Indian Bank (INDIANB) Earnings Call Transcript & Summary

Good evening, everyone. We welcome you all to Indian Bank's post results conference call for the third quarter of financial year 2025 hosted by Emkay Global. From the top management, we have with us Shri Binod Kumar, MD and CEO; Shri Mahesh Kumar Bajaj ji, Executive Director; Shri Ashutosh Choudhury, Executive Director; Shri Shiv Bajrang Singh, Executive Director; and Shri Brajesh Kumar Singh, Executive Director; and the other top management from the bank. First, I would request the MD, sir, to briefly summarize the key highlights of the third quarter results and also provide us the strategic direction on growth, margins and asset quality, post which, we will open up the floor for Q&A session. Over to you, MD, sir.

Thank you, Anand. And good evening to all, who are participating in the con call. Friends, Indian Bank has published its quarterly results today. And key highlights are total business has grown from INR 12.44 trillion to INR 12.61 trillion, with a Y-o-Y growth of 8.33%. Deposit has grown from INR 6.93 trillion to INR 7.02 trillion, with a Y-o-Y growth of 7.34%. CASA, we have been able to maintain at 40% CASA share. CASA has grown by 3.86%. One good thing, retail term deposits, which we have been able to grow a decent 9%, and advances, we have grown from INR 5.51 trillion to INR 5.59 trillion at 9.61% YoY, 1.45% Q-o-Q. RAM, we have grown from INR 3.25 trillion to INR 3.35 trillion, with a growth of 12.79% and Q-o-Q growth of 3.08%. Particularly in retail, we have grown at 16.16%; agriculture, we have grown at 14.04%; MSME at 8.43%. Our share of RAM has grown from 63.32% on September '24 to 64.35% on December '24. If I talk of the net profit, net profit has grown from INR 2,119 crores a year ago to INR 2,852 crores, with a Y-o-Y growth of 34.57% and Q-o-Q growth of 5.36%. Operating profit has also increased from INR 4,097 crores to INR 4,749 crores at 15.91% Y-o-Y and 0.44% Q-o-Q. NII has increased from INR 5,815 crores to INR 6,415 crores with a Y-o-Y growth of 10.32% and Q-o-Q growth of 3.57%. NIM. We have been able to increase our overall NIM, global NIM from 3.41% to 3.45% on Y-o-Y basis, and that means there is 4 basis point increase. And Q-o-Q. If I talk up from 3.39% to 3.45% on a Q-o-Q basis, 6 basis point improvement is there. ROA. ROA, we have been able to increase from 1.33% to 1.39%. And on a Y-o-Y basis, we have an increase of 28 basis points from 1.11% to 1.39%. Return on equity, again, we have been able to maintain at 21%, with a Y-o-Y growth of 108%. Cost-to-income ratio. Cost-to-income ratio, again, we have been able to reduce it from 45.12% to 44.56%. PCR. PCR, we have been able to maintain a 98.09%, up 209 basis points as compared to the December '23. Credit cost. Credit cost, sequentially also and Y-o-Y basis also, it has come down to 0.47% from 0.65% a quarter ago. Earnings per share. Earnings per share also has seen an increase of 26% Y-o-Y basis from INR 67.12 to INR 84.70 and 5.39% on Q-o-Q basis from INR 80.37 to INR 84.70. Book value has also increased from INR 347.73 to INR 412.42 on Y-o-Y basis and sequentially from INR 394.19 to INR 412.42. Cost of deposit, there is an increase of around 5 basis points on Q-o-Q sequentially and yield on advances has increased 15 basis points sequentially. Gross NPA. Gross NPA, we have been able to bring it down to 3.26%, 22 basis points sequentially and 121 basis points on Y-o-Y basis. Net NPA also, we have been able to reduce it to 0.21% from 0.27% a quarter ago and 0.53% a year ago. Slippage ratio, consistently, it is coming down from the last 3 quarters. In June, it was 1.7% and September 1.06%, now it is 0.78%. Consistently, if you see our recovery is more than slippage this time also against the slippage of INR 1,016 crores, a recovery INR 1,911 crores. SMA book. Many analysts, they have posted SMA, has increased a little bit because 2 accounts -- 3 big accounts has -- came to SME -- SMA. Out of that, now all these 3 has come out of SMA 2, while only 1 is in SMA 0. And presently, our exposure to SMA 2 is less than INR 3,000 crores. Then account -- bank has taken various initiatives during the last 2, 3 years on the account of digital initiative and HR transformation also. In the last 2, 3 years, we have opened more than -- or launched more than 117 journeys or product and processes. And similarly, account opening has also been revamped. And the account opening, if I compare, it was 56 lakh during the last financial year, which is 42 lakhs in the 9 months. Similarly, in current account, we have opened 1.80 lakh account in the last financial year. So far, we have been able to open 1.15 lakh crores. Guidance. Whatever guidance we have given for the financial year, we stick to the guidance. Guidance, deposit, we are giving -- we have given guidance of 8% to 10%. We will continue to do that. We will achieve that. Advances, we have given guidance of 11% to 13%. We will achieve that. CASA also. CASA, we have given guidance of around 40%. We have been able to maintain that. And we will -- our endeavor will be to maintain CASA at 40%, although that may be a little challenging. Credit deposit ratio, LDR, it is -- we have given approximately 80%. We are at 79.63%. So we have been able to maintain that. Net NPA, we have given guidance of less than 0.23%. We are at 0.21%. Recovery, we have given guidance of INR 7,000 crores. So far, we have been able to recover INR 5,800 crores. So we are on track. We will be able to achieve that. AUC recovery, we have given guidance of INR 2,000 crores. We have already recovered INR 2,100 crores. NIM, we have given guidance of 3.40% to 3.50%. So we are on that target. ROA, we have given guidance of approximately 1.20%. We have beaten that. We're at 1.39%. Return on equity, we have given guidance of 19% to 20%. We are at 21%. Cost-to-income risk, we have given guidance of approximately 44%. We are at 44.56%. And credit cost, we have given guidance of 0.77%, but we are at 0.47%. So that is the -- these are the numbers. And I will request my colleague, Mr. Mahesh Bajaj, to explain about the digital initiative. Thereafter, we can take calls.

Thank you, sir. Good evening, friends from the analysts and the investors. As far as our digital journey, the success story continues. Our digital migration has gone up from 87% to 92%, Y-o-Y, 5% up. So branch-level transactions have come down to 8%. And the mobile banking and all, the channels, there's a growth of 18%. Same way, the transaction growth is also 12%. And again, MD, sir, was talking about the digital journeys. So this financial years, we have launched 15 -- we closed to 39 journeys, and this quarter, 15 journeys. So put together, 117. And our business on the digital channel have gone up by 125%. It was INR 52,884 crores during the last financial year, December '23. And this time, it is INR 1,18,981 crores. So it is -- 9-month growth is 125%. Same way in RAM. It has gone up by 113%. E-deposits and the digital deposits also, it has gone up by 186% from INR 7,500 crores to INR 21,000 crores. Same way, the digital adoption also have gone up in the -- both RAM. MSME, it is 80%; retail, 77%; and agri, 88%. And we have crossed the digital business since inception, which we started our journeys more than INR 2,05,870 crores. And bank has the -- almost all journeys, if we see, even the journey-wise also, the growth is there. We have opened 89 lakh accounts through digital platform, which is Y-o-Y, it's 160% growth. Same way on the liability side, it is 186% growth, which is -- growth is INR 14,000 crore. And on the digital home loan also, see 3.2x growth is there, which is INR 4,259 crores. Even digital vehicle loan also, 4.7x growth is there. And we have -- I mean the jewelry loan and the retail side also, we have now made journey on the digital channels, which is, again, a 12x growth, which is INR 7,715 crores. Digital MSME growth is also close to 79%, which is close to INR 4,718 crores. And same way on the digital agri, 98%. It is almost doubled, which is, the growth itself is INR 33,467 crores. And on the self-help group also, we have started our journeys. And our IndSMART app, already, it is launched on June '24 for the retail customer, and it has more than 275 functionalities. It is available on both Google Play and Apple App store. We are now, very shortly, we are going to start our mobile banking for the corporate customer also, it is under CUG. And on the retail, more than 60 lakh customers have already onboarded. And the digital business and fintech partnership, we have onboarded close to 138 fintechs. And we then provide all type of fintech solution to the government, to the institutions, like municipal corporation, CESS collection, religious institution, postal, FASTag, all kind of solutions bank is providing through their fintech partnership. And bank is having various, other than ongoing key projects, which we have provided in the presentation. With that, I will conclude my presentation. Thank you.

Thank you, sir. Sir, before we open up the floor for Q&A, I had 2 questions. One was, you said that the credit growth will be about 10% to 11%, which means that the fourth quarter, we'll have to do a heavy lifting in terms of about 5% to 6% quarter-on-quarter growth. Now that you are focusing a lot on margins front, whether, obviously, the targets were actually given by the earlier management. Would you want to stand to it? Or like you basically would want to revise it downwards?

No, no. We won't go for any downward revision. Credit, we are saying we will be growing at 11% to 13% in the range of 13%. And margin also, we will be maintaining that, between 3.40% to 3.50%.

Yes. But then that would call for a pretty heavy growth in the fourth quarter given the run rate direction.

But you see credit, we have grown at almost 10% already. So maybe -- and you see in fourth quarter, demand is also higher. So that is achievable. We will achieve that.

Okay. My second question was to Mr. Bajaj that -- I mean, you have given a good slide on digital lending front. So is it all organic digital lending that we're doing? Or basically, there are a lot of partners through which basically we are doing this thing?

No. Basically -- sorry. Basically, our journeys, we have already taken a vendor. So with that, with their help, we are doing all these journeys. As far as the other solutions, which we are providing, where we did not go for our own solutions. There, we have onboarded 138 fintech partners. Like some government department is asking for a platform solution, some -- this institution is asking. So for that only, these platforms are the fintechs we have onboarded. Other than that, bank has its own journeys. We are only doing, and through our own, the permanent partners only. Vendors, we have already onboarded for our mobile banking as well as the DLP, digital lending platform.

And recall, we had Rupeek as one of the partner, which was there, particularly on the gold loan front. So is it still working -- that partnership is still working? Or like we have basically closed down that partnership?

No, that was basically for doing business on the gold loan. But bank, on its own, is having a good amount of business. So with Rupeek, we have stopped doing. I think there is a few lakh or crore must be pending. How much is the balance? No outstanding as on date, and we are not taking it forward. Co-lending, we're not going to stop.

Now we'll open up the floor for Q&A. [Operator Instructions] First, we have Mr. Ashok Ajmera in the queue.

Binod Kumar ji, welcome to you to Indian Bank as the Managing Director and CEO. Nice to see you there.

Yes, thank you.

Sir, my first question is, I will extend Anand's concerns because my major concern is basically on the growth nowadays in most of the banks are facing. But it seems that our growth in last 9 months -- of course, you have joined, I mean, the bank recently. But of course, I'm talking about the whole bank, as such, has been very, very mute. So if you maintain the same targets of 11% to 13%, say, even 12% of the credit growth, you need to disburse in this quarter almost about INR 38,500 crores as against INR 8,500 crores in the last quarter and INR 25,000 crores in whole of 9 months. So how do you -- like how do either we believe that INR 38,500 crores can be disbursed by Indian Bank only from January to March 2025? So some color on your sanctioned pipeline, your disbursements under the pipeline. Because even if some fresh sanctions take place now, I think the loan book will not increase. The disbursement will not take place before 31st March -- may not take place.

So Ajmera ji, I appreciate your concern because since last -- in last quarter, we have grown by INR 8,500 crores, and all of a sudden, management come and say that we will grow by INR 38,000 crores. So I appreciate your concern. But if you see, in last quarter, the growth has been good in the RAM sector. RAM, we have grown at 13%. So that means there is no challenge on the RAM. . So then question comes of the corporate. Corporate, we have a good pipeline of around INR 40,000 crores in various stages. Some are in the disbursement stage, some wherein principal has been given, some proposal has come to head office, some -- and after my joining, we have also conducted -- already conducted one MC. So -- and we have already after -- as you were saying, after taking charge, I have already taken stock of the situation. And you are saying INR 38,000 crores, I am targeting rather INR 40,000 crores, and we will be able to achieve the 11% to 13%. Not saying...

Yes. That's not INR 38,000 crores. I said -- I took the average of 12%. That is why INR 38,000 crores, but INR 40,000 crores, yes, better.

Yes, yes, yes.

And we will be very happy, sir. We will be very happy if you achieve this target because on the deposit front also, we are lagging behind. And there, also...

Yes, yes. But deposit, also, let me tell you the good thing. Good thing, if you see our -- that data may not be there, our deposit growth, we could have grown. There is no issue in that. But total wholesale deposit, we have degrown from 1.08% to 1.01%. So there is no point in taking deposit at higher cost and deploying somewhere at not very profitable opportunities. Similarly, if I talk of the retail deposit, retail deposit, we have a good growth of around 8% to 9%. So -- and CASA, we have been able to maintain 40%. So if we want to grow, it's our choice. If you would have wanted to grow at, say, 9% or 10% in CASA, if that were to make business sense, we could have grown. Because we could have taken some bulk deposit because CASA and retail term deposit is supporting us.

No, sir, it's very good to be optimistic, and then to achieve also the same optimism targets. Sir, my second little bit of observation. You said that because the SMA 2 numbers had increased to INR 4,982 crores, and you said that 3 accounts have already been, I mean, recovered the amount. They are regular from SMA 2 to SMA 0 maybe or SMA 1. And now the balance outstanding is only INR 3,000 crores in SMA 2 as on today. So these 2 or 3 accounts are habitual of 1-month lag, I mean, coming in SMA 2 and, again, going in SMA 1, or it was a onetime problem for them?

See, these accounts are coming in SMA for some time, say, 3, 4 months. But out of these 3, 2 has come -- become regular completely, not even in SMA 0. Only one account is in SMA 0, which we expect that, that will also become completely regular. And going forward, it is our expectation that they should not further slip to SMA.

Okay, sir. That's a very good point. Sir, on the -- there is one note that INR 155 crores excess provision is -- has come to the profit and loss account because of the -- on the sale of the stressed loan book. So going forward, in this quarter also, we expect some -- this kind of additional recoveries like -- or the reduction in the provision because of those recoveries, sale of stressed loans?

Sale of stressed loan, also, I will reply it like this, Ajmera ji. So recovery in -- which is adding to our bottom line and operating profit also, that amount is around INR 548 crores. Last quarter, it was somewhere INR 782 crores. So we expect that this INR 540 crores, we're around INR 500 crores, we will be able to achieve that. Because we have given guidance of recovery of around INR 2,000 crores in AUC, and we have already achieved INR 2,100 crores, and whereas it was, last year, INR 3,000 crores. So we expect that this momentum will continue because we have good [ TWO ] book of around INR 40,000 crores.

And sir, my last question in this round, sir, is on investment book, investment or rather, nowadays, we'll call it as a trading profit or opportunities, either, I don't know, on the arbitrage or something. So how do we -- can the treasury like looking -- I mean, income from treasury even this coming quarter, profit from the investment, sale of investment or the treasury profit, some indication in this coming quarter? I mean, January-March quarter?

Treasury profit, yes, we are expecting in this quarter treasury profit was INR 283 crores. So trading profit was INR 283 crores, but the MTM was minus -- there was MTM charge of INR 24 crores. So maybe in next quarter, we will have some trading profit, again, it should be in the same range. And the MTM may not be there. Because we expect that there should be some moderation in the interest rate, so may not be there. This is my expectation, but don't know, market, how it will behave.

No, anyway, sir, good. Once again, congratulations, and all the best to you. You are maintaining a very good ROA of 1.39%. Your net NPA is also almost now, no more scope is there for any further provision, 0.21%. Of course, and gross NPA might -- still there is scope for reduction. So anyway, all the best to you, sir. And if time permits, I'll come back again, sir, for some minor database, data points, sir.

Thank you, Ajmera ji.

Question will take from Piran from CLSA.

Congratulations, Binod ji, for this new role as MD and CEO. Sir, firstly, I just wanted to ask, what is our LCR right now, liquidity coverage ratio?

Thank you, Piran. My LCR, as on 31st of December, was 116%, and presently, it is 125%.

Okay. And what are our plans to -- after the LCR norms come, is 116% the comfortable level for us? Or do we plan to shore it up?

But on an average, our LCR remains in the range of -- in excess of 120%, approximately 125%, and impact of new norms are around 8 to 10 basis points. So on a particular day, I cannot say, but we -- with 125%, even if there is a hit of 10 basis points, then 115%, we will be able to maintain. I think that is comfortable.

And sir, secondly, just going back on our -- the SMA book, can you give us some color, these 3 accounts, which sector were they from? Are they PSUs or private? And what gives you confidence that the SMA 0 account will be recovered soon? Just some color would be useful, sir.

See, if you see the track record of all these accounts, these accounts recovery has been very good. And it's not new account, it's old. And all these are old account. Old account. So all of a sudden, some problems creeped in. And ever since last, I would say, around 6 months, there has been some issue. But now, some understanding has been reached, and we expect that these accounts would not slip into SMA further. Two has already come out of SMA, and one, which is in SMA 0, is expected to come out shortly.

Okay, sir. And sir, just lastly, in agri. For other banks, we see, in the third quarter, slippages are usually higher, like ICICI Bank, Axis Bank, they say slippages picked up in third quarter. But for us, it has actually gone down. Is it a different profile we do because we don't do much Kisan Credit Cards? What would be the reason, really?

Yes, yes, yes. Actually, we are focusing on investment credit. So that is a differential.

And KCC is not much for us?

KCC, we are doing, but selectively.

Okay. Okay, sir. This answers my question. Thank you, and wish you all the best in your new role.

Thank you. Thank you, Piran.

Next question, we'll take from Rakesh.

Quite good set of numbers. So just had a few queries, sir. So firstly, coming to this standard asset provision, we are continuously making this provision. And if I'm not mistaken, that number, like we have done like kind of around INR 550 crores we have done for the 9 months. And we already had close to around like INR 8,000-odd crores in the March '24. So what is the provision that we have for the restructured book and for the SMA? So if you can just tell us, so what is the provision cover we have on that now?

On SMA 2 book, we make provision of 10% flat on SMA 2.

Okay.

And on restructured book, we have a provision of 25%.

Okay. Does this mean that the additional provision that we have, so if I consider that for the standard to standard loans, which are not the stressed, we would have approximately 55 bps of provision -- 50, 55 bps of provision. And then we have, as you said, 20% provision for restructured and 10% for SMA. So the residual standard asset provision, is it that we are building it for ECL only?

I will not say that it's building for ECL because we don't know when ECL will come. We are adopting prudent measure, I will say. Wherever we feel that there is some stress or account may slippage -- slip, or there may be some sector where we can see some stress, we are conservatively making provision, prudently making provision for that.

Okay. Sir, just second question on the borrowing part, sir. We have raised infrastructure bond of INR 5,000 crores at 7.12%. Borrowing cost seems to have gone up. So I know this is a very small amount as compared to the borrowing's total outstanding, but if you can let us know why the borrowing cost has gone up this quarter?

Rakesh, not INR 5,000 crores. We have raised infrastructure bond of INR 10,000 crores. And whatever amount you see, it is because of that only.

No, INR 5,000 crores, I think you raised in the October '24, as you are mentioning in the presentation.

Previous quarter, INR 5,000 crores. Two quarters. So it is impact of that only. Because I have analyzed that, and that is what exactly -- see, Rakesh, what had happened, we have raised money in Q3, but -- sorry, Q2, but the impact of that has come in this quarter.

Okay. Sure, sir. Sir, that answers my question. All the best.

Mahrukh, please unmute yourself and ask your question.

Sir, congratulations. Congratulations on your new role, sir.

Than you.

Sir, I had a couple of questions. Firstly, the deposit taking was tough for all banks in the third quarter. Has it changed on the margin in the fourth quarter? Or do you see change in the fourth quarter? And therefore, will some of the -- do you see any deposit rate cuts even if the repo rate is not cut in the near future? That's my first question. And my second question, again, is on loan growth that, see, Bank of India also said they're going to grow 14% to 15%. Then Union Bank also gave a loan growth guidance. They have basically retained their guidance. And so for all PSUs -- I mean, for at least these 3 PSU banks, the implied growth for the fourth quarter is 5% to 6%. So it's not only for your bank, it's for everyone. So is there enough demand or enough corporate demand for everyone to grow 5% to 6%? Is there some CapEx lined up? Or is this a busy season or real busy season? So I just -- I'm just trying to find out whether there is indeed some demand improvement from the corporate side?

Thank you, Mahrukh. See, deposit rate cuts, I don't think there will be rate cut on the deposit front. Because if you see the bulk rate, it is already very high, and I think it will continue to, unless there is some rate cut is there. And on the credit growth, as I earlier told also, Mahrukh, RAM sector, we are already growing at 13%. So -- and 64% of our book are RAM. Then we have to concentrate on the -- if you are able to do some good corporate credit, we will be able to grow at 11% to 13%, which guidance we have given. And for that, we have a pipeline of INR 40,000 crores, around INR 40,000 crores in the corporate book itself, an overall pipeline of around INR 60,000 crores. So we are hopeful. We are quite hopeful that we will be able to add around INR 38,000 crores to INR 40,000 crores during the Q4. And overall, if you see -- otherwise, also, if you see historically also, credit growth in Q4 is higher as compared to other quarters.

Got it, sir. Sir, and with higher corporate growth, would that put pressure on margins? Or not really?

No, no. Margin, we're very cautious. As a philosophy, we are dissuading giving loan on the repo rate loan -- or external benchmark-linked loan, corporate book, particularly. We will be cautious of the margin also. But if there is some rate cut or -- I mean the deposit cost really goes up, then there can be some moderation, but we will see. We are at 3.45%, so NIM -- and we have given guidance between 3.40% to 3.50% so we will be able to maintain that margin.

Got it, sir. Sir, and my final question is on LCR. So no final guidelines have come. Would that mean that it's -- I mean, we can forget about it now? Or how does it work?

No, no, we cannot forget about it. It's already there, and we are having calculation on a regular basis of that.

Okay. Okay.

And we expect that, at some point of time, it will come. Timing, we cannot say.

Got it, sir. Okay, sir. All the best.

Thank you, Mahrukh. Thank you.

Next question, we'll take from Kunal Sukhwani.

Sir, just a basic bookkeeping question. Just wanted to know how do we calculate this book value, which is at INR 412? And if we calculate it based on the balance sheet equity, which comes at INR 495, so what exactly is the adjustment we do in the book value per share?

Our CFO is replying.

Yes. So that is our net worth divided by the number of shares, sir.

Net worth divided by number of shares?

Yes.

Jai, you can unmute yourself and ask your question.

Congratulations, sir, on your new responsibilities. I have a few questions, sir. First, sir, on your MCLR rates, right, so if you look, there have been inching above cost of deposits in the last 6, 9 months. But the 1-year MCLR rates have not increased commensurately, right? It's only 5 -- maybe 5, 5 basis point increase. How does this work? I understand other banks have also not raised too much MCLR rates. But what is your sense as to why MCLR rate increase is much lower than the rise in the cost of deposits?

So MCLR -- thank you, Jai, for good wishes. MCLR, see, MCLR is the marginal cost. So marginal cost -- and it is a defined formula from RBI, so we are calculating according to that. Because we have to take cost of fund, then operating cost with very much defined formula. So I don't think there should be -- and if you see, particularly cost of fund of the banks has gone up. Definitely, if I talk of the -- my bank cost of -- just a minute -- cost of -- I don't have that number right now. Q-o-Q, that is Q-o-Q basis. Q-o-Q basis, it has gone up by 5 basis points. And if you see, my MCLR has also gone up by 5 basis points in the last month. So maybe not we're commensurate because of -- whatever reply to that also is, see, 40% is CASA. So entire cost is not -- we are being built up in the -- while calculating MCLR.

Right. Okay. Sure. Sure, sir. And secondly, sir, if -- and if you can bifurcate the loan book into MCLR and EBLR and T-bills and maybe fixed rate book, if you have that breakup handy?

MCLR, linked, it is 56.6%. EBLR, it is 36.97%, and fixed, it is 4.74%.

Okay. Sure. And sir, where do you put the gold loan, which we have, I think, a decent amount gold loan? Is that also a part of -- out of this? Or this is included in floating? Or how does it work?

It is mixed. Part of that in agri MCLR, and part of that in the EBLR.

Okay. Sure. Hello?

Yes.

Sir, on this gold loan, if you can also quantify how much is the total gold loan at the bank level? How much is agri gold and how much is retail gold?

Total gold, we have INR 90,000 crores, out of agri is INR 78,000 crores. Total gold loan is INR 90,000 crores, out of agri is INR 78,000 crores.

And sir, any changes because of this RBI new final circular on gold loan? Are you -- do you have to make changes to any of the gold loan products on agri and nonagri side?

So yes, because of that, there has been some declassification from agriculture to nonagriculture, and that impact has already been taken.

Okay. Sure. Then sir, I also wanted to check on standard assets provisioning. So you mentioned that the bank provides a 10% straightaway to SMA 2. Is there any other broad guidelines? So we have INR 500 crores of standard assets provisioning this quarter. If I just look at SMA 1, 2, I don't think at the -- I mean, 1, maybe that explains the SMA 2. But is there any other formula or broad framework to provide for the standard assets provisioning?

So Jai, I told you wherever we see a stress somewhere building up, we make provision in that segment, sector or account. So some additional provision has been made in some of the sectors and some of the accounts.

Right. And sir, if you have the number as to what is the outstanding non-NPA provisions at the bank level, that may include -- restructuring provisions you have already given is there in the presentation, but what is the total stock of all general and non-NPA provisions, if you have that number?

So basically, you want to have ECL numbers? Yes, presently, I don't have that number. I will share with you separately.

Sure, sir. And lastly, sir, I think you mentioned or you hinted that you are doing very well in RAM, right? So no doubt about that, 13%, 14% is a very decent growth. But corporate growth has been coming down only, right? I mean it's now come down to 4%, 5% Y-o-Y. What is going to change, sir, in this quarter? I mean, see, we were growing at 10%, 11%, then we came down to 8%, 9%, and now last quarter, corporate growth is around 5% only. What could change for you to just to grow this book without impacting margins too much? I was just thinking on those lines.

Corporate, also, otherwise, we are also growing at 8% to 9%. So you can take last quarter as an aberration.

Okay. Okay. Sure. All the very best.

Thank you, Jai. Thank you.

So next question, we'll take from Ashlesh.

Congratulations on the new role.

Thank you, Ashlesh.

First set of questions is on the deposits front. If I heard you correctly, your guidance is 8% to 10% growth in FY '25 on deposits. If I look at your YTD growth in the first 9 months, that is at about 1%. So do you -- so how do you plan to achieve that 8% to 10% guidance in the next quarter because that would imply a fairly sharp jump in your depo sit acquisition?

Yes, yes. But if you see our Y-o-Y growth in deposit was 7.34%. And I -- as I told you, our growth in retail -- retail term deposit is also at around 8% to 9%. So we are quite hopeful. And accretion, that means accretion in the last year also, it would have been good accretion in the Q4. Because if we are growing at 7.3% in the Y-o-Y basis, that means whatever accretion we have been able to meet last year, we will also be able to make accretion in this quarter.

Got it. So you do not include the instant...

Sorry? Please go ahead.

So you said more than 10% you will achieve?

Deposit?

No. Based on last statement. 8% to 10%? Okay.

No, no, 8% to 10%.

You don't include the infrastructure bonds in the -- in that guidance, right?

No, no, no. infrastructure bond is separate.

Okay. Sir, and secondly, you indicated that you have shared some of your bulk deposits, bulk-term deposits, if I heard you -- heard the numbers, right? You said it's gone down from some INR 1.08 trillion to INR 1.01 trillion in this quarter. Any specific reason why this shedding has been undertaken in this particular quarter itself? Why not earlier?

Not any specific reason because maybe not getting at our desired rate, whatever we are looking for. Not any specific reason, otherwise, or not an opportunity to invest it at a desired rate. And for the management of the fund, we have been able to range -- arrange INR 10,000 crore of infrastructure bonds. So that is also a money fund for me. So if I can -- since we have raised also INR 10,000 crores. So -- because of that also, we went a little slow on the bulk side.

Got it, sir. Sir, and just lastly, on the AUC recovery, that momentum has been extremely strong for us in this 9 months. Any sense you have for the recovery outlook for the next year, whether this can be along similar lines or down, let's say, 20% or down 40% from FY '25?

AUC recoveries since last year, it was INR 3,000 crores. This year, we have given guidance of INR 2,000 crores. Let final number come in the March, then we will give guidance for the next year.

Next question, we'll take from Sushil.

Binod ji, congratulations on your appointment.

Thank you, Sushil ji.

Congratulations to team Indian Bank for a great set of results. Sir, everybody is asking a question on growth path. I have a little different question. Textile industry in Southern India post Bangladesh is witnessing some positivity. And you've been headquartered in Tamil Nadu, in Chennai. The cluster of textile is large. Auto ancillary is very large performing sector for India, and they are again based in South. Are we seeing accelerated traction specifically in these 2 sectors from our RAM or large corporate in the credit, which we are sanctioning or likely to sanction?

I mean we have not seen, as you are saying, if any good demand improvement. But we expect that, going forward, there should be some demand from the textile sector because, if you see, the textile sector is struggling since last 2 years. And gradually, things are improving. So textile sector may see some good demand in coming quarter or coming -- going ahead.

So unavailed credit is -- I mean the credit pipeline, which is already sanctioned, the availment is not fully utilized, you mean in these 2 segments of the bank? Or you would say they are quite utilized well?

No, no, unutilized portion are there.

Sir, what would be unutilized credit in the bank today, if I ask from a credit book perspective?

Unutilized limits. So we have sanctioned limit of -- unutilized limit of INR 17,928 crores, unavailed portion.

Sir, any visibility on infrastructure, which Apple cluster, large data centers, many other warehousing and multiple large projects, whether led by PE or large conglomerates are coming in Tamil Nadu, Karnataka and Southern belt in proportion to -- in similar proportion to Western zone? And the visibility is very high on those projects. Is any credible visibility at your end, these companies are talking to you or likely to emerge in this quarter or the next quarter?

So not any specific sector-wise, I cannot give you, but we have a good pipeline, whereas -- wherein we have given, say, sanction of, again, partially disbursed book is INR 10,851 crores, where we see there will be disbursement. Then we have sanction of INR 8,000 crores, where we have sanctioned, but disbursement is yet to start. And there are some cases where still we are -- some negotiation is going on, that is around INR 5,000 crores, we have given sanction, but some amendment in terms and conditions may be required. So these are the things.

Sir, our management team has taken a lot of initiative where digital spend is concerned, state government businesses are concerned, not only within state of Chennai, but in various geographies, like both municipalities, collection, which would attract CASA and many other things. And a lot of digital spend was initiated in the last 2 years. Any further improvement, outlook coming from these businesses or the digital spend, which Mr. Bajaj may answer, if possible?

Yes, yes. See, again, over the last few quarters, our digital spend on the -- if we talk about the [ NINS ], it is close to 25%; and OpEx, it is 9% to 10%. And in even the further committed figures are also close to 9% to 10% of our OpEx, it will remain. And same way on the capital also, capital expenditure on the IT will remain in the next 2 to 3 years, already we have committed for so many projects. And on the government fintech partnership, already, we have done a good amount of the tie-ups are close to 100 projects completed, and 65 to 70 projects are already in pipeline. So those parts also, we have already the line of fintech partnerships, and those projects also, we'll keep doing.

Sir, this fintech partnership can contribute how much to our growth in terms of retail or MSME loans?

No, it is not basically -- this fintech partnership, basically, it is for the government department, basically, gives us the collection. So there, this government and fintech department, when we started almost 3 years back, we have got close to INR 15,000 crores to INR 20,000 crores of the present balance in those accounts.

So these are more from larger accounts and not retail accounts?

Sushil ji, I think you'll have to fall back in the queue. Next question, we'll take from Ashlesh.

Sorry, I am done. No more questions from my side.

Next question, we'll take from Rakesh.

Just one small question, sir. So we have a total PSL, approximately INR 1.9 trillion. So what is the refinanceable borrowing that we can get against that? Because that would greatly save on the borrowing cost as well as it will help on the earlier front also. So if you can help us understand that.

So refinanceable PSL, you are talking of?

Yes, sir. Out of INR 1.9 trillion number, which is the completely in-house generated book of PSL.

Sir, we have already taken. From SBI, we have already taken.

So refinance -- out of that, see, it's -- I will reply it like this. INR 1.9 trillion will be -- is the book. So part of that will be refinanced, part of that will be repaid, but our growth will continue. So PSL, whatever earnings we are having through PSL, we will continue to have that income through the PSL in the current quarter also.

No, sir. Sorry, I was referring to something else. So PSL income is coming, and that is doing quite good to our PSL number. But what I was referring is that the borrowing number, sir. So for the refinance borrowing, how much more that we can get? And what would be the upper limit of that refinance we can avail?

We'll give you, Rakesh, separately.

Next question, we'll take from Dixit.

Yes. Just one clarification, where you mentioned that SMA number has come down to below INR 3,000 crores. So you are talking about SMA 2 only, right?

So all SMA. All SMA, I was talking.

Okay. So this INR 7,700 crores has come down below INR 3,000 crores.

Yes. Yes, sir. INR 2,500 crores -- it has come down to INR 2,543 crores only, which was INR 7,600 crores, INR 7,700 crores altogether, RAM and plus corporate.

Okay. Okay. And my second question was, any particular reason for not continuing the co-lending business?

Co-lending, say, we are waiting for. We are in the process of having some complete end-to-end co-lending solution. Till that time, because subsequently, there are many issues cropped up regarding towards reconciliation. So because of that, we are waiting till we have a complete solution, end-to-end solution for the co-lending. Only then, we will go for co-lending.

Okay. And how much would be our MFI book?

MFI, INR 1,244 crores only.

And how it is being booked?

There is no SMA. Nil SMA in that.

Okay. Okay. That's it from my side.

Thank you.

Thank you, Dixit. Sushil, you can unmute yourself if you want to ask a question.

Sir, your outlook on your international book and treasury, seeing the yields which are there, are we being conservative in our guidance? Or...

See, overseas book is growing at a decent 7% to 10%. We will continue that growth rate, Y-o-Y also and Q-o-Q also. On treasury book, yes, we will see some moderation in the yield. So basically, some income should come from their guidance. Exact number may not be -- I may not be in a position to give you the exact number, but we expect some good income from the treasury in Q4.

Sir, previously, Mr. Bajaj did answer my digital tie-ups and expenditure question. But do we have some kind of a budget, which we have planned over a period of 2 years after you have joined the bank that we would like to spend on digitization and digital expenditure of the bank, like a CapEx?

Presently, our bank is spending around INR 1,200 crores annually on the digital front, and we will continue. Wherever one thing I can assure you, the exact amount, that will depend on the requirement also what the strategy we adopt going forward. But this type of spending will keep on happening for, say, another 2, 3 years, at least. Because there are many projects in the pipeline, many initiative has already been taken. So we will mature that.

Sir, we had created a subsidiary for a lot of back-end work to be done. And I think RBI granted approval. And many banks, like SBI, Bank of Baroda, have been effective in doing a lot of Kisan-related products or cross-selling or back-end processing, where retail is concerned. Where do we stand today? And how is the shape taking up place where Indian Bank is concerned on that?

So IGSSL has been -- I mean, it has been only recently established. And in this quarter, we have been able to garner business of INR 1,765 crores in this year itself. And we have a good plan for that because, see, we want that to be our marketing arm. So we will focus on retail product also. We will focus on housing loan. We will focus on vehicle loan and collection also. We will use them for collection also. So going forward, we have a lot of expectation from and a lot of plans from this our -- this subsidiary.

In the interest of time, we will take that as a last question. Sir, if you have any closing remarks to make before we end the call?

Bank is doing good numbers that you have already seen. We will maintain the same philosophy of steady growth and good asset quality and efficiency parameters, like return on asset or provision coverage ratio. So these things will continue, and we will focus on MSME also. And if you see the last 2 years, as Mr. Bajaj told you, we have made a lot of investment on digital front. But the benefit of that is yet to come. So digital and adoption in RAM sector, it is good. But on liability product, also digital adoption, we will like to increase. And we are also coming out with a next-gen call center. We will be going for CRM solution. We are also in the process of procuring employee assist, wherein if employee have some query, he can simply get -- put his query, and he can get the reply. So that will help bridge the knowledge gap of the employee. So these are the few initiatives we'll be taking, and MSME will also be our focus area. Thank you, Anand. Thank you, everyone.

Yes, thank you, everyone. And with that, we will end the call. Have a good day.