Punjab & Sind Bank (533295) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. I'm Shilpa Abraham, the moderator for this press conference. I welcome and thank each one of you for joining us today for the Q4 and annual results fiscal year '23 of Punjab & Sind Bank. Please note that this press conference is being recorded. [Operator Instructions] I would now like to introduce the management of Punjab & Sind Bank. We have with us today Managing Director and Chief Executive Officer, Shri Swarup Kumar Saha; Executive Director, Shri Kollegal V. Raghavendra; Executive Director, Dr. Ramjass Yadav; and Chief Financial Officer, Ms. Mahima Agarwal. I would now like to hand the conference over to Shri Swarup Kumar Saha, MD and CEO of Punjab & Sind Bank, for the opening remarks after which we will have the forum open for the interactive Q&A session. Thank you. And over to you, sir.

Thank you, Shilpa. Good evening, and welcome you all to this Q4 virtual press conference of Punjab & Sind Bank. On behalf of Punjab & Sind Bank, I welcome you all to this post-result declaration virtual press conference. The Board today of the bank has approved the financial results for the quarter ended and the financial year ended March '23. The key highlights of the results are: the bank recorded its highest ever net profit of INR 1,313 crores in the financial year against a net profit of INR 1,039 crores Y-o-Y basis, registering a growth of 26.37%. The bank's operating profit has zoomed to INR 536 crores during Q4 of financial year 2023, thereby registering a Y-o-Y growth of 69.09% and Q-on-Q growth of 55.81%. The total business of the bank has grown by 10.5% and stands at INR 1,09,647 crores, having a mix of deposits of INR 1,09,665 crores, showing a growth of 7.37% and corresponding gross advances of INR 80,982 crores, showing a growth of 15.05% Y-o-Y. The other key highlights of the results are: the operating profit has grown by 9.02% on a financial year basis. The net profit has grown by 32.08% on a quarter 4 Y-o-Y basis. The return on assets has improved to 1.33 at the end of quarter 4 and on an overall FY 0.98, the yield on advances has improved to 7.85 during the quarter and stands at 7.67 in the end of the financial year. The important impact that has happened on the results that we are declaring today is that the cost-to-income ratio has been reduced for the quarter to 56.45% against a corresponding figure of 65.19 last year, thereby showing a reduction of 874 bps and for the financial year as a whole, it has also been reduced to 62.95. The noninterest income has grown by 154.42%. The slippage ratio for the quarter was 0.63%. Across the NPA percentage, thereby showing improved asset quality has reduced to 6.97% for the quarter end. Net NPA has been reduced to 1.84%. The recovery and upgradation has been very robust for the bank and for the quarter ended March '23, the total recovery upgradation was INR 1,153 crores, and for the entire year was INR 2,151 crores, against a similar amount last year. So we have been able to maintain the momentum on our total recovery and upgradation. The credit cost for the quarter has come down to 0.38. The capital adequacy of the bank has been -- is still healthy, and it is at 17.10 with a CET1 at 1,432. The net interest margin has, on a Y-o-Y basis, improved from 2.80 to 2.91, thereby registering a growth of 11 bps. The provisioning coverage ratio, though marginally declined from Q3, has shown an increase of 117 bps from 87.89 as of March '22 to 89.06 in March '23. The credit deposit ratio has also improved to 73.84 for the quarter end. And also, we will be able to maintain the credit ratio going forward in the next financial year. The brand has also taken various initiatives on the digital front, on branch expansion, and we will be ensuring that in the next year onwards, we'll be able to continue the performance that we have been showing over the last 2 years. So thank you very much from my side. I'm now open to the questions that can be asked. Thank you. Over to you, Shilpa.

[Operator Instructions] Our first question is from the line of Dr. [ H.K. Kharbanda ] from Dailyhunt.

My question, where do we stand in terms of growth in overall banking industry?

I understand the question is regarding the overall business growth guidance?

Sir, I intervene here. Mr. Kharbanda wants to know where do we stand in terms of growth in overall banking industry?

Yes. So thank you, Mr. Kharbanda for your question. See, the last year, our overall business has grown by 10.50% with a deposit growth of 7.37% and gross advances at 15.05%. And this year, we intend that we should be growing at around 13% to 14% for the advances and deposit growth would be around 8% to 10%. So we -- what we feel is that as per the market trends, we will be moving with the average growth of the market as of industry as a whole.

Our next question is from the line of Ms. [ Manju ] from Indian Banking news.

I just wanted to ask you, like how much of this growth is because you are able to increase your rates of interest because the repo rate increased by 250 basis points and banks were able to pass on much of those increases because the retail loans selling to the external benchmark and all that. So how much of the profitability is coming from the ability to raise interest rates? And what will be now for the next 1 year, you may not be able to raise rates as fast. So the impact of that.

Yes. Thank you, Madam, for the question. As far as the -- your question regarding the hike in the repo and the RBI repo cycle that is going forward. What we see is that we see our portfolio is around 32% is around in EBLR and 52% is MCLR. Yes, we have some impact on that. But however, if you have noticed, the overall advances after a long time has been -- has now grown steadily for the bank. So last quarter also, we had a growth of over 16%. We have been able to maintain that momentum in the current year. So our average earning assets are also increasing. Our gross NPA is coming down. So the average earning assets also increased. So while we are conscious of dynamics are regarding the interest rates. But it is a fact that we are now also generating income out of the growth trajectory that we are in. Of course, the deposit side, we are lagging from the market to a little extent. However, we feel that we can -- we have been able in December-March quarter, we were able to garner substantial deposits on the retail segment with a competitive rate of interest. We intend to do that forward. So overall, we feel that in the next year also, the trajectory will be maintained. We will be able to work on our growth story. And of course, we will be conscious of the bottom line growth also. So our margins after protecting the margins, we'll be able to grow qualitatively.

You've also been expanding your branch network. Will that also be a strategy this year? Will you further expand your...

Yes, of course. We have been -- for a long time, we have not been expanding our network. So while we will be -- we have already opened 20 branches in odd in the current financial year. So we intend to open another 40 to 50 branches during the year by March '24. We'll be also, in terms of supplementing the branch -- brick-and-mortar branches, we'll also be deploying corporate BCs. We intend to build our network on that. We have a very small number of BCs at [ 357 ]. We intend to bring that also -- to increase that also to a large extent, around 2,000, we'll expect to increase our BCs for the year in totality. So yes, and we will be expanding in the areas where we have not been visible. So far, we are presence in only 310 districts in all over the country. We intend to bring that also as a part of our strategic thought process for expansion. And wherever there is potential, and our presence is not there in the district, we'd like to open our branches in that area.

And one more -- one last question is how did you manage to bring pace down by 139 basis points?

Pardon? I didn't get you. There was some slight disturbance.

No, I'm asking about the gross NPAs have come down quite substantially. You've reduced it by 139 basis points. How did you do it? Was there a write-off or...

There was a write-off of INR 510 crores. And also the -- if you have seen our recovery of gradation slide, my presentation is also now uploaded. So if you see my recovery of upgradation for the quarter, you will find that our recovery has been very robust during the quarter. It has been INR 1,153 crores. Of course, one substantial part of that, of course, was recovery in TW accounts. So looking out of the INR 1,153 crores, approximately INR 600 crores is the recovery in the NPA, normal NPA account. And of course, we also had a write-off of INR 510 crores. That's how -- that builds the story of our gross NPA reduction.

Our next question is from the line of Mr. [ Shiva ] from Hindu Business Line.

So I have also sent my question in writing. Basically, what I wanted to understand is there has been a quantum jump in the fourth quarter profits, right? So can you help me understand what helped you record such a big jump in the fourth quarter vis-a-vis the previous third and second quarters? And the supplementary question is for the entire fiscal -- current fiscal, how confident are you in sustaining this bottom line performance? And is this the first time you are declaring dividend after a gap a few years?

Okay. So I take the questions one by one. As far as the profitability is concerned, as I told in the earlier question that our -- we had a good recovery in the technical written off accounts in 2 of the large accounts, we had a good recovery. So the -- one of the component of the quantum jump in the net profit is, of course, due to that. As far as the sustain...

Can you share the name of the tack-on?

I think those are large accounts, which is in the public domain. We can talk about it. But those accounts have been already in the public domain.

But what was the quantum of recovery?

One was INR 210 crores for us and one was INR 130 crores. So this is the 2 major accounts there in which we got resolved. And of course, the -- as far as your question regarding the sustainability, yes, we were helped by this good recovery in the -- in good recovery. Our total recovery, if you see, of course, has been also maintained as far as the last year's recovery upgradation. We were able to maintain that against a total recovery of 2,100 last year, we were able to maintain the same level, nearly the same level in the current year also. So that is the other part of the story. And as far as the sustainability, yes, we need to -- we can -- if you -- now the bank is also in the -- business growth story is also happening, we are expanding our network. So you'll find the average advanced growth, which was nearly up 2% to 3% last year, has now moved to 15%, 16% continuously. So our income generating capacity is getting expanded, number one. Number two, if you see our core fee income, excluding the treasury and the -- in recovering the write-off, that is also showing some traction. However, and we can -- I can also add to that point is that lot of initiatives have been taken for the bank to increase the fee income in the future. We have done a lot of tie-ups with various third-party partners. So that is going to take traction. Those are going to yield results next year also. So we will be able to maintain the -- we can sustain the net profits of the current year. We are confident we can do that. And as far as the dividend issue is concerned, know last year also, we declared a dividend of 20%. This year, we are maintaining that momentum also and have declared a dividend of 25%.

Sir, if I remember right, you declared a dividend of 0.48, right?

Yes, that's for sure. yes.

And sir, one last point on the capital. Last time, you told us that you will look to raise capital. So what is the update there?

Yes, update of that is that, yes, we maintain that. We have written to the government also for approvals, necessary approvals. Our merchant bankers are also now nearly on board. So we're waiting for the results to be declared. We'll now move ahead on that story. And depending on the market conditions, we will move in that. So we have that approval from the authority. So once we get not from the majority stakeholder. We will start working on that. But the timing of the issue, of course, we will be -- we'll wait for the market to give us the insight on that.

Would it be a debt or equity raise?

We will primarily look for equity, but the options are open for both of us -- for both the areas for this INR 250 crores. But preferably, we'd like to go to the equity route.

Our next question is from the line of Mr. Dheeraj Tiwari from the Economic Times.

Just want a bit of clarity, sir. You said that you are going to raise around -- looking to raise around INR 250 crores this fiscal primarily through the equity route, right?

Yes.

Sir, my question -- the other question is that there's a lot of focus from the government on return of accounts. Is the bank also going to pursue any specific strategy towards that, towards return of accounts? That's my first question. And my second question is, sir, that in the last month, when the Finance Minister met all banks or public sector banks on the crisis that happened in the U.S., including the SVB, then there was a nudge towards expanding operations in GIFT City. What kind of scale up you are looking up on that front? That are my 2 questions, sir.

Yes. I'll let my ED, Dr. Yadav, to speak on the strategy on the return of accounts.

Yes, Dheeraj. I think you have hit a very relevant question and government is also behind the bank that at least 40% recovery should be happened in the written amount. Rather, we are a little bit optimistic that we will be recovering more. And why I'm saying so more because now we have a smaller account of return of also, wherein we have the good opportunity of having the specifically nondiscretionary schemes for the OTS and also some of the big accounts. So definitely, we will be achieving around 40% guidance with the government is [ facing ].

Sir, sorry to bother, but 40% in this financial year or overall?

No, we will be making the efforts for this financial year '24.

Okay. So 40% recovery in return of accounts in this financial year. Correct, sir?

Yes.

Yes. and of course, that -- I just want to supplement that the other answer is that, of course, we will look into our inventory on the return of accounts and take specific steps. We have been doing this quarter -- this quarter, we have had some recovery in the return of accounts. So the percentage of the recovery in the total write-off is in line with the industry as of now. As the industry scales up, we'll also scale up our strategic action points on the recovery of the return of accounts. Regarding your second question, as far as the expanding our operations in the GIFT City. Yes, I was a part of that meeting also and honorable FM had shared, and it was the guidance that was given to us. And because of our size and of our geographical segmental networking that we have, we are working on that, and we have a zonal office actually in Gandhinagar, GIFT City. So we are -- I will be operating -- we'll be looking into that. In fact, I'll be visiting that place very shortly and try to look out for opportunities. If the opportunities are there, yes, why not. We will explore the opening branch there itself.

Our next question is from Mr. Joel Rebello from the Economic Times.

There's a big write-back on provisions this quarter. The write-back has been consistent in the last, I think, 3 quarters, at least even year-on-year. What is the write-back about? Can you give us some more details on this write-back also? And I have a second question, if you can answer this first.

Okay. So as far as the write-back is concerned, you're absolutely right in your observation that we have taken a write-back of INR 473 crores, plus INR 67 crores, overall about INR 530 crores in the year-end overall financial year. These write-backs are due to the recovery that we make in the NPA accounts where we have provided -- nearly some accounts have provided 100% also. So any recovery that comes in those accounts gives us that advantage of having a write-back. And so our recovery has been very robust, not only the TW accounts but the non-TW accounts also, if you see, we have a handsome [ kitty ] of recovery. So that is the [ metrics ] of that.

Sir, can you give us some details what is the recovery this quarter? How was it compared to last year or the quarter before?

As far as -- I think this is in the presentation. I'll just give you the small -- I'll just let you know. The overall recovery has been INR 1,153 crores for the quarter against INR 596 crores of last year. So INR 1,153 for the quarter against INR 596 crores of the last quarter. So there was a quantum jump of nearly INR 500 crores there.

Versus year-on-year basically?

No, no this is incremental Q-o-Q. If you go by year-on-year, I'll just let you know. Year-on-year, is INR 2,100 crores. Actually, total recovery upgrade, you see Slide #18, INR 2,143 crores for last year and this year, INR 2,151 crores. So we're able to maintain the recovery of...

So I just wanted the last quarter -- last year same quarter, the numbers.

Last year same quarter numbers. Okay. Right. One Second. December 21, March 21. Okay, INR 553 crores. Sorry, INR 553 crores.

Substantially better than last quarter also, last year.

Yes. Slide #15 for your reference.

Sure. I'll let cross check. Sir, also, what's the provision coverage for you right now after everything now?

89.06%.

Okay. So you're now pretty well placed basically.

Yes, and we'll likely improve it to more than 90% as we go ahead.

One last thing, sir. Can you give us some details on your loan growth and other income? Where did this come from this quarter?

Other income, of course, primarily the major impact is, of course, the recovery in the write-off accounts, so that's more than INR 500 crores there. And in the other quarters, what was the other point that you said, sorry?

Loan growth.

Loan growth, yet. loan growth was above 15%. Primarily, it was driven by RAM growth of over 20% and corporate growth, how much was the corporate growth? 9.24% was the corporate growth and RAM growth was 20.70%. So we are now looking into how we churn our advanced mix between RAM and the corporate. And if you see my Slide #8, you will find that my RAM percentage as from March '22 was 50.71%. It has moved to 53.20%. While the corporate, on the other hand, has been reduced from 49.29% March '22, to 46.80% in March '23.

How do you expect it this year, sir? How do you expect to transition this year?

So we will like to improve it to 55% from 53.20% now. Our goalpost for March '24 would be 55-45 ratio in favor of RAM growth.

And what's the credit growth outlook for next year? What was it this year, the whole credit growth this year? Or what was...

It is 15.05%, and we intend to be around 13%, 14% growth next year.

It Could be slower you're saying basically next year?

Yes. I see if you have observed from the market, I think the Q2, Q3 growth that was growing around 18%, 19%, will slow down a bit because of the rising -- 1 part of course will be the rise in interest rates that will happen. And we feel, as I personally feel, that '23, '24 growth story on the credit part for the commercial banks to be anything between 14% to 15%. It will moderate a bit. And therefore, we also feel that our -- as far as our appetite is concerned, our market share is concerned and our expanding capacity is concerned in terms of resources, we feel that it will be just in line with the average growth of the system.

Our next question is we have got a message on the chat. It is from [ Priyabrat Biswal ] from the Political and Business Daily. The question is, would you please share your bank's performance in Odisha? And what's your plan for the state for fiscal year '24 in regard to opening new branches, especially in remote areas?

Yes, Odisha. For Odisha and what is the branch expansion plan?

Yes. Branch expansion and actually, if you have seen our slide, we have already opened 25 branches during this year. And in the financial year -- coming financial year, want to open another 25 branches. And this, we are spreading across India, East, South and Western Central places. So we have a few branches in Odisha also.

We can provide the data separately. The details, maybe I'm not having at this point of time. But if you feel it's okay, I'll tell my CFO to share with you post the conference.

Our next question is from Mr. R. Manikarom from Navjivan Express. What steps you have taken to push start-ups in Haryana?

Yes. Dr. Yadav will answer this.

We are just giving the focus on start-up by way of bringing the entire things on digital. And also, we are focusing on both the sides, liability side and asset side. So delicately, we are also coming out with a customized scheme for them. But how much business will be garnered from this kind of segment, right now, we have not been [ crystallized ].

Our next question is from Mr. [ Prashant ] from National Herald News. His question is how much total number of branches does Punjab & Sind have? And what are the expansion plans?

Yes. See, we have a specific slide on the branch expansion. As of now, we are having 1,553 branches after opening 20 branches last month, and therefore, we will be opening another -- we are, as I said, around another 40 branches are in the offering for opening in the current financial year. So we will be expanding our geographies in the -- wherever we are not present in the districts, particularly at the district level.

Our next question is from Mr. [ Suboth ] from Matrubhumi. There are 2 questions. One, your bank has made a good recovery this quarter. What other big recovery do you expect in the future? Second, will your bank provide additional credit beyond its limited loans to the farmers who are currently experiencing heavy unseasonal rains in Maharashtra and the financial losses of small farmers being huge?

Yes. As far as the first part, I'll answer the second part, Dr. Yadav will answer. The first part is that, yes, there are 1 or 2 big corporate accounts, which are in the pipeline under resolution within ARCL/NCLT. We expect some good recoveries from them. And as far as the farmer's issues, Dr. Yadav can comment.

See, this is being a very sensitive as well as important area for agricultures. We are bringing new technology and innovative products for this. Merely Kisan credit card doesn't suffice the purpose of the agriculture growth. We are bringing the investment credit and moreover, bringing our agriculture advances on digitally again. Either independently through our own app or also with fintech collaboration. It will be going to help even to reach out in the Maharashtra and other states also.

Our next question is from Mr. [ Shiva ] from Hindu Business Line.

Just wanted your guidance for NIM for the current fiscal.

Yes, this year, we finished at 2.91. As far as Y-o-Y variation is concerned, we were 11 bps higher than last year's financial year. We lost a bit of NIM in the quarter or during the quarter, Q4. However, keeping in view of our strategies that we have in place, we expect that we will be able to increase it to beyond 2.95% during the current financial year.

Okay. And sir, if one were to look at the private sector banks, right, they continue to enjoy a very, very healthy NIMs. so are you making any conscious effort to catch up with the private sector on the NIM front?

Yes, absolutely right. I think they are a bit ahead of the public sector as a class and they're having NIMs of over 4 and someone having 5. See, as a bank of our size and of our legacy, our basic challenge is of a low CASA base. You need to augment that base in a very strategic manner. So we have to improve our low-cost resources. So at 33.59%, it is a pretty low and we were the lowest in the public sector space. So our first strategic thought process is that we will be expanding as we expand to the various branch network in the various parts of the country, which -- where the potential low-cost resources are there. We will be also trying to build up our portfolio, our asset portfolio based on the returns that we get on certain products like personal loan, gold loan. We are going into a gold lending in a big way. And all these measures, which will give me a return on my assets, on my advances at a higher level than a normal advance because corporate, of course, there is a lot of competition amongst the -- in the corporate segment. So that's why we are building up a trajectory for increasing our RAM segment growth at least to beyond 55% and touch base sometime within 2, 3 years' time, around 60%. That is a -- that would give me a margin on my -- return on my assets. Therefore, it is a two-pronged approach that we need to increase, improve upon our income capacity, generation capacity has to improve. So my -- as you see, as my corporate credit grows, my RAM credit grows, we are having a steady return on my average earning assets. So this time also, my credit growth has been more than 15% and is a back-to-back at 16.54% of last quarter. So all these factors, I'm very sure, are going to yield results in the current year and then to strengthen my names. But to reach the level of the private sector, we also will need to work on technology, utilization, reduction of operating costs. So these are all part of our strategy that we have. We have created -- we have floated RFP on fintech collaboration. So those vendors will come on board. As the fintechs come on board, we'll be able to -- we'll be -- and the best of the services can be given through various technologies and these fintech companies, products that they have. So we -- it is a step-by-step effort that we are making. We will be moving towards. We cannot move to -- in the one pioneer, but our aspiration would be to be as much comfortable NIM as it is possible.

So would you like to leave a number with me on the aspiration on the CASA side? From 33, where would you like that to be by March '24?

Ideally, it would be right to add 1% to that ratio. But if you have seen the migration of the CASA to the term deposits of all the banks that have declared results so far, you will find as far as the ratio is concerned, there is an impact in the private sector banks also, per se. Even the best of the private sector banks have lost on the ratio. So while the ratio is important, our ultimate aim would be to generate the quantum of the resources on the CASA that is -- that we need to build upon. So ideally, in terms of our guidance, I will say, we -- now it is 33.59%. We should be 1% higher at the end of March '24.

Our next question is from Ms. Suman Gupta from Mumbai News Express. Sir, do you plan to raise priority sector advances?

Yes, Dr. Yadav.

Yes, ma'am, indeed, as you must have observed that our private sector advance is already crossing the benchmark of 40%. But definitely, under the RAM segment, which we are thinking that on 53%, we are taking 55%, my private advance will definitely grow.

We are already -- as far as the regulatory, I'll just supplement Dr. Yadav. As far as the regulatory guidance is required for the priority sector, 40% is a regulatory limit. We are now at 55% and that March '23. So we'll be very happy to be part of that story.

I have my next question from Ms. [ Priti ].

Sir, I'm Priti from Varma. Can you please share guidance on margin?

Yes. As I just said that my guidance of the margin would be over 2.95% for the financial year as a whole. We were at 2.91%. We had increased our margins from 2.80% of FY '22 to 2.91% in FY '23. So now our guidance would be beyond 2.95% for the March '24 as a whole.

What is your strategy to increase the margin?

See, ultimately, it's a multipronged approach for increasing the margin. We need to increase our income and capacity both on the asset side and on the investment side also. So we have taken multiple strategies towards that. As I just mentioned a few moments earlier, that our RAM growth will be predominantly the guiding factor, which will get better yield on advances. So we like to increase the ratio of the RAM component going forward. And of course, the -- as I said, that the low-cost resources, particularly on the CASA front, we are not doing to that satisfactory level in the current account level or savings account has a steady base now. So what we are now doing is that a lot of digitized products we are bringing into the system. We are having upgraded our unique app so that the customer convenience, once the customer convenience increases the stickiness of the customer improves. We are bringing a lot of value-added products like credit cards, health insurance, life insurance, mutual fund business. So these will all attract a new generation customer. We are taking a lot of effort to mobilize bulk salary accounts that helps my cross-selling, on my retail products, and that gives me good yields, and we have tested some success in certain segments, we'll continue to build on that. So -- and of course, another area which we are working on the low-cost resources is that we'll try to build up a good healthy institutional CASA base. So the bank has now taken a lot of initiative towards that aspect. So we generate low-cost resources. We generate our high-yielding returning advances, and that will contribute significantly to my NII and in turn, my name.

Our next question is from Mr. [ Dawud ] from Any Time News. Okay, I think there is some audio issues. I'll take his question. He wants to know, sir, what is your branch expansion plan in the current financial year?

Yes. See, last year, we opened 20 new branches. So we are at 1,553 number now at this point of time. And current year also, we'll be opening around 40 branches, particularly in the areas where we are not present in the districts where we are not present. We are only present in around 313 districts so far. So we'd like to turn 18 districts to be precise. So we'd like to expand to those districts where we can build upon our brand and generate our business for the bank. So overall, the plan for the current year would be around 40 more. We are at 1,553 now.

He has 2 additional questions. It's in Hindi. [Foreign Language]

Yes, ma'am, I will respond the second question. [Foreign Language]

I have an additional question from Dr. H.K. Kharbanda. He wanted to know how will you deal with loans in increasing interest rate scenario?

So that's a pertinent question to be precise, actually. In the loans that you're increasing, see, ultimately, we need to monitor while we lend. So there are 2 aspects, lending and monitoring. So while the lending is happening, we find that the rise in interest rates are peaking out to a certain level. So the impact on my building a book for the loan portfolio will not be very grossly impacted. However, in view of the rising interest rates, our collection efficiency needs to improve. We have improved our collection efficiency to a large extent. In fact, over the period of 1 year, our collection efficiency has moved from 75% to nearly 92% at this point of time. So we are in touch with our customers either to -- I'm telling the importance of maintaining their account as a standard account. And based on their feedback, we talk with them whether to increase the EMI or elongate the repayment period as performance under the regulations. So all -- it's -- we take a 360-degree view on this and act on it, and we will be watching the situation very closely. Our collection efficiency has improved so my retail NPA, it has also improved. You will see my sector NPA slide on Slide #15. My retail NPA has moved down from 5.09% to 2.91%. So there is significant improvement in my retail NPA. So with all these strategies in place, I think we'll grow our expansion expected in the retail segment is over 22% to 24% in the current financial year. And we hope that we'll be able to maintain that growth story.

Our next question is from Mr. [ Dharyabardhan Singh ] from [ Business Entities ]. His question is, Punjab & Sind Bank's gross NPAs were down significantly by 520 bps in fiscal year '23. What is the reason? And will this trend continue in the coming financial year?

Yes. See, again, here, the gross NPA has reduced due to a multipronged approach. We had a very good recovery here this year also. And as I told earlier to some -- another question, our overall recovery I mentioned of for the entire year was INR 2,151 crores that is brought down my NPA. And of course, we have done some technical rate of accounts as we [indiscernible] the regulations, which also has helped to bring it down. So it's -- while we also keep -- it's only a balance sheet purpose, we do the technical write-off. We continue to maintain strong vigil on the recovery, and that is paying dividends also. We had a good recovery in the TW accounts in the current year also. So therefore, we -- it's a multi-strategic approach, which has helped us to reduce our NPA. And not only that. Another area which we have done is we have done a lot of structural changes in the bank for preventing future delinquency. One is for the legacy book that we carry. But we are also conscious of what are the lending that we are doing at the current point of time. So we have improved our credit underwriting standards. We improved our -- we have segregated our sourcing and sanctioning of loans. So all the loans are not sanctioned by the back office structure. So that will also help qualitative improvement. And as I also said, another area which we're working very closely for prevention of slippages, is on the collection efficiency. Our company collection efficiency has increased significantly. So we're bring latest technological skills -- weapons, which are presently in the system, which will further improve our collection efficiency. So -- and another area, of course, would be the qualitative loans that we will do. So while we recover, we do qualitative lending, we improve collection efficiency. So this is -- we are multiple strategic approach to reduce the NPA. And your last question was regarding the guidance, and we have given a guidance of more than INR 1,500 crores of recovery upgradation for the current year. Our guidance slide is available at the end of the presentation.

Our next question is from Mr. [ Sushil Kumar, Dainik Janmant ]. His question is, there are 25 new branches, which have started. Out of this, how many branches are there in Mumbai? And what is your future expansion plan in the state?

That -- we have details of that. At presently, I don't have the overall. But we have opened in overall in the central part of the country, southern part, eastern part. So my -- I can provide the details separately to the person who has asked the question.

Our next question is from the line of Mr. Nikesh Singh from Business Standard.

Sir, in the last meeting presided over by Finance Minister, there were certain instructions for the bank to like enhance the share of loans through external benchmark lending rates. So how do you consider that aspect in this financial year? And the second aspect is, sir, how do you see the slippage in this quarter across the sectoral wise? Like what has been the agriculture? What has been the MSMEs? What has been the corporate slippage on that aspect? And sir, my other question is that how do you see the net interest margin going ahead being impacted by -- in this financial year? Like will it be sustained? Or will it go down?

So as far as the EBLR and MCLR is concerned, my bank's present portfolio, EBLR is 35%. MCLR is 52%. So we are building it up. This has increased by 3% year-on-year. So as we increase our RAM segment, we'll be ideally, we are not giving a specific guidance, but we'll be ideally trying to reach our EBLR around 40% over a period of 1 or 2 years. So that would be the area which we are looking into. I think you also asked about the NIM guidance, I understand. NIM guidance, so that would be around -- above 2.95% for the entire year. Please let me know if I missed out on one of your questions.

Our next question is from Mr. [ Nikunj Ori ] from Reuters.

I had a query. Goyal, sir, has today announced that they're going to push for voluntary insolvency resolution proceedings before NCLT. So I wanted to check if the bank has any exposure to the year.

You said Goyal, I understand?

Yes, Goyal.

No, we don't have any exposure. No, we don't have it.

And secondly, sir, I wanted to ask you, like is there -- there were reports that the government wants all banks collectively to improve their focus on recovery from written-off accounts. So is there -- is that the plan? And would you also -- have you also set targets for -- internal targets for yourself?

Yes. Yes, that is what we are also working on. And our -- we had a good recovery in written off accounts last year. So we'll also have our action plan ready. We do it in our own way. Now since the directions are coming, so we will be now much more structurally focused to increase the recovery in the write-off -- in the written off accounts. So let us see. We will, but that is a strong focus area for us also because it helps my balance sheet to -- qualitatively also.

Any targets that you set, sir, for yourself for all recoveries?

Dr. Yadav, do you want to comment?

So as such, it will be very challenging right now to give any numbers. But definitely, the focus which has been given by the Government of India that we will be following that.

Our next question is from Mr. [ Anil Pandey ].

You have just mentioned your proportion of 30 -- more than 35% of EBLR and more than 50% of MCLR. How do you agree that by raising the MCLR proportion in benchmark of loan book we can increase our margin? And what are efforts are you doing to increase your MCLR proportion in loan book?

Yes. See, it's a dynamic call that we take, depending on the market dynamics and the -- what RBI, NPC decides on the repo rates. Therefore, as of now, yes, we are at 35% of EBLR and MCLR of 52%. And this EBLR component was around 31%, 32% 1 year ago, so increased there to 3% plus. As I said also earlier that we would like to increase it to not a guidance as such, but our aspiration would be to improve this EBLR concept -- EBLR portfolio up near to 40%. As far as MCLR, yes, we -- depending on our calculations that we have on the cost of funds, we have revised our MCLR significantly as the hikes have happened over the past 1 year or so, and we have increased our MCLR. So as the market dynamics move, and as the -- as our ALCO also takes a view on that, we will be closely monitoring. Our ALCO meets every month, on a particular day of the month, and assesses and reviews the overall requirement. So as of -- as our offers on the present context, we find that the MCLR component, on the corporate segment at least, has taken some traction. There's a lot of queries on what is our MCLR and how are we able to price our portfolio. So there's -- we will be -- as we build our portfolio and we go for the credit growth, we will build our MCLR to that extent, depending on our ALCO decision on the matter.

Our Finance Minister has [ topped ] of INR 35,000 crores of booster savings. In this default rating of income tax, so can we expect the deposit growth in our bank also?

Yes. I think that's what the market sentiments are all about, absolutely right. And that is why we have now taken out, as all banks have also done in some way or the other. We also are giving very attractive rate of interest on our term deposits. In fact, in the last quarter, March quarter, our 222 days product was a very, very, very significant impact on our mobilization of resources and we got a lot of feedback and a lot of new customers were added by this process. So now we are -- based on the current scenario, we have got attractive schemes in 555 days, 601 days. So all these are all part of the story to tap wherever resources are there in the market, to tap the best of the customers in our fold. Our bank is in an effort to acquire new and new customers. So while we do all sorts of such activities in terms of product dimension, we also have to parallelly work on our digital journeys, our customer experiences that they go through in the digital space. So we are putting a lot of effort on the digital story also in the current context. So we will be as the new is regarding the direction of the government, we are also in tune with that and implementing the plan.

Finally, may I know the nonperforming investment, how much do we have in PCR for NPI? Nonperformed investment, how much do we have?

You're talking of nonperforming investment, no?

Right. NPI, yes.

Yes, INR 450 crores we have, INR 450 crores.

Our next question is from Mr. [ Mohan Kulkarni ] from [ Ariva Express ]. His question is, are you in the expansion mode? How about your presence in rural area, particularly in South India?

Yes. Actually, as I said earlier, [Foreign Language] so while expanding [Foreign Language] where we do not have the presence. [Foreign Language] At least 25 branches should be invariably in rural India. That's the RBI requirement. Therefore, at least 1/4 of the branches will be rural branches. [Foreign Language]

I have an additional question from Mr. [ Dharyabardhan Singh ] from [ Business Remedy ]. His question is what is the position of bank and priority sector, agriculture, small farmers, vehicle section, micro enterprises and advance?

Yes. I think the priority sector position is overall against target of 40%. We are at 55%. In agriculture, against 18%, we are 21%; small and marginal farmer against 9.5%, we are 11% plus. Vehicle section, we are 12% -- 12.68% and in micro enterprises, 14.31%.

Our next question is from Mr. [ Umendra Dibyaraj ]. [Foreign Language]

[Foreign Language]

Our next question...

One question, Shilpa, regarding Odisha. I just like to confirm that we have a -- we see branches are to be opened in 3 rural areas of Odisha. That's our plan. We are working on the modalities. I have the details. It can be shared separately. But as far as Odisha is concerned, we have 3 branches lined up in the rural area branches, rural area.

Our next question is from Ms. [ Priti ] from [ Vama ].

Share recent digitalization initiatives taken by your bank?

Thank you for the question. We have a very unique app, which is quite unique in our -- and the name, it suits our name also. The name is unique. And it has certain unique features, which is an outlier in the industry in terms of having the same user experience in both our web and the mobile app. That's a new dimension we are adding. We are adding to that. So there are a lot of -- while we implemented this new app, we had gone through certain [ treating ] issues. Those things have been greatly solved. And in my -- if you see our rating in the Play Store, it has significantly improved, 4.2 out of 5 is a significant jump. We have and both in the Apple Store and the Google Play Store. So first of all, on the digital story, I'd like to mention here that we are giving a lot of focus to improve our app and adding value-added services. A lot of other already -- and customer acquisition. We are trying to build upon on instant online account opening, virtual debit card, applying for digital loans through MSMRetail, integration of compliant portal. If the preapproved personal loan category, which was -- we were lagging behind compared to other banks, today is a preapproved personal loan is also available in our digital app. We have created instant recurring and fixed deposits, opening, closing, filing of tax through this app and generation of UPI pin through other and OTP. And in terms of the future initiatives that we'll be taking is that we are going in for Whatsapp banking, wearable banking, app banking, cardless cash withdrawal, online current account opening. We'll have reward programs also, and various other value-added services. So our digital transactions are increasing manifold. We have a growth of 78% in person in our digital transaction. Our new merchant acquisitions are going -- showing a very healthy trend. Our UPI users are improving 38% Y-o-Y basis. So these are all areas that we are working on. Ultimately, we want to make this app a super app, and we will be doing that as our technological upgradation happens on the core banking. We will be supplementing after the upgradation happens, which is happening any time down the quarter. And we'll be able to improve our standards of mobile banking in a big way. And of course, we'll also be, other than the digital app, a mobile app, we'll also be working on how we do fintech collaborations, how we do -- bring new products on the digital and fintech with fintechs on board. We will do co-lending as a big business initiative. We'd like to bring more and more preapproved loans category, like gold loan, housing loan, vehicle loan through our mobile app. So we have a very, very aggressive plan on our digital journey. And maybe 2 years down the line, we'll be in a position to be one of the best in the industry.

Best wishes and congratulations. Sir, one more question. My favorite question, sir. Representing women's organization, may I know your reason for succession planning, particularly regarding women executives?

Yes. In my board room, I don't know whether you can see all of them. One of them is my CFO, who's sitting left to my side. And the other, I just tell my person to show a new GM that has just been promoted, Madam [ Quatra ]. You can just see as my camera will be spinning. Okay. Yes, she has just been promoted in the GM cadre. We have -- she's the only General Manager in my -- woman General Manager, amongst my GMs and we have one -- a CFO who is handling -- women CFO, who is handling the very critical department of ours. So I think this is a reflection on what we are thinking about our gender diversity.

We will take the last question from Mr. [ Daul ] from Anytime News.

[Foreign Language]

[Foreign Language] I'll just tell you. Slide #29, we have kept a slide on treasury. Treasury is [Foreign Language] as far as size. So we have a healthy book of [Foreign Language] on March '22, say, March '23, [Foreign Language] Slide #20 interest on investments, 12.60% increase Y-o-Y due to the investment. So trading profit [Foreign Language]

As there are no further questions from the participants, we now conclude this conference. Should you have any further queries, please reach out to Shilpa at 7907431859 or [ [email protected] ]. Details are mentioned in the Webex chat and the media invitations sent to you earlier. On behalf of Punjab & Sind Bank, I thank each one of you for joining the press conference today. You may now disconnect your lines. Thank you. Have a good day ahead.

Thank you. [Foreign Language]