. Mukesh M. Chandiramani. Shri Mukesh Chandiramani?

He's not there.

It seems Mr. Mukesh M. Chandiramani is not able to ask his question, so they can send the questions via e-mail later on, and their questions will be replied by us. The next shareholder who has to ask the question is Mr. [ Gyaneshwar K. Bhagwat ].

He's also not there.

So he is also not there. So third shareholder is Mr. [ Aspi Bhesania ], Shri Aspi Bhesania.

Yes, sir. Can you see me?

We can hear you. We can see you also, yes.

Sir, I congratulate the management on very good results in the first quarter. The PCR of 94% is just very good. No other bank has got 94%. The NIM for the third quarter '20 -- March '20 quarter was 3.80%, whereas 2.81% for quarter June '20. Why it has come down by 1? The IDBI is to sell 27% in life insurance company for INR 575 crores. The INR 575 crore in absolute terms looks small when this HDFC and all are selling and SBI is selling in thousands of crores. Sir, why our treasury profit for Q1 is only INR 74 lakhs? With interest rates going down, treasury prices have gone up. Most banks are showing huge treasury profits, whereas we are not showing any treasury profits. Sir, where will future growth come from? Because corporates, most of them are not taking loans -- the good ones are not taking loans and whoever is taking loans is not willing to repay. Same is the case with MSMEs. Most of them are dead and still they are coming to take loans based on the promises made by our Finance Minister. And retail also, they are losing their jobs, and there's so much of problems in the economy. So where will the growth come from? Even RBI doesn't want the bank money. Sir, I would prefer a rights issue at a reasonable price rather than going for IPO -- FPO. Sir, I have already done e-voting. Sir, I don't think it was a wise decision to contribute to PM CARES Fund. Would it not have been better had our employees help COVID patients and migrant workers with food? I hope our bank didn't force any employee to make voluntary contribution to PM CARES Fund. I've heard that many public sector companies have forced their employees to make voluntary contributions. Sir, I hope you answer. Thank you, and all the best.

Thank you, Mr. Aspi Bhesania. We'll answer the questions at the end after everybody has raised the question. So next shareholder who has to ask a question is Mr. [ Praful Chavda ], Mr. Praful Chavda.

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[Foreign Language] Now the next shareholder is Mr. [ Hari Ram Choudhary ]. Mr. Hari Ram Choudhary.

I am Hari Ram Choudhary. I am putting out my video. Just a minute. My video there. Now you unmuted me. My voice is audible, Mr. Chairman? My voice is audible now?

Yes. You are audible.

Very good. Thank you. Now Mr. Chairman, I find that there is no name board, no name board before the Chairman, no name board before Mr. Rakesh Sharma. Sir, name boards should have been there. You mentioned IDBI Bank Management. Instead of that, names should have been here. Similarly, the name of the Chairman should have been there instead of some board [indiscernible] company like LIC, et cetera, that I could not understand why the name board is not there. Number two, when the directors are introduced, instead of introducing them, they should introduce themselves, each one of them. That is not done. This is done in all the meetings. So kindly enlighten on why this was not done. And number three, who are the directors who are absent today? So that also, kindly let us know. And now some points are there that -- about NPA. NPA and willful defaulter, I want to say something. Kindly let us know that after an account becomes NPA, then within how many days notice under SARFAESI Act is given? That you kindly enlighten us. And then whether the photographs of willful defaulter is published in the newspaper? Number three, whether there is a system for early detection of NPA. Before it becomes NPA, you should know that this accounting has become weak and, therefore, before NPA, we should be alert. So kindly let us know what is the system prevailing in our bank. Now during lockdown, whether all the branches were open, kindly let us know about that. About NPA, which has come down from 10 to 4.49 (sic) [ 4.19 ], that is good, and I thank you for that. As far as reappointment is concerned, I support Mr. Rajesh and convey my best wishes to him. Now Mr. Chairman, now today, we are holding the meeting on this video conference. But in the month of October end, finally have a get-together of speaker shareholders. The Diwali is on 14 November, therefore, the last week of October, a get-together of the speaker shareholders may be held. This is my suggestion. And about the live streaming, you have mentioned that it is on the NSDL website. There are 2 websites, nsdl.co.in and nsdl.com. So which website it is streamed, kindly let us know about that. And as far as the speakers are concerned, kindly let us know how many speakers have registered today, who will be speaking. My number is fifth, but how many are total speakers? Secondly, how many shareholders are attending today's video conference? And how many are -- and what is the capacity of Webex? How many they could accommodate. Supposing there would have been 500 shareholders, would Webex have accommodated? And my next question is, how many of our staff members are working from home? So kindly let us know about that. Now I come to my [ own ] subject, that is, CSR. Because of -- in this COVID-19 atmosphere, what help we have given? Whether we have provided ambulance, whether we have provided these ventilators, whether we have provided ICU beds, [ PPE ], then sanitizers? In what way we have helped the COVID-affected people? Now here, my suggestion is that if the application is received from a shareholder who is affected by this COVID-19, INR 1 lakh should be given to him because the total expenditure will be INR 15 lakh for treatment. Therefore, at least we should help by giving INR 1 lakh. This should be considered favorably. And now these are all my points. And because of the time limit of only 3 minutes, I will not take the time. I will observe as a [ disciplined ] soldier. And I conclude by conveying my best wishes for all-round progress and prosperity of the company. Thank you very much.

Thank you, sir, Choudhary sir. So the next speaker is Shri [ Kirti Shaha ]. Mr. Kirti Shaha.

Sir, he's not there.

So Mr. Kirti Shaha. It seems he's not there. So the next speaker Ms. [ Lekha Shaha ]. I think we could hear you, madam. Now Ms. Lekha Shaha. It seems there are issues with -- so we will take the next shareholder, Ms. [ Prakashini Ganesh Shenoy ].

Hello. Can you hear me, sir?

Yes, we can hear you, madam.

Respected shareholders, good evening to all of you. I received the annual general report well in advance through mail. It is simple, knowledgeable and contains all the information as per the corporate governance. This is the first time we are having a video conference meeting. I thank -- I'm glad that our company has done very well in the first quarter. I'm extremely glad that the bank has done excellent in the work of CSIR. Our bank has paid INR 5.12 crores to the Prime Minister's CARES Fund during the COVID-19. We are living in the days where everything is unpredictable, lives, including our existence. In such an abnormal circumstances, running a big bank like IDBI Bank, it is not a small job. I appreciate you, sir. Sir, I have few questions. After demonetization, this global pandemic coronavirus has further added focus on digital payments. I wanted to know how are we doing in this front. How beneficial is IDBI Bank's digital platform in the current times? Is our bank educating customers on dos and don'ts? Sir, how is the company preparing its -- in the post-COVID world? What are the learnings from the lockdown and how is the bank implementing these learnings? How are we engaging our employees? I wish the company good luck for a bright future and pray God that the profit of the company shall reach the peak in due course. Sir, I support all the 10 resolutions put forth in today's meeting. Thank you, sir.

Thank you, madam. Thank you. The next speaker is Mr. [ Vinay Vishnu Bhide ].

Hello. Are you able to see and hear me?

Yes, we are able to hear you now, sir.

Okay. [Chairman, Mr. ] M.R. Kumar; MD and CEO, Mr. Rakesh Sharma; Directors present online at today's AGM, the other participating entities, shareholders, good evening to you all. At the outset, let me thank you for giving me an opportunity to participate in today's AGM and ask questions. Like other banks sector, our bank also seems to be making a slow and steady recovery. I shall directly get to the questions on the accounts, annual report as well as the notice of the AGM. Am I loud and clear, sir?

Yes, we can hear you, sir. We are able to see you also and hear you also.

Fine, sir. Great. Question number one, I would request you to refer to the notice to the meeting -- of this AGM notice, Page #3, Page #3 of the AGM notice. Here, we have got Resolution #4, which is a special resolution under special business. And this resolution relates to raising of equity capital up to a sanctionable limit of INR 11,000 crores. Now just for the sake of clarity and to get my point home, I just read this small paragraph on Page #3. So this paragraph #3 is the last paragraph on that particular resolution. It says, Resolved further that, the Board be and is hereby authorized to delegate all or any of the powers herein conferred to the Managing Director and CEO or to the Deputy Managing Directors or any other Senior Executive of the bank and/or any Committee which may be/have been constituted to exercise its powers, including the powers conferred by the resolution. So my simple understanding of this specific resolution is that, we have taken unreasonable blanket permissions by this resolution. I'll elaborate as to what I'm trying to say. First of all, it would have been, in the proper and fitness of things, to state that we would give these powers to our Managing Director or power to the Deputy Managing Directors. That would be fine. That is the first thing. The second thing is that we have taken another permission. We have taken alternative to that and you say and/or, which means that even bypassing the committee, which has been constituted, any senior officer also could be given the powers with limits up to INR 11,000 crores. This does not look to be in the fitness of things. And why this does not look to be in the fitness of things because the prior experience of shareholders with IDBI Bank's earlier officer, I do not give names, I do not give situations, okay, it has been unfortunate earlier, where individual officers have taken undue advantages of the powers conferred on them. So why leave it to officers below the rank of a Deputy Managing Director? Up to INR 11,000 crores, I don't think it is in the fitness of things. And that too, as an alternative to a committee, which can be 3 or 4 people, no, I don't think [ it is ] proper. Please go [ through ] that particular resolution. That was point number one. Point number two is relating to the net interest margins. For that, sir, I would request you to refer to our Director's Report, Page #13, 1-3. Page #13 of the report states that the NIMs have improved from 2.03% to 2.61% in the concluded financial year. That is the year that we are talking about. That is fine. That is very good. Can you tell us what is the expected or the expected NIM trend for the current financial year in terms of NIMs as we stand now at the end of the second quarter of the financial year? That was question #2. Question number 3 relates to segment reporting under AS 17. For this, I'd request you and the Board members to refer to Page #273 of our annual report. Now 273 of the annual report shows 3 broad categories of our business in terms of revenue. They are Corporate/Wholesale Banking, Retail Banking and Treasury. Now if I look at the figures on a comparative basis for the concluded financial year as well as the prior year, what I see is that Treasury profits can go up and down, I can understand. Retail banking seems to be flat. We have no perspective that Retail will continue to give us good profits this year, though I hope -- sincerely hope so. What the main thing is regarding Corporate/Wholesale banking. So for the running financial year as we stand now, can you give us some perspective as to what is the likely trend in terms of profits for the Corporate and Wholesale Banking? So that was question number three. Question number four is on Page 57. So Page 57 of the annual report relates to customer service and complaints management. For this, before coming to some personal issues, which I will take at the end of my points, let me tell you, if you just take one aspect of [indiscernible], there is a complaint module that is there. So if I go to [ input ] that particular complaint module, that module is not working. Wherever by mail, complaint numbers -- sir, are you following me? Wherever by mail, complaint numbers have been given to me. I've got 2 situations of complaints, where complaint numbers have been given, and I have been trying to find out the status of the particular complaint, it is not showing there, and it is saying that the module is not operating, and it is down. How can we claim that we are serving customers and giving them proper service? What is the use of all these investments that we have made in the software and the hardware? So that was the fourth point. So fifth point is something on the brighter side. This is the page on awards. There is a page on awards just ahead of the Director's Report. I congratulate the bank. It's all at the bank level. So I congratulate the bank for having secured awards on various sports. It is the hard work of the employees, including the officers of the bank. Yes, I've got 3 suggestions, which I have listed out. So I'll quickly state them out. Please refer to Page 245, which is the page on business ratios. Page 245. Now on Page 245, we have shown 6 business ratios. So 6 of which is profit/loss per employee. Now I have got a suggestion. You can retain the 6 business ratios if you feel fit in the coming years, but why not we add business per employee? Business per employee is very important. It is more important than that. For a collective working, business per branch, revenue per employee, these are some of the standard ratios, which are shown in some of the banks like Union Bank and other banks. So why don't we show? It will give us a glimpse of what the bank is doing at an individual and collective level. A final point is on the annual report. Bank's share department has been very steadfastly sending the physical copies of the annual report. Even this year, they sent. I thank them for that. But like earlier years also, this annual report comes just in an envelope with a name on it. So why not we add a little bit of inclination to the shareholder and to the customer. Customer -- let us say, shareholder like me -- customer and a shareholder like me who has been regularly patronizing by speaking today at a VC meeting and earlier at physical meetings, why would you have a small letter, covering letter given to that shareholder? Why are you so dry and bland in treating our shareholders? Is that the same way we treat our customers also? So this is just one point. And I'll quickly list out 2 points, which are personal. I kept them specifically for the end. Now I have recent experiences on 2 cases. I'll quickly list them out for you. I had given my KYC documentation to a nonhome branch in Mahim for compliance. This is during a period of lockdown. I must clarify for that. Even after submitting, it has taken an unreasonably long time for the KYC to get compliant. I can understand it is a lockdown situation, it would have taken time, procedures are there and all that. But when I inquired, I found that possibly, the reasons are not due to lockdown or the procedures thereto. I've already raised a complaint, and I need a proper explanation for that. This is one part of it. And look at one common problem, which I'm going to state now. And this is regarding the passbook printing kiosks. I heard Chairman list out so many good points. I really feel from the bottom of my heart that the bank should improve and that is why this question on a public forum. We have got passbook printing kiosks, which have been installed at the Mahim branch and queues are [indiscernible], I understand. And to my surprise, I've been told that they've been not working for months together. But please tell me, as a shareholder if I can ask you, okay, as to why dividends have not been paid, okay, can we not ask the bank as to why the kiosks are not working? Or if the kiosks are not working due to performance of the equipment or the services associated with it, should we not get hold of that particular company, whichever it is, Forbes Technosys, by the scruff and get him to pay penalties over it and replace the machines? Why should we go with our dividends and have this poor service meted out all over the country? I'm extremely turned off on this, sir. Please look into it. I've got the complaints escalated. I've got numbers -- complaint numbers for it. After this meeting, somebody can call me. My number is there. I can give you numbers. I want this properly justified and replied, sir. And thank you for giving me an opportunity to speak. I'll not take more time. And I wish the Directors and employees all the best. Excepting resolution 4, where I have reservations, I support all the resolutions. I am with the bank. Thank you for giving me an opportunity to speak, sir.

Sir, thank you very much. The next speaker is Mr. [ K. Bharat Raj ].

Not there, sir.

So the next speaker is Ms. [ Chandravati Gattani ].

Hello. Good afternoon. I'm CA [ Sarbananda Gattani ], joined holder with Chandravati Gattani. Nice meeting you after a year, sir. And sir, for the last [Foreign Language] but congratulations, [Foreign Language]. And the bank has written to RBI to make it coming out of PCA because when PCA is there, you cannot give loan. You cannot do anything. You cannot [indiscernible]. [Foreign Language] Our CA, capital adequacy ratio is also good, sir, 13%. Our June 2020 results, good. Many people have said, but coming at the fag end, you don't have much to say of the original point, sir. And you are selling your stake in IDBI insurance to Federal and Ageas, and it is going to bring INR 571-or-some crores, sir. Now for the accounts point, sir. Bank is passing a resolution of INR 11,000 crore. And I was very happy my earlier speaker for some very minute details, which I have not gone through. Why a person below the level of Deputy MD should be there. I'm very happy that my earlier speaker said that and it is -- because we had a tremendous bad experience previously, sir. [Foreign Language], what was the reason? Because bank [Foreign Language]. It is not a small amount, sir. I would like to state that [Foreign Language] it is INR 12,800-some crore. INR 11,000 crores is not going to make up our losses also. [Foreign Language] centralized trade processing center at Mumbai [Foreign Language], high degree of efficiency. Bank has given INR 5.12 crore. [Foreign Language], how can he contribute, sir? I don't know why INR 5.12 crore is also -- someone was saying about kiosks and someone something, go for that thing, sir. Government, PM [Foreign Language], don't give dividend to shareholders, give it to us. [Foreign Language] that is being distributed free. [Foreign Language] we are there. We will be taxed again and again. So I did not like that PM contribution, but still, it is your take. Our low-cost CASA deposit, I feel very happy about it, sir, 47.74%. Our base, it is very, very good, sir. Our NPA has also reduced to 4.19% from 10.11%. It must be due to the efficiency of the staff, sir, but [Foreign Language]. And we are a very old shareholder. I could not -- I'm attending the AGM for the first time of IDBI Bank because of this year. Else, I don't know whether I would have attended or not. Our future is also bleak, sir. To be very fair enough, you made a profit of -- in June. I just [Foreign Language] how you have done it in June or March quarter? Is it some [Foreign Language]? There must be something. Because June quarter [Foreign Language], no one is able to do better nicely. Loan waiver, interest waiver [Foreign Language]. Three or four people have committed suicide also, sir. But still, I don't doubt the figures. There must be something good that you have done. I don't know that, sir. But our GNPA is higher, sir, which I did not like, sir. NPA has gone down, but GNPA is going out, sir. Our contingent liability is INR 117,113 crore, sir. What is the status? In elaborate, I would like to know because [Foreign Language]. Sir, I have got 2 requests, sir. I would like the MD and Chairman sir, yours and MD's visiting card. If possible, my name is Sarbananda and Chandravati Gattani, your secretarial department, I'd like it to be couriered, sir, Chairman sir, with an autograph of yours. I support all the resolutions. #4 [Foreign Language]. I support. And best of luck for the September quarter, sir. Thank you very much.

So thank you very much, sir. So next speaker is Mr. [ H.S. Patel ], [ Hutokshi S. Patel ]. So I think Mr. Patel is not there. So next speaker will be Mr. [ Suraj Mahesh Gupta ]. Okay. Then next, we'll go to the next speaker, Ms. [ Meena Aggarwal ].

[indiscernible] annual meeting, which you normally have in Taj Vivanta. And this year's not been -- printed the annual reports. And I would also like to compliment [ Dilip Vaidya ] for bringing out a soft copy, which is so colorful and nice annual report in these extended COVID times when lockdowns are there and no interface meeting generally take place. So I compliment Dilip Vaidya also and for the healthy balance sheet with a lot of cash reserves on hand and no debts on the company. Thank you, sir.

Thank you. So next is Mr. [ Rajendra Prashad D. Joshi ].

Am I audible, sir? Hello? Am I audible?

You're audible, little disturbance is there. But okay, you can continue.

Is it clear now, sir? Sir, respected Chairman, M.R. Kumar; and MD and CEO, Rakesh Sharmaji; other directors present in the AGM; and Company Secretary Pawan Agrawal, everybody -- good evening to everybody. I extend my sincere compliments to Company Secretary Pawan Agrawal and his team for excellent presentation of annual report. Annual report covers all details required as per corporate governance. Sir, I extend my thanks to CS team for helping me joining the meeting. [ Hansa ] called me twice to help me for this purpose. Sir, year 2018, 2019, weakness and slow down across the economy with so many challenges in respect of [indiscernible], liquidity crunch added by low consumption and weak investment demand. Whole banking sector was in turbulent conditions overburdened by NPAs, and our bank was no exception. However, we appreciate the efforts put in by our bank's management to improve the financial health of bank, which was reflected in the quarter 4 FY '19 results, which reported a profit of INR 135 crores. They've made this profit after 13 consecutive quarters of losses. So it is a very, very remarkable thing, and we appreciate the same, sir. Sir, another most remarkable aspect is bank's net NPA improved to 4.19% by end of March of 2020 as against 10.11% at the end of March 2019. Sir, we are confident that bank will overcome the current challenges and will be on the path of growth. Sir, I have some few -- I want to take some few information for myself. Firstly, how much loss of revenue is suffered by our bank due to moratorium extended to borrowers on retail and corporate loans? Second is, what is the growth in CASA deposits and retail term deposits from April '20 onwards? Third is, where from the growth comes, and what is the bank's strategy for accelerating the bank's future growth? Fourth is, if you can just throw some light on [indiscernible] results, if you have already declared, sir. With this, I wish all the best for the bank's growth, and I strongly support all the resolutions. Thank you very much, sir.

Thank you, sir. So the next speaker is Mr. [ Santosh Kumar Saraf. ]