The Karnataka Bank Limited (KTKBANK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Karnataka Bank Limited Q1 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to the Managing Director and CEO, Mr. Raghavendra S. Bhat from Karnataka Bank, who is on the line along with his top management team. Thank you, and over to you, sir.

Good morning to all, and a very warm welcome to our Earnings Call for Q1 of FY '26. Based on the feedback from last quarter's earnings call, we have decided to shift the timings of our earnings calls. This was done in a bit to provide sufficient time for our investors to go through our financial results and investor presentation, both of which have been uploaded post the conclusion of our Board meeting yesterday. On a more personal note, after having spent more than 38 years across multiple divisions at Karnataka Bank, I have been given the opportunity of a second innings to lead the bank and unlock the potential that this organization has. Hence, it gives me great pleasure to participate in this earnings call to convey our vision for the future of the bank and interacting with you all who are one of the most important stakeholders in the growth of this organization. As many of you would be aware, the first quarter of FY '26 has been a period of significant transitions for the bank. We have tackled multiple challenges during the quarter, the learnings from which will serve as a foundation to enable the long-term sustainable growth journey for the bank. Our mission and vision remain clear and unchanged as we continue to pursue with renewed vigor, our commitment to disciplined growth, operational excellence and strategic execution in line with our long-term objectives. Let me present the business highlights. Aggregate business of the bank stood at INR 177,509 crores, marginally up by 1.1% on a year-on-year basis as against INR 175,335 crores in June 2024. Profit after tax. Q1 FY '26 PAT of INR 292.40 crore as against INR 252.37 crores in Q4 of FY '25, quarter-on-quarter increase of 15.8%. Y-o-Y, there is a decreased impact from that of INR 400.33 crore in Q1 FY '25. However, it should be noted that in Q1 FY '25 last year, the bank had received an interest income of INR 81.32 crores on tax refund and because of which it is not directly comparable. Further, in line with the bank's commitment to increase PCR, the bank has continued making accelerated provisioning. Gross advances stood at INR 74,267.02 crore as on 30th June 2025, reflecting a Y-o-Y de-growth of 1.6% from INR 75,455 crore as on 30th June 2024. Our overall strategy is to continue to focus on growing retail, agri and MSME, where the growth was led by retail. Housing and gold loan portfolio with a net book accretion of INR 2,327 crores Y-o-Y in the ramp segment. The bank has been committed to reduce its exposure to low yielding large bar, mid-corporates that were opportunistically deployed for better yields than treasury. As conveyed, during previous calls, we have started replacing IBPC book with higher-yielding loans. Around INR 500 crores of IBPC advances have been replaced in Q1 in addition to the reduction in NBFC portfolio already initiated during the previous quarters. On a Q-o-Q business retail advances in Q1 FY '26 have grown marginally while mid-corporate and large corporate advances have degrown by 3% and 15%, respectively. As we move forward, the strategy would be to accelerate retail growth while also stabilizing our mid-corporate and large corporate portfolio with good quality and better yielding loans. Aggregate deposits, INR 103,242.17 crores as on June 2025, reflecting a Y-o-Y growth of 3.16% over June 2024 from INR 100,079.88 crores. CASA deposits stand at 30.84% of aggregate deposits as against 30.51% in June 2024. It is to be noted that in absolute terms, our CASA deposits have grown 4.28% Y-o-Y over June 2024. CASA accretion remains a focal point for us, and the bank has come up with a focused strategy to further improve CASA buildup during the year. The bank has continued to focus on shifting high-cost bulk deposits to granular and retail deposits of less than INR 3 crores. Bulk deposits as percentage of total deposits have come down from 6.6% as on 31st March 2025, to 5.4% as on 30th June 2025. Similarly, bulk deposits as a percentage of term deposits have come down from 9.7% as on 31st March 2025 to 7.9% as on 30th June 2025. As the bank has excess liquidity and with the CRR cut in Q2, the bank by strategy is retaining from accepting costly bulk deposits, majority are renewed at ALCO card rates to rein in cost of deposits. To summarize, while overall aggregate deposit growth has been muted, we have seen significant movement from bulk deposits to granular deposits, retail term deposits, that is less than INR 3 crores have seen a significant jump from INR 60,134 crores as on June 2025 to INR 65,786 crores as at the end of previous quarter. Net year-on-year accretion is INR 5,652 crores. Our focused new product development and launches continue to be on track to fill in some remaining gaps in our product offerings, launches planned in the coming quarters. EMI-based loan offering for gold loans, pre-approved personal loans for salaried and self-employed, surrogate-based lending for retail and MSME, supply chain finance, merchant payment app. Net interest income. NII at INR 755.60 crores in Q1 of FY '26 as against INR 903.36 crore in Q1 FY '25. There is a degrowth of 16.36% and INR 780.68 crores in Q4 of FY '25. Q-on-Q de-growth of 3.21%. While gross interest income has remained flat during this period, owing to a reduction in overall yields, the increased cost of funds and cost of deposits has put pressure on overall NII on a Y-o-Y basis. However, both cost of funds and cost of deposits have started showing a Q-o-Q improvement on the back of reduction in CASA which we believe will improve even further in the coming quarters and help keep interest expenses in check. In conjunction with the added focus on improving the loan book, we should see an improvement in NII during the second half of the year. Net interest margin. Stood at 2.82% for Q1 FY '26 versus 3.54% in Q1 of FY '25 and 2.98% in Q4 of FY '25. The fall in NIM is mainly on account of reduction of external loan benchmark rates, driven by a repo rate cut to 5.5% from 6.5% a year ago. 70% of our book is EBLR based, thus having an immediate impact on NIM levels. We are expecting a bounce back of advances supported through our focus on co-lending and direct assignment, which should see us going back to the previous levels of around 3%. With the improved focus on higher-yielding retail and direct to corporate advances, combined with expected easing in cost of funds, we expect NIM to further improve by 10 basis points by the end of the year. Loan to yields. As a result of recent cuts in repo rates owing to reduction in external benchmark rates, partially offset by our changes in product mix, yield on advance for Q1 FY '26 stood at 9.28% as compared to 9.52% in Q1 of FY '25 and 9.43% in Q4 of FY '25. As mentioned during the previous quarters, the bank remains committed to its strategy of replacing the bulky opportunistic advances such as IBPC and some NBFC advances with the direct to corporate and retail advances. Considering the potential churn to higher-yielding segments, we expect to see an improvement of 20 to 30 basis points in the overall portfolio during the second half of the year. CD ratio, for the quarter stood at 71.93% as compared to 74.38% in March 2025 and 75.39% in June 2024. Stress assets, gross NPA percentage as on 30th June 2025, stood at 3.46% as against 3.54% in June 2024 and 3.08% in March 2025. Net NPA percentage as on 30th June 2025 stood at 1.44% as against 1.66% in June 2024 and 1.31% in March 2025. While we acknowledge there has been a slight hit to the asset quality on a Q-on-Q basis, we want to assure you that this is a temporary aberration and that the bank has already initiated measures to control slippages and improve monitoring efficiency by intensifying regional collection centers while the gross NPA increased by INR 169.01 crores during the quarter, the bank's intensified focus on collections, especially on the retail front, has resulted in a post-quarter end recovery of approximately INR 90 crores from accounts that have slipped into NPA during the quarter. These recoveries will be reflected in the results of the next quarter, and we should see improvement in the asset quality resuming again. Gross slippages at 0.53% in Q1 FY '26 as against 0.59% in Q1 FY '25 and 0.34% in Q4 FY '25. Recoveries for the quarter at INR 109.24 crore in Q1 FY '26 versus INR 133.12 crore in Q1 FY '25 and INR 173.91 crores in Q4 FY '25, Standard restructured advances. Including related accounts, standard restructured advance stood at INR 888.23 crores as on 30 June 2025 as compared to INR 994.77 crore as on 31st March 2025 and INR 1,395.25 crores as on 30th June 2024. This reflects a Q-on-Q improvement of 10.7% and Y-o-Y improvement of 36.3%, in line with the bank's commitment to reducing restructured advances. Provision coverage ratio, including technical write-offs at 81.11% in June 2025 compared to 81.42% in March 2025 and 77.97% in June 2024. Excluding technical write-off, PCR improved to 59.18% as compared to 58.18% in March 2025, in line with the bank's commitment to improving PCR. Liquidity coverage ratio. As on 30th June 2025, at 200.7% significantly improved from 162.5% as on 31st March 2025 and as against the statutory target of 100%. Cost of funds stood at 5.77% in Q1 FY '26 compared to 5.83% in Q4 FY '25 and 5.57% in Q1 FY '25. The sequential Q-on-Q improvement in cost of funds is expected to continue in the coming quarters as the benefit of the cut in report rate materializes. This would be further supported by our continued endeavors to reduce the dependence on bulk deposits and replacing the same with retail deposits at CRAR rates and focus on CASA buildup. Credit cost at 0.16% for Q1 FY '26 as against 0.05% in Q4 '25 and 0.11% in Q1 FY '25. Cost to income for the quarter ended 30th June 2025 -- cost-to-income ratio stood at 58.05%, showing considerable improvement as compared to Q4 and full year FY '25 numbers of 68.98% and 60.11%, respectively. While operating expenses have remained stable Y-o-Y, we have seen a significant improvement on a Q-o-Q basis INR 646.67 crores in Q1 FY '26 as compared to INR 833.89 crores in Q4 FY '25. This comes as a result of multiple cost rationalization and monitoring initiatives undertaken by the bank in a bit to renegotiate rents and vendor commercials and keep operating expenses under check. With a renewed focus on increasing NII and NIM through our advances and deposit strategies, the brand projects cost-to-income ratio to come down to around 55% in the coming quarters. Return on equity. Q1 FY '26, return on equity stood at 9.58% versus 8.56% in Q4 of FY '25. Return on assets. Q1 FY '26 return on assets stood at 0.97% versus 0.81% in Q4 FY '25. We expect to end FY '25 with an ROA between 1.1% to 1.2%. We expect improvement in ROA and ROE in the coming quarters in FY '26 supported by accretion in the higher-yielding RAM segment and movement from bulk to retail deposits leading to improvement in NIA, increase in other income and consequent improvement in profit after tax. CRAR stood at 20.46% as on 30th June 2025 in comparison to 19.85% as on 31st March 2025. Both Tier 1 and Tier 2 put together. This covers most of the key financial metrics of the bank. While this has been a mixed quarter in terms of financial performance, I would like to reiterate that we are well positioned and prepared to bounce back. The bank's fundamentals remain strong, and our commitment to transparency, customer service and ethical governance remains unwavering. This will continue to be the core values and foundation for the future growth of the organization. I would now like to hand over the call to the moderator for any questions and feedback from our callers that we would be glad to take. Thank you.

[Operator Instructions] The first the line of Priyank from Vallum Capital.

A very good performance in such challenging times. So my question first is on, of course, with the human leadership transition that we are witnessing, and I'm glad to see the long-term targets remaining intact. What is the near-term key targets that bank looks to further change or implement for a betterment of good, say there may be some differences in terms of the leader -- earlier leadership versus the current leadership. What is the -- what are the key operating KPIs that Board would be judging going ahead are a targeting in the near term?

No. As far as growth is concerned, no doubt about it. We had some tough time. We have to face the tough time ahead also. But the key focused areas are -- there will not be any much change rather than focusing on the growth. Growth in advances is the prime objective of mine and my team and growth in CASA. These are the main 2 areas, which we are focusing on. And since it is already August, I don't want to change any annual action plans at this juncture. But wherever corrections are required in between, definitely, we will review it and we will come back.

Got it. My second question is on the cost of deposits in the era where the large private banks have increased their minimum balances on the SA, the large private banks, including public sector banks have cut down their deposit rates. What is stopping us to cut down through deposit rates, given that we already have a liquidity surplus. The core P&L that I understand is the issue of the NIMs. Other than that, I think we have performed very well. How do we plan to address this -- the falling NIMs, can be via deposits, can be via yield? What would be the strategy for the bank?

Yes. In the last ALCO meeting, we had deliberated in length how to bring down the cost. We have to increase our ultimately spread and income. Ultimately, that matters a lot. After much deliberations, we have reduced the rate of interest on deposits, and we have planned for growth in CASA. These are the 2 important areas. ALCO, of course, no doubt monthly mandatory meeting we need to have. In addition to that, whenever correction is required, depending upon the market situation, we want to focus that also and cost controlling is one of our important aspects. I assure you that one is cost control. Other one is improvement in the CASA is the only option available to us that we are focusing on. Secondly, to increase the income, the priority, as I already highlighted, there is a degrowth in advances. We have to focus for the growth in RAM, that is retail, agriculture and MSME. That is the focused area. Ultimately, cost control, as you rightly said, definitely, we are -- it is on our target.

Sir, actually, I was alluding for the cost of deposits in the retail term deposits, given that we have such a high granular deposit base and when there is so much of surplus liquidity available in the wholesale market, at the times when large banks have undertaken deposit rate cuts on the fixed deposits, what are the plans for Karnataka Bank on that front? And given whatever the deposit -- given the strategy, how should we look for NIMs quarter-on-quarter going ahead for the rest of the year? Should we end the full year in the guided range of 3%, 3.5%?

Yes, that is what I mentioned earlier. In the last ALCO, we have reduced the rate of interest on term deposits, particularly whatever bucket is required, which is affecting the cost of deposits, number one. Number two, rate of interest on advances during the current year, we have already revised downward and focus is on the CASA base growth. As you rightly mentioned, other banks are focusing on that. Even we are also targeting the same with regard to the cost control method, reduction in rate of interest with regard to savings bank as well as term deposits in 2 areas we have already done. And as I mentioned earlier, we will future, we will discuss in length in the ALCO and take a necessary corrective action wherever required. One more thing I want to add here, your concern is very much right. The cost -- reduction in the rate of interest already started showing in the Q1 of this current year. There is a reduction in the cost of deposits. Definitely, we will move in that direction. Regarding excess liquidity, as you said, definitely, it is available in the system, but focus area is to grow in quality advances that we are focusing. I hope I answered your question.

Very well. Very aptly you have answered. My last question before I come back in the queue is on the asset quality front. There are 2 books which historically, the legacy books that bank is holding up. One is standard restructured portfolio of INR 888 crores and you have mentioned that 54% of the portfolio requires 30% upgrade. So when is that upgrade coming up? How should we look that book panning out for next 9 months of this year-end? That is first part, which is on the standard restructured book. And the second part is on the technically written-off book that we have is close to around INR 3,000 crores. And that book has been written off. So whatever income comes helps banks to reinvest in for the growth engine. So what are the measures that bank is undertaking to recover the accounts where we have technically written off?

Yes. Our efforts are continuously on with regard to the reduction in restructured advances, which you must have seen in the presentation slide given to you, it is at INR 888 crores, continuous reduction for the past several quarters. We are focusing on that. In this quarter, we are further plans to reduce it to INR 700 crores from INR 888 crores.

Sorry, you mentioned INR 700 crores in the coming quarter itself?

No, no. Annual last 6 quarters continuously, I think it was around -- March figure do you have?

Yes. I have that figure in the presentation. It's coming down.

It's coming down. There is an improvement. And by March end, we have a definite target of bringing down to INR 700 crores. In between, some are getting upgraded, some are getting closed also because through whatever mechanism of recovery is there, we are -- INR 700 crores is the target we have kept whatever best is possible to recover further, we are at it.

Perfect. And when it comes to the technical return of book?

Yes, technically return of balance, it was at INR 3,000 crores. And this quarter, bank is passing through various stages, which we are aware, and I have taken over very recently, and our efforts will be on that during the first quarter, if you see, compared to the previous quarter of last year, some figures may not speak well, but we are at it with expected recovery from this technical written-off during the current quarter, that is Q2, we have focused around INR 38 crores to INR 40 crores. That will happen in this quarter only. And ultimately, the efforts will be further on to bring it down, and it will [Technical Difficulty] income.

[Operator Instructions] The next question is from the line of Unmesh Shah from Hanumant Holdings Private Limited.

Am I audible sir?

Yes.

Let me first welcome to your new avatar and I'm sure that now the things will be smoothened out. We have undergone the turbulence for last quarter as all of us we know.

Thank you.

Sir, the first quarter results are out and what I see that profit, no doubt quarter-to-quarter, has 15%, 16% gone up INR 292 crores. But year-on-year, we find a lot of fall from INR 400 crores to INR 290 crores, almost 27% down. That is one of my concern. And second thing, when I see the NPAs, of course, you have a very eminent Board, you have aging people. You are also very comfortable with the bank with so many years of experience. So I have nothing to say about it. But then NPAs are far high, net NPA, gross NPA compared to the peers bank, if you see. That is my one question. And second thing, if you see the advances for this quarter has slightly fallen compared to the earlier one. So what my question is, how does the bank plan to increase the credit uptake? What is the major strategy or driver for the same? Are you raising by Tier 1, Tier 2 or capital raise like UIP or other means? Can you just highlight this? I'd be thankful to you, sir?

Yes. With regard to reduction in net profit, even we also have the same concern that how to address that. But compared to Q1 of last year, one specific item of IT refund around INR 80 crores was there during the Q1 of the last year. And of course, these are all ultimately net profit has gone down. That is a different issue. But there is one such item, it was INR 80 crore refund of IT is there, that is number one. Number two, with regard to the NPA, you have a concern, even we too also have a concern, even my predecessors also and even my priority is also to control the NPA recovery and controlling of trust, if any, that is on the prime objective of the bank. And our team is working on it round the clock to see that wherever possible, recovery is made. And if you see the NPA movement also, recovery is also there, but with regard to the addition and NPAs, whatever we compass, our more efforts are still required, which we will be definitely putting going forward. And after this first Q1, there is a major 1 account, which has -- which was NPA has been upgraded. That is a big account of around INR 90 crores recovery has happened, and efforts are still on to recover. We have the priorities, depending upon the size, securities available, the borrowers, all these plans are there meeting the borrowers by our recovery team. Recovery mechanism is very well in place that we will make all our efforts to recover.

Sir, my...

Sorry, 1 minute, ratio looks bad. This is my personal view also and in my capacity as MD and CEO, I have seen wherever book growth is happening, advances, both deposits and advances growth is coming when cost is controlled, yield is very well planned. All ratios will be good. As you also mentioned, since there is a degrowth in advances, all ratios will rather not comparable, which here also it has happened. GNPA and NNPA, of course, depending upon various other factors of provisioning and all. GNPA is particularly when the advance size is good, there is a negative growth or degrowth compared to the March figure. That is why percentage looks higher. We are at it, sir.

Hello, can you hear me?

Yes. I can hear.

Any plan to credit uplift in the recent time or still you have to strategize it or we will be raising funds like Tier 1 or Tier 2 or something like that to uplift the credit?

We have good capital adequacy ratio. We do not have plans for raising additional capital right now. But as and when the book size increases are going forward, that will be planned properly at the appropriate time. What was your one more question?

This is the question only, the credit uptick and is there any strategies which you already addressed it, I think.

Yes, I have already mentioned. But yes, the focus is on retail growth. Retail, agri and MSME. We want to have -- a definite strategy is there, we are coming out. As I told you, I have taken over charge recently, and I have started initiating action wherever corrective action is required, I'm at it.

And I think you addressed my all questions, and we wish you best of luck. I mean in Mumbai, sometime if you come, we will like to have personal one-to-one meeting also, if possible, in the busy schedule of yours. And I look forward to...

Surely. I will be looking forward for all the cooperation from you people also.

Yes, we look forward to any help, in whatever way we can, we are with you and we look forward to work with you more and best wishes for your new avatar, which you have taken over recently. And best wishes to you and the bank and all stakeholders.

The next question is from the line of Mayank Gupta, an individual investor.

Congratulation on being the Managing Director of the bank. As the new managing director going forward, what will be the key focus areas for the bank?

Thank you. I have already highlighted rather. My main focus is growth, quality growth, particularly growth in liability side CASA, asset side, retail, and MSME. These are the focused area to have -- one is on the liability side, growth is to control costs. Other side is have better yields so that there is improvement in the margin.

The next question is from the line of Yashvanth Thippeswamy, an Individual Investor.

Raghavendra Bhat, welcome back.

Thank you.

I mean I understand that you worked with this bank for quite some time and now you understand the culture. I mean I think it would be nice -- I would not rather question what has happened because you were not directly responsible for the last year -- I mean, sorry, last quarter's performance. Rather from the presentation that has been shared, so I have a couple of questions. So one is with respect to the asset quality. So I see that there is an addition of INR 400 crores. And I just wanted to know which are the sectors or, I mean, how many -- what are the number of accounts that contributed this addition? And also, have we provided for this slippage?

That is, main addition has come in MSME, housing and agriculture. These are the three areas, which our team is already acting on it. Some started upgrading also. Improvement is happening there. And I'm quite confident whatever additions are there, we are at it for the recovery of that. Upgradation and downgradation very strictly happening through the system. When it is slipped deposition for whatever that last moment happens because of the liquidity problem and it is also happening. And all these NPAs have been -- adequately provision has been made that you are aware, which is as we have no choice, we have to do that. It is a regulatory requirement. We are doing that. And no big ticket advances are back. And I'm telling you it is in the pool, it is happening, and we are at it for the recovery.

Regarding the retail advances, which we are going to focus on, I mean, the RAM sector as such like the segment. So I see that there is a run rate of around INR 500 crores. And can we see any improvement in the future? Because based on the calculations that I have done as per the branch per month, we are able to do around INR 1.8 crores with the 950 branches. So do you see that there could be an improvement on this side going forward?

As I mentioned in my presentation, definitely, our focus area is RAM, as I said you. While growing also, a lot of things we need to have take into account the precautions of the quality of the advances with regard to the sanction and follow-up also. This right input have been given. We have got around 950-plus branches. Per branch also if it...

954.

954 branches across India, even if I select around 700, 800 branches, which are very potential for advances, at least per branch, if I take into account INR 2 crores, INR 2.5 crores depending upon the potentiality and the geographical location, we can go on give full support from the head office and controlling offices. Definitely, it is possible to grow. And one thing I have seen after taking charge, some corrective action is required in between. With regard to the processing and sanction also, we are at it. Today, we have got four retail loan processing centers. Immediately, I have given the administrative clearance also. We will be increasing it to 3, within a short span of 1 week or so. And within a month's time, we will extend it to all the regions. Therefore, I'm quite optimistic. Definitely, with the support from the head office and the controlling office at various centers, I'm hopeful and optimistic to take it. As you rightly mentioned, I will be having certain geographical and identified branches. All branches may not be possible to have that kind of growth. But as a whole, definitely, we are at it, Thippeswamy, sir.

That's a great news. And one last question from my side. So with respect to CRAR touching almost like more than 20%, I mean, I understand that we are moving from the large corporate advances to the more liquidity and then a better way of deploying the advances at the RAM side. So are we also concentrating on the large corporate, if there is any opportunity process by?

As you rightly said, see, we have to consider quality growth and mixture of all this, we have to balance. And consciously taking into -- on the one side, we consciously want to bring it down. On the other side, whenever the opportunity comes, taking into account the yield or the pricing-wise, we have to be selective, taking into account overall benefit to the bank. Concentration for the retail is the first priority. This balancing -- you said the capital adequacy ratio or all those things are there, that definitely, it will help us to balance this growth unless the growth happens. Today, that CRAR has improved compared to March also. Why? Because there is a reduction in advances, INR 4,500 crores to INR 5,000 crores reduction is there. Mainly it has improved because of that. Otherwise, it is the only profit available that will accrue in the CRAR. So the question here is, one is that we have to balance every segment without compromising on the pricing, quality, everything. But focus is that definitely, we have to balance and grow. This is the main objective.

All the best Mr. Raghavendra Bhat. Hope to see nice, good results going forward. All the best.

Thank you very much.

The next question is from the line of Chirag Singhal from Fos Waterford.

In your earlier remarks, you mentioned about the quality growth and focus on RAM. When I look at the numbers, the RAM segment has grown at 5% and the non-RAM segment, whether it is corporate or NBC and all, that has the degrown, which has resulted into minus 1.6% degrowth for the quarter on a year-on-year basis. So I just want to understand that incrementally, let's say now we have this segment as the primary focus or a growth driver, for this year, like what is your guidance? How much this RAM segment will grow to? And accounting for the degrowth in other segments, what will be the overall advances growth?

Retail, gross advances, as you know, it is furnished there. INR 75,000 crores is there, out of that INR 41,376 crore figure is there. We want to take it at least to INR 51,000 crores by the end of '26 from INR 41,000 crores. It is no doubt, it is a very ambitious target. We have to do that. To stabilize the growth in advances, we need to have that. RAM, as I mentioned earlier, it is a combination of agri, MSME and other retail. We have plans to take it from INR 41,000 crores to INR 51,000 crores. Around INR 10,000 crores has to happen in retail. And one more area -- no doubt, it is coming under that. Last year, we had grown particularly under the gold loan segment. Around INR 4,000 crores we have added in the gold loan portfolio only. Because of certain, whatever, constraints, which we could not move on that, and now because RBI circular also has come, you also must be aware, we have plans to grow, and gold loan growth has already started, which is more secured advance, and we want to grow there also. These are the main plans. When I said the growth in retail means, these main areas, housing, MSME and some other areas. Wherever potential is there, we will be definitely planning to grow.

So when I look at the gross advances breakup, the retail, MSME, agri totals to INR 47,000-odd crores. So did you mean this number will increase by INR 10,000 crores during the current fiscal.

We have internally plans. And one is making good the figure, which has already gone down. Added to that, the recovery during the year, that will be additional required. Third one is our growth strategy, which we need to increase the size of our book. Taking into account, we have AOP up INR 89,000 crores in the books accrued plan. Whether it is INR 89,000 crores? Maybe looks a little bit aggressive. But at least adding INR 7,000 crores to INR 8,000 crores of advances will definitely take us to a newer height. This much I can definitely say. I have no plans to revise it down while making full efforts to achieve the target. This is definitely possible to do. If we strengthen our all the regions with growth in our retail, it is possible. That is my feeling.

Yes, sorry.

Yes, yes. Tell me.

Yes. So INR 7,000 crore to INR 8,000 crores incremental growth in the advances in the RAM segment for the rest of the year? Did I get that correct?

Yes, yes.

Okay. And what about the balance book, which is INR 26,700 crores, what would this book look like by the end of the year? So broadly, what I'm trying to understand is the overall advance growth.

No, overall advance only I told you, right now, as of June, it is INR 75,000 crores. And our target to grow is at INr 89,000 crores. And INR 89,000 crores, as I mentioned earlier, there is no plan to revise it. And we have to make an attempt to achieve that. But INR 85,000 crores to INR 86,000 crores gross of advances by the end of the year, definitely, it will give a big boost to us while making our full efforts to the achieve the INR 89,000 crores.

Understood. So that is roughly 10% odd growth rate if I take INR 86,000 crores this March closing number, that Is roughly 10% growth rate.

Yes.

Okay. And how much is outstanding in IBPC and NBFC book at the end of June '25? And what is your target by the year-end?

IBPC as at...

INR 3,315 crores.

As of June, it is INR 3,315 crores, and it was at INR 3,997 crores as of June last year. Right now, there is a reduction of around INR 550 crores, INR 600 crores. We have plans to reduce it further. And as I mentioned earlier, we have to strike a balance in the books to grow and taking into account so many aspects. We have to balance. One is whether to take it or not, other one is where we can grow, third one is yield. All these things, we will take a conscious decision and move forward.

So what are you guiding for this IBPC by the end of current year?

We want to bring it down to INR 1,000 crores by the end of this March.

Okay. If you could give me the same number for NBFC book?

Pardon?

NBFC outstanding?

Sorry. Mr. Chirag, may we request you return to the question queue for a follow-up.

Sure.