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

Good afternoon, ladies and gentlemen. I'm Shilpa Abraham, the moderator for today's earnings call. I welcome and thank each one of you for joining us today for the Q3 fiscal year '24 financial results of Punjab & Sind Bank. Please note that this 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, Dr. Ram Jass Yadav; Executive Director, Shri Ravi Mehra; and Chief Financial Officer, Ms. Mahima Agarwal. I would now like to hand over the conference 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.

Yes. Thank you, Shilpa. And good afternoon everybody for joining this to the post Q3 financial performance on the con-call today. Myself, Swarup Kumar Saha, MD, CEO of the bank. Along with me are my 2 colleagues, Dr. Ram Jass Yadav and Mr. Ravi Mehra; and my CFO, Madam Mahima Agarwal. So we have declared our results. The Board had approved the results yesterday, and the results have been posted in the websites and the stock exchanges. I'll just give a brief on the highlights of our Q3 performance of this year and then we'll open up the forum for the question-and-answers. So in spite of the challenges of the ecosystem of the migration of the CASA deposits to the retail term deposits and the overall global domestic scenario, the bank has shown some significant improvements in the Q3 of the financial year '23-'24 compared to that of the Q2 of the same year. And some of the salient features where the bank has shown improvement is in the CASA ratio. The CASA ratio sequentially has improved by 158 bps to 32.77%. The NIM of the bank has improved sequentially by 21 bps to 2.54%. The net interest income has improved sequentially by 9.48% to INR 739 crores. The noninterest income has grown by 35.07%. The gross NPA has improved to 5.74 -- 5.70%, improvement by 53 bps. Operating profit also has sequentially improved to INR 277 crores. The yield on advances has improved quite substantially to 8.91%, and which is -- that is showing a sequential improvement of 29 bps, and this is one of the better yields that the -- compared to all the other banks that have shown so far, I'm talking of the public sector banks. In terms of the overall business growth on the Y-o-Y basis, the total business, the bank was able to cross the milestone figure of INR 2 lakh crores in Q3, showing a total business growth of 7.84%. The deposits grew at 8.09%. Retail term deposits, that is also a good factor that is impacting positively in our bank's overall performance is the retail term deposit is also showing healthy growth and is nearly 9% in terms of the Y-o-Y basis. The savings deposits has grown by over 6%. The current account deposits have grown by 9%. The CASA on the overall Y-o-Y basis also has grown 6.38%. Again, the growth of 6.38% is better than many of our peer banks. The CASA ratio, of course, Y-o-Y has declined by 33 bps, but our decline, if you compare the results of our peer group and some of the other public sector banks, our Y-o-Y dip in the CASA ratio is comparatively less than the other banks. And we are making all efforts to improve our CASA portfolio. In terms of the advances. Yes, advances growth has been muted at 7.48% due to bank's strategic decision to enhance our ability to rapidly changing market conditions, which is of the high interest rate scenario on the retail term deposits and the rate war that is going in the corporate advanced segment. We have concentrated this quarter on focusing on RAM growth, and that is why our retail growth has shown a moderately healthy growth of 15.5%. Agri has grown by 6.12%, which in September was only 2.32%. MSME also has grown at 12.84%; in September, it was 7.63% only. The RAM percentage has improved from 49.47% to 51.46% on a Y-o-Y basis. The corporate book, which had grown at 12.81% last quarter has now grown at 3.25%, mainly due to the reasons that I just conveyed before -- in this -- before this data point. The core fee income has increased by 35.29%. The yield on investment is also at a healthy level of 6.84%, and this yield on investment again is better than most of the public sector banks. The provision coverage ratio stands at 88.16%. It is a slight dip, and we'd like to scale it further towards 89%. In terms of asset quality, our fresh slippages have been contained at INR 228 crores, the lowest in the last 4 quarters and compared to the INR 340 crores in the previous quarter. So the slippage ratio has been contained at a reasonable level of 0.30. And over a 9-month period, it is 1%, which is aligned with our overall guidance of below 1.25% for the entire year. Our SMA 2 book above INR 5 crores, again, also has shown improvement and has been reduced to INR 201 crores from INR 407 crores last quarter. The net profit has declined to INR 114 crores from INR 189 crores last quarter, primarily due to the additional provision of INR 150 crores towards wage revision and the overall impact on the interest rate of the -- on the deposit side. But the one point I would like to mention here is that if we see our sequential cost of deposit has slightly increased by 3 bps, but compared to that, our yield on advances has increased more substantially on a sequential basis. So we were able to improve our NII on a sequential basis much better than what we were doing in the previous quarters, and that we would like to continue in the future as well. The capital adequacy has been reduced to 16.13%. This is primarily due to the impact of 81 bps on the RBI circular on increasing the risk-weight assets on NBFCs. Otherwise, we are still at a healthy position of 16.13%. So that was all from my side in terms of my opening remarks. I now welcome all the questions that are -- that can be asked to us which we can answer. Thank you.

[Operator Instructions] Our first question is from Mr. [ Marshall ].

Like during the current quarter, for example, this quarter, March ended 2024, how much of the recovery you foresee from our NCLT or other bad debts written-off cases?

We expect around INR 350 crores to INR 400 crores to be recovered.

INR 350 crores to INR 400 crores, right?

Yes, yes.

Okay. And the second thing that, how do you see our like demand picking up in terms of our advances?

We are -- see, let me put the background on this to answer it to help everybody to understand. We know that we are in a very, very dynamic ecosystem, and therefore, the credit growth is a part of that. As a bank which has its constraints on the low interest-bearing liability side, so we are very careful in improving our -- or augmenting our credit growth. So overall, we are able to -- we're trying to rebalance our portfolio in such a way that we are more focused on the bottom line and we protect our NIMs and other profitability ratios. So in this quarter, we look into credit growth for this quarter, at least, around 6% to 8% range.

Very good. And in terms of NIM, like what kind of growth you are like looking forward for NIM?

NIM, as of now, the 9 months NIM is at 2.50. So we'd like to have it around 2.50 to 2.55.

Okay. My last question regarding this, like all other PSU banks have floated QIP. So what are your plans in terms of capital raising and the QIP?

Yes. So we had also in our bank also planned to raise an amount of INR 250 crores last year, but we feel that the time was not correct for us. So now that we have now declared our results, so we will go back to our capital planning committee very shortly and we will announce as soon as we decide on the quantum and the timing on which [indiscernible] point of time we will. But we have our plans on the capital raising issues also. As of now, our capital adequacy at 16.13% is still very healthy and comfortable. So we will wait for the opportune time, but we will announce it as soon as we decide on the quantum.

So do we have the enabling resolution in place or you have to float the new resolution?

No, no, those things, we will be floating afresh.

We have our next question from [ Ms. Neha Shah ], an individual investor. Sir, there are 2 questions. One, can you throw some light on what has led to NIM contraction of 8.20% Y-o-Y? Do you see any pressure on NIMs in the coming quarters? Second question. The total business and advances for the quarter has increased by around 7.5%, whether this growth rate will be sustainable?

Yes, thank you for the question. The NIM, yes, it has gone Y-o-Y, but the basic reason, as I told in my opening remarks, because of the interest rate movement on the retail term deposit side and the migration of funds from the CASA to the retail term deposits. And also the market dynamics of credit is also showing that there is a price war being in the market regarding what should be the optimum level for the pricing on the asset side. So as a bank, we thought it was not prudent for us to go aggressively on the advanced top line and protect our bottom line. Therefore, the contraction of some of my income is due to that, also that we are -- we have not aggressively moving towards low-yielding assets. So therefore, we had rebalanced our portfolio. We are rebalancing it. And -- but the green shoots are like this: if you see our sequential performance, you'll find that there is an improvement in our NIM also. And we'd like to maintain it, as I said in my -- just a few moments earlier, that we'll maintain it at between 2.50 to 2.55. As far as the business growth of 7% -- 7.84%, I think it is sustainable, and we'd like to continue with it, between 8% to 10%.

Our next question is from Mr. [ Saket Kapoor ].

Sir, firstly, for this quarter, I think so the interest expenses, there is a significant increase in the interest expenses. So if you could just give us some color on the repricing of our liability franchise for the quarter. And going ahead, how much more of it is left to be done? And also for the -- our advances, what's the target -- what have been our current yield on advances and what are we contemplating for Q4 going ahead? And also, sir, on the free float part, what is the message from the government in terms of our -- maintaining the norms for the free float? I think, so the float is only around 2%. So these are my few questions, sir.

Yes. Thank you for your questions. As far as the interest expenses are concerned, yes, there are 2 components to the interest expenses: one is on the deposit side and one is on the other side, that is particularly on the borrowing side. So we have been trying to augment our credit and a mix of liabilities and a mix of borrowings. So as the pricing escalation happens in the market -- happened in the market, the migration of some of our low-cost CASA also has moved to the retail term deposits. But the good part is that, as I said in my opening remarks, if you see our cost of deposits and you compare it with the yield on advances, you'll find that incrementally, my cost of deposit has only moved by only 3 bps and while my yield on advances has moved by 29 bps. So that's the messaging that we'd like to do that. We'll continue to grow qualitatively keeping focus particularly on the -- on our bottom line. And so the first part of your question regarding our expenses, so to answer that, the component was balanced between interest rate on term deposits and interest rate on borrowing. So that is the overall composition. So our deposits have migrated, so as I said. So -- but we have been able to contain it, much like the other banks, if you observe the position of other banks, the sequential increase in the cost of deposit has been much higher than us. And in fact, our sequential increase in our yield on advances has also been higher than the other banks. So if on a comparative study, at least for this quarter, we find that we have been able to manage our yields in -- NII in a better way. And that's how our NII also came on a positive territory from the sequential basis. Regarding the messaging of the government side, of course, there is no -- as a message, we will announce it if there is any. As of now, we don't have anything to share on that part. Did I answer all your questions?

We will move on to the next question from Mr. Nitin Gandhi. He has 2 questions: one, what is the rationale for the increase in unrated instrument, 7.2 to 10.1 and what is the yield? Second, if you could share your thought process for the cost-to-income ratio as it is high at 75.

Yes, yes. As far as the cost-income ratio is concerned, this has been high because of the one exceptional item of INR 150 crores that triggered this increase in the cost-to-income ratio. If we take out this exceptional item, then our cost-to-income ratio comes around 65.20. So that is the exceptional item that triggered this increase in the cost-to-income ratio for this quarter. And for the other question regarding the unrated accounts, I think that was the question, no, that regarding what is the rationale of unrated accounts. Yes, see, overall, if you find our -- that happens on the dynamics of our daily loan book. And I think we -- overall, if you find that in the BBB and above, that has increased. So the total rating and BBB and above has increased and the BB and below has also -- has declined. So our quality loan book is maintained. And as far as the unrated accounts, these are normal fluctuations that happen in any circumstances. If further details are required, we'll be happy to share it with you.

We have a next question from an audio person. Sir, may I request you to please introduce your name and your organization?

I'm not an unnamed person. I'm Ashok Ajmera, I'm the Chairman of Ajcon Global. There was some problem in the, I think, in that link which is given. So I could get on to only after 15, 20 minutes through this audio call. Sir, our profit has got really impacted in this quarter after doing well up to the last quarter. And our employee cost has gone up by INR 110 crores, INR 114 crores, that is because of mainly the rate in the -- increase in the rate of this thing. So can you give the calculation for that, that from 15% to 17%, when it is now finalized, how much provision we were making in earlier 3 -- 2 quarters we have made? And what is the impact in this quarter of all these 3 quarters together, sir?

See, we were making at 12%. So additional, we made INR 150 crores for this quarter.

You added -- and from the next quarter, again, it will be streamlined? It will be only...

Yes, yes, because this is -- we completely have taken care of our wage revision impact.

All right, sir. Second, sir, my question last time I had asked on the provision for tax. So we've continued in the old regime. And I think our DTA assets balance is INR 1,658 crores as per the note. So now, say, from INR 106 crores in the last quarter, we have come down to INR 66 crores maybe because of the less profit. But can you elaborate on the total tax calculation? Because ultimately, the bottom line, whether the tax is payable or not actual in cash, it affects the bottom line, the net profit. So going forward for the whole of...

Yes, please carry on. Mr. Ajmera, please carry on. Please carry on.

Going forward for the whole of 2024, what will be the situation on the tax front, sir?

Yes, sir. Actually, whatever brought forward losses we have, we have consumed in this quarter, sir. So both MAT and in the normal tax, we were having tax. So from the next quarter, we will be having tax in the normal and the MAT credit will be down, sir. And we have DTA assets also and MAT credit will be down. But we are following -- at present, we are following the old tax regime only, not the new tax regime.

Yes, yes, you're following the old tax regime.

Yes.

Okay, sir. I just observed, sir, in note number, I think, 12, that our SR total has been increased to INR 96.63 crores, though it is 100% provided for. But the rating withdrawn from 1 SR of INR 73.67 crores, so which is the new SR aided that amount is not given? And whether this is NARCL or this is any other ARC?

Sir, it was SREI resolution happened. And due to that we have received SR, it is that only, sir.

No, from whom -- I mean, is it from any other normal ARC?

NARCL.

NARCL, sir.

NARCL or other ARC?

NARCL.

So it means it is government guaranteed SR, isn't it?

No, this is not government guaranteed. This resolution didn't happen under government guarantee.

Okay, okay. That is why we provided for 100%...

The resolution was an exception because NARCL bidded as an ARC. It was not through the NCLT resolution. So there's a technicality in this. So this SR of NARCL for SREI resolution is not government-backed guarantee.

All right, sir. Again now, sir, on the credit growth and the resultant income, what are your views now? Going forward are we -- I mean, like we have been talking about it for a long time. So what is your -- basically your thinking about looking beyond the normal -- the standard planning for the increase in the credit? Can you -- can we think a little beyond that? And can you give some color on how credit -- expected credit growth in the next quarter?

Yes. I think you joined a bit late. As far as the guidance is concerned, I gave overall guidance of this quarter, around 6% to 8%. But to answer your question in totality in terms of the future planning of the bank, we are a bank which will continue to focus on our revenue-generating assets, which will give me more returns. As a bank, we know that in the market, the credit growth that is happening, is happening at a very, very steep rate decline, means and there's a lot of price war that is going on. And for a bank of my size and my liability resources, it is not prudent for the bank to aggressively lend at a rate which is much lower than the rate of the cost of deposits that we are gathering every day. The markets are lending at rates at much below the cost of deposit that we are mobilizing at this point of time. So that is not remunerative at all. So -- and I don't have that legacy strength on my books to -- on my retail term deposit, on my CASA, which can augment that aggressive credit growth, which is happening in the industry. Therefore, we have to play along with our legacy and our business models. Our business model as a small and beautiful bank will be a bit different on the -- compared to the other banks. Going forward, what we will be doing in terms of segmental credit growth? As you all know, that we have upgraded our Finacle, that was a big achievement in this quarter. We are now very, very upbeat on how we can leverage this upgraded technological platform. We have upgraded to the Finacle 10 version, which will enable us to provide services at par with any other banks on the credit side, whether it is on the API-linked -- using API-linked credit underwriting engines, whether it is preapproved personal loans, whether it is preapproved housing or vehicle loans, ACCs, agriculture, mudras. So all these sort of avenues are now going to increase for the bank. We are now -- our -- any migration of such a big nature requires 2, 3 months of handholding in terms of stability. I'm happy to share with you that the Finacle 10 has been stabilized to a large extent. And now we are having a base platform where we can collaborate with fintechs, collaborate with other agencies, NBFCs where we can do lots of digital lending within the RBI guidelines. So that is what we are looking for, and we will create our own niche segments in the country. Our segmental -- our geographical spread is still North based. So we need to expand to the other areas of the country. We are expanding to the other areas. But as we upgrade our technology and we upgrade all digital services, value-added services, we can -- we'll be able to do more and more -- much more technology-driven services, which will help the bank to grow its balance sheet. We're doing co-lending in a big way. We look into assignment of pools also in the coming future because now we are having -- trying to integrate the API. So we'll have that possibility of having assignment of pools that other banks are also doing. But we'll also focus on some of our key products like GST lending products, personal loans. We have excellent personal loan product. We have an excellent gold loan product, which is having a lot of traction. If you can see in my presentation has shown that the gold loan is increasing at around 35%. The personal loans are also increasing handsomely. So we will continue to focus this and we are tweaking our products to suit the current environment. In the agriculture sector also, we will have concentrated on warehouse receipt financing, on farm mechanization, food processing organizations. So overall, we have -- we are now focusing on these segments. So our RAM percentage has gone up now 51%. We'd like to take it up between 53% to 54% by the end of this March and scale it up to around 60% in the next financial year. So that would be the overall macro dynamics of our bank's credit growth.

There is a slight clarification from Nitin Gandhi from Inoquest Advisors. As an exceptional item of INR 150 crores, will it continue to Q4 and the next year?

No, that will be not to that extent because we have fully provided for the wage increase. So that will stabilize in the coming quarters. It will not be to the level which was in Q3.

Our next question is from Mr. [ Saket Kapoor ].

Sir, pardon me, have you mentioned about what is our CD ratio currently for this quarter?

Yes. I think it's in the presentation, it's 70.60.

And what are the likely target for -- going ahead?

We'll be -- you must be reading in the newspapers on the CD ratio component and how the RBI is cautioning the banks overall on a macro basis. So we will not go overboard in our endeavor to increase our CD ratio. We will do whatever bank's business is profitable. Bottom line would, if it's profitable business, that the bank will continue to happen. To that extent, whatever CD ratio is to be maintained, we'll continue to maintain. But I foresee within -- by the March quarter, we'll be around 71 to 72.

Sir, and for the treasury part, I think so there was a very strong reaction from the bond market today also post the vote on account by our Honorable Finance Minister.

Correct.

Sir, how would this change the dynamic going ahead? If we see the bond yields trending in a band lower to 7%, something in the vicinity of 6.5% to 7%? How will -- what will change for banking space? I think so there will be a onetime gain on your treasury book going ahead from MTM. Other than that, how will it change the landscape for you in terms of NIMs and other things, sir?

It will have a --- thanks, at least, I'm very happy you have asked this question on a very appropriate day today. Yes, the MTM is a -- it plays a big factor in our overall balance sheet management of any bank, per se. So with the yields movement, downward yield movement of -- as we have seen today, and the expectation that we have over a potential Fed cut of 75 bps and a potential repo cut coming -- going forward, we feel that it will have a very good impact on our overall operating profits. It will have a very good impact on our overall impact on our cost-to-income ratio. And that will also change the dynamics of the -- of every bank's balance sheet. And for our bank of our size, we also are -- we are providing on a depreciation basis every quarter over the last 3 -- last -- apart from Q3, over the -- if you leave aside Q3, if you take from March quarter, we were providing on the MTM due to the yield movements. Q3, there was some correction. So we got some benefit out of it. But we look forward to some handsome benefits that we get over the Q4 and going forward, if everything goes okay as the predictions are. So we expect the dynamics of the balance sheet will change quite dramatically. If whatever you are saying at 6.5% to 7%, if that happens and if there is a possibility, yes, that can happen. But when it will happen? The timing of it is -- which still needs to be looked into. So -- but the ecosystem, the dynamics of -- are all now moving to the positive direction of further rate cut. In fact, without a rate cut, the yields have moved today by 8 bps, I think. So that shows that we have a lot of things in store in the coming future. And with the -- as the things play on, we will be very, very positively impacted by this development.

But sir, will it affect the NIMs also going ahead or -- the cost of fund will also go down and things will get realigned, that is what you are trying to say?

Yes, it will get realigned. But you see, the dynamics will be such that, of course, what happens is with a rate cut, I don't know what is the timing, whether it is -- some say June, some say, September. I personally feel it should be around Q1 or Q2. But as soon as the rate cut happens, I'm talking of domestically, the impact on our EBLR rate-linked loans will be immediate. We have 46% of our portfolio linked with the EBLR. So that will be there. And how much will be impacted in the next financial year? That depends on the timing of the rate cut. But because that has to be transmitted on a T+1 basis. So immediately, we transmit that. So that will be an impact on that. But overall, the futuristic things will also play its role with a positive yield movement. It will balance out in some way and we will be able to maybe book more income on the interest side also, if we play our cards well. If you see our yield on investments at this point of time is at 6.84%, which is pretty good compared to the market -- other banks, particularly the public sector banks. So we hope that this is going to play out positively for us.

Our next question is from Mr. [ Marshall ].

Yes. So my first question is regarding this provision. In provision, if you see the numbers, it is saying 96 million -- INR 96 crores, like, yes, provision. This is in spite of NPA reversal, 320 million -- INR 320 crores. It means in actual like [indiscernible] we have provided for INR 416 crores. So can you please define that what are those like, particular items wherein...

Yes, it is primarily the SREI resolution that has happened, the conversion of the debt to equity. We are holding the 100% provision what we are holding in SREI. So that has moved from NPA to NPI.

No, no, like that is okay. Like that is INR 320 crores. But what I'm asking...

That is the return -- that is provision on write-back on the NPA that got reduced. And so the NPA got reduced by conversion of that one term to certain equity instruments and SRs. So that provision that was 100% provided for. So the 100% provision continues to be remained in our books in the treasury note. That is the difference.

No, my question is different. My question is that means in our actual terms, our provision was INR 416 crores. INR 416 crores minus INR 320 crores, net is INR 96 crores. So I'm asking what is the breakup of INR 416 crores, which is too high?

[Foreign Language] The same thing we'll tell you -- she will tell you.

Actually, your question is NPA, we got reversal, that is okay, INR 314 crores. But in the treasury we have to make provisions, sir. So it is a treasury provision which is hitting, sir. Because investment, if it is NPA and we have to make 100% provision in that. So it is a provision investment that is INR 416 crores. And NPI, you are right, it is reversal.

Okay. So you are saying like it's almost nullifying?

Yes.

Yes. The bottom line has not been impacted by that.

So means, what has been the story of SREI, finally? Actually -- yes, the story we haven't followed it. So it has been resolved now? Or what is it the case now?

It has been resolved now. It has been resolved.

So like now who has purchased? And like did we get shares or what now, like what happened to that one?

NARCL has purchased it.

Okay, okay, okay. So maybe you've got some shares?

Yes, we got some shares -- no, no, yes. Not shares, per se. We got the upfront some cash, we got some SRs, we got some OCDs, we've got some NCDs.

Okay, okay, okay. Fine, fine, fine. So like this INR 96 crores has come because of the SREI, right? So this will not be repeated in the next quarter?

[Foreign Language]. It's gone. Yes.

Because like you mentioned that -- like, okay, so like because in the previous quarter, we had about 35 million minus -- INR 35 crores, sorry, like I'm confusing it with millions. So previous quarter, we have INR 35 crores minus. This quarter, we have INR 96 crore plus in provision. So you are saying that in March quarter, it will not be that high amount or it will be minus only, right?

Yes, yes. This was a big resolution. So the impact was like that. So -- but in the next quarter, this will -- this particular exception will not be there.

Okay, okay, okay. My second question is the regarding treasury income. Treasury income has almost halved by 50%, like INR 65 crores down. So what's the reason? And what is it you are taking to like -- to fix it so that like this kind of surprise doesn't occur in the subsequent quarters?

It was not a surprise, per se, because we had some redemption of securities in this quarter. So that had an impact. But overall, now the things will pan out with the movement of the yields. We are -- treasury, in fact, if you see our books, 1 year ahead, treasury has contributed very handsomely. Being a small book that we have, we are hit by the dynamics of the market, of course. But now that the -- everything is moving towards a positive environment for treasury business, we think that treasury will now come back how -- the way it had contributed in '21-'22 also and '22-'23 also. So those -- that treasury moves in a cyclical order. So therefore, it has its own dynamics. So now we are in a positive environment. And from Q4 onwards, you will find that change happening.

One thing also I want to add here. Some accounts have been updated in the form of investment so we have to provide in that MTM also. So now a standard has to -- we have to provide MTM, that is also the main reason for this...

Yes. Sorry. I forgot that to tell you that. If you see, per se, the stand-alone basis on treasury functioning, it doesn't reflect in the overall performance and that is depicted in the presentation. The amount -- one of the major component of the negativity is due to the upgradation of NPA account to standard account, which had an equity component. So the equity component now, the provision has moved from the -- below the line to above the line. So that it impacts our operating profits to that level.

Our last question is from Mr. Choksey from Indus Equity.

Sir, you highlighted you implemented Finacle. Technology will work. What are we doing about human resource, which is the bigger enabler to operate technology and operate -- connect to the customer?

Yes. Yes, a very important point. Today, if any organization has 2 important things to address, 2 axis of development in terms of today's environment is, of course, one is technology and the second is HR. So one component at least -- we are taking step-by-step. One component is, of course, the technology side. Now of course, I forgot to mention in my submission so far is that we have also upgraded the treasury solution recently, okay? So again, one, the core banking to ask the -- to answer to the question of the previous person who just talked on treasury, I think Mr. [ Saket ] was talking on that. The -- we have also upgraded our treasury solution to the latest version. So that will also give a fillip to my overall treasury functioning. But coming back to Mr. Choksey's question regarding on the HR side. So the last year, we were concentrating on the technology side. Now we will be taking on our internal processes for HR transformation, where the in-built capacity will be determined. We have already started through a very reputed institution the process of succession planning and competency mapping. So that process has started in January. So we will be able to get some insight on future plan. We are taking a lot of pain in terms of training our people, particularly on project finances, infrastructure finances. So we are tied up with various reputed institutes, training institutes, which are giving trainings to our people on specialized advanced level of credit. And in general, in terms of overall managing the -- optimally the productivity of our people, employees, we will be taking -- bringing out the HR transformation exercise, which will have the performance management tools, the training requirements, the transfers, postings, everything will be taken on the latest version of what is happening in the industry. In fact, we are also sending people, our top executives to the FSIB training curriculum that we have for -- FSIB has for all the banks. Last year, we had 6 people, 6 of our top executives who will be -- who have joined the FSIB training. This year, again, we will be having at least 4 of our top executives who will be attending this training, what will be the best-in-class in training across -- and they will also understand the dynamics of where they stand compared to the other peer people. So we are giving a lot of focus on this. And this year, particularly -- not this year, this Q4 and the next year, FY '24-'25 our main area would be as we do our -- as we leverage our technology that we have upgraded for our business purpose, we'll be now going on a transformation exercise on the HR side. So that will play its role in the coming period of time.

So what is the CapEx on technology, including the Finacle upgrade?

The CapEx of -- do you want to answer that? Yes.

The total cost of Finacle 10 was around INR 120 crores, out of this -- INR 190 crores -- so out of that, INR 120 crores was the capital and rest was the revenue. So almost we have also capitalized in this quarter also, around INR 90 crores we have capitalized.

Sir, I have a question, what is your undisbursed loans which you have sanctioned in the last 30 days, 45 days or whatever...

Rajesh, you want to answer? Yes, my GM Corporate, Mr. Rajesh is there.

Sir, it's around INR 500 crores, sir, yet to be disbursed.

Undisbursed is only INR 500 crores?

Yes, sir.

Your all loans are availed 100%, you mean?

Sir, all the loans are disbursed, sir, except infrastructure loans, sir. Part disbursement is pending, sir.

And unutilized working capital?

That I think we have to find out. That data we have to -- we'll provide you separately that data.

No problem, sir. Second thing, sir, you highlighted that you have taken a lot of ambitious programs since you Dr. Saheb and now Ravi Mehra are part of the team, you might have done the technology, now you are enabling the HR process. Do you think in 2024, your new recruitment for various programs in retail or wholesale banking or treasury new software, all this transformation will be achieved in 2024 December or it will spill over to next year?

See, there are many aspects to this. So nothing can be -- it is all segregated. The milestones are all segregated. If you see -- if in terms of products, products and giving value-added services, leveraging technology, that we foresee by September; yes, by September, we will be able to be on the ground with those value-added products. In terms of the HR, we will be not only, as I said, training and doing training programs for the top leadership, we'll also be now focused on some lateral movement of the key positions. In fact, we are taking laterally the CXO position. We have already completed the process of CCO, the CFO, the CTO. So we are having 4 CXO positions on a different -- on a outside contract basis. So once these -- and they are going to come in -- the CRO is already there. The other 3 CXO positions will be occupied maybe by April because they all have to come from various organizations and they have given their resignations to that. It takes 2, 3 months' time for them to come onboard. So once we have the CXO positions with us, we'll also do wherever we find there are gaps in the competency where -- in the specialized verticals, we'll not only promote our internal staff members and have trainings to occupy those positions based on the succession plan exercise being done by a reputed institute, we'll also like to have lateral movement of people within the bank, which will also give a good balance of experience and efficiency. So these things will translate in the entire next year, '24-'25. It may -- this entire period will be utilized for HR issues only primarily.

Sir, my next question is based on today's interim budget, I don't know whether you had a chance to view it or not, or hear the pointers. But the bond market would have given you a clear indicator where we are headed. Based on yesterday's FOMC statement and today's budget, the yield is definitely showing that public sector banks are here to enjoy some benefit in the current quarter and maybe in '24. How are you positioned to reap that harvest because our CD ratio or NIMs are concerned, our CASA needs a lot of improvement. So maybe today, you have surplus treasury, which may have a big benefit if your credit growth is likely to happen.

Yes. These are -- I answered this in some way in a previous question. Yes, we are looking forward to that period where we will be able to leverage on this movement of the yields. And it will -- the overall will be a positive -- a much positive impact on our profitability. And depending on the -- how it moves, means, some will be booked in Q4 maybe, some will be done next year. In fact, there is another important RBI circular in between which has revised the valuations and the operations of treasury department from the effect from 1st April. So those things will also be kept in line when we do our treasury functioning from the next quarter onwards. So all in all, on a macro level, yes, the bank should be able to leverage on this...

If I intervene and ask you a question. In -- with your experience in treasury, which I'm aware of from previous banks, do you see in the current quarter, the bond market will pierce 7 or range between 7 and 7.10?

And I'm not -- I'm only a treasury man, I'm not a fortuneteller. But I'll try to answer your...

I'm asking from your experience, sir. I'm not telling you're a fortuneteller. You can be wrong, you can be right, both will...

Yes, yes. Yes, you have to give me that benefit. Yes. But overall, I feel that the -- as the environment is moving towards a positive -- with the Fed also that yesterday or day before yesterday indicating certain good indicators on their fiscal positions, et cetera. And today, also the government announced the interim budget with talks of fiscal consolidation, I think the overall environment is taking it by -- at least to the 7 level if not below 7, that I can positively say. But only one factor that will come in between is our next MPC that is going to happen next month. If the RBI plays its cards in a very -- in a cautionary manner to have more data, maybe the rate cuts will happen somewhere in Q1 or Q2 next year. But in the current context of where we are in -- to answer your question specifically as far as Q4 is concerned, I think we are at around 7.04 to 7.05, as I saw the last movement. It should be -- it shall cut at 7 or it may fractionally go below 7 also, if everything goes okay.

Sir, my next question is, as your technology and human resources are coming in a positive way. Means, technology is already an enabler; human resource, you've spend money, it's a matter of time between new recruitment and the current resources what you have. Every banker in town, whether it be public sector or private sector, is talking about co-lending businesses, co-branded businesses DA -- not DA, but mainly co-lending. Specifically looking at your area of business and where connectivity is in Northern India, how are we capitalizing on those initiatives because you are ready for a lot of things. Is that part also being worked on or that is...

Yes, yes, yes. We are very upbeat on co-lending, let me very, very candid on this, okay? And our portfolio is around INR 1,800 crores. We have already increased our book to INR 1,800 crores in co-lending only, okay? And we have multiple partners. We have more than 10 partners today in terms of co-lending and we continue to explore that opportunity in -- both on the priority side and on the non-priority side. We had the earlier year, last year, on priority co-lending. This year, we have taken all the approvals, required approvals of the Board, et cetera, to do non-priority co-lending. So now that will get a fillip in terms of our co-lending business. So that's very much in the agenda, and we are aggressively pursuing that. The direct assignment route, we are exploring because our technological preparedness has to go a bit further ahead. We are already prepared, but a bit more further ahead. So we'll take some cautionary view before we actually go full hog on taking the assignment route also. But co-lending, yes, very much we're on the cards.

Thank you, sir. As there are no further questions from the participants, we now conclude this conference. Should you have any further queries, please reach out to Ms. [ Mamta Samat ] at 9930-625-104 or [ [email protected] ]. Details are mentioned in Webex's chat and the analyst invitations sent to you earlier. On behalf of Punjab & Sind Bank, I thank each one of you for joining the conference call today. You now disconnect your lines. Thank you.

Thank you very much. Thank you, Shilpa, and thank you all for joining this conference.

Thank you, sir.