The South Indian Bank Limited (SOUTHBANK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to The South Indian Bank's Q2 FY '21 Earning Conference Call, hosted by Equirus Securities. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Rohan Mandora from Equirus Securities. Thank you, and over to you, sir.

Thank you, Janice. Good morning, everyone. On behalf of Equirus Securities, I welcome you to the 2Q FY '21 earnings call of South Indian Bank. We have with us today the management team of South Indian Bank represented by Mr. Murali Ramakrishnan, MD and CEO; Mr. Thomas Joseph K., EVP Operations; Mr. G. Sivakumar, EVP, Credit; Mr. K. N. Reghunathan, EVP Treasury; Mrs. Chithra H., CFO. I now request MD sir, to take us through the highlights of the quarter gone by, after which, we can open the floor for Q&A. Over it to you, sir.

Thank you. A very good morning to all of you, and thank you for joining us for the South Indian Bank Q2 FY '21 Earnings Conference Call. I'm joined by my colleagues, Mr. Thomas Joseph, EVP Operations; Mr. G. Sivakumar, EVP Credit; Mr. K. N. Reghunathan, EVP Treasury; as well CFO, Mrs. Chithra. We hope that you and your family are safe and healthy. Before we get into financial performance or strategy, let me start with a personal note. This is my first interaction with all of you as the MD and CEO of South Indian Bank. Just to brief you on my background and experience. My career as a banker spans 32 years with significant experience in retail and SME credit, risk and business analytics. It's an incredible honor and privilege for me to lead SIB, a bank that has built an enviable franchise with more than 91 years of faith. For building this great institution, I would like to thank all my predecessors. The bank has witnessed various economic developments and cycles, including many epidemics as well as globalization of our economy over the past few decades. The strength of the bank lies in its legacy customer base, which has been growing year after year. Bank has been at the forefront of adopting latest technology, be it first Kerala bank to implement core banking and rolling out cutting-edge SIB Mirror+ mobile application banking. Further, the customer base of over 6.6 million provides huge opportunity to upsell and cross-sell businesses. I understand that the bank has undertaken digitization of various processes, including onboarding of new clients, credit underwriting, et cetera. These and several new business initiatives and process changes are being implemented to support the growth, improve credit delivery and bring quality in underwriting standards. It's my endeavor that all these initiatives are taken forward with the new appropriate strategies guided by the eminent work, deliveries and opportunities and leverage the human resources so as to bring value to all stakeholders. I wish to share that the strategic initiatives underlined with the stated strategy of the bank will be shared with you at the appropriate time. Now let me take you through the detailed financial performance of the bank during the second quarter of FY '21. We continue to appreciate the efforts of our employees who have shown strong resilience and ability to adapt to changing circumstances. Amid the continuing lockdowns, with the help up our in-house BCP team, we are able to keep 98% of our branches and our ATMs operational across the country, following all precautionary measures as per the guidelines. At August 31, 2020, loans under moratorium stands at about 26.1% of the total loans compared to 36.3% at June 30, 2020. Collection efficiency of the bank for the month of September was 80%. As stated in our previous Q4 FY '20 results conference call that we will be targeting to reach PCR of 60% in the next 6 months, following the outlook given in Q4 in FY '19. We have reached a PCR of 65.2% as on September '20. Now let me take you through the key highlights of the operational and financial performance for this quarter. I'm delighted to state that the bank's operating performance continued to improve in Q2 FY '21. We have achieved strong successes across our stated strategy of strengthening margins, moving towards a favorable asset mix, building CASA book and containing future slippages. The company reported profit after tax of INR 65 crores for Q2 FY '21. We continue to expand our noncorporate portfolio, particularly in the segments of gold, personal segment, business segment and agri loans, which now form 75% of the overall advances book. As on September 30, 2020, the total business for the bank stands at INR 147,970 crores. Advances grew by 2% year-on-year to INR 65,349 crores, driven by continued robust growth in agri loans, which has grown 18%, business loan, which has grown by 12%, and personal segment which has grown by 4% despite degrowth in corporate loan book, in tune with our strategy. The share of corporate loans declined from 31% as on September 2019 to 25% as on September '20. Core deposits rose by 9% to INR 74,976 crores. CASA deposits increased by 11.5% to INR 22,978. CASA ratio improved to 27.8% of the total deposits. Bulk and certificate of deposits declined by 45.6%, in line with our strategy. Our investment was INR 22,015 crores, of which HCM category contributed to INR 17,483 crores while AFS contributed to INR 4,464 crores. Gross NPA ratio improved to 4.87% as of September 2020, net NPA ratio improved by 50 basis points to 2.59% as of September 2020. Net interest income for the quarter stood at INR 663 crores, registering a growth of 13%. Net interest margin was 2.94% for the quarter ended September 2020 as against 2.69% in September 2019. Cumulative NIM for half year ended was 2.78% as against 2.61% in the first half of 2019. Other income for the quarter was INR 240 crores. Our other core fee income increased by 24% to INR 194 crores, while treasury income decreased by 51% to INR 46 crores. Operating profit for the quarter was INR 414 crores as against INR 411 crores in Q2 FY '20. In Q2 FY '21, the cost income ratio was 53.9%. Accounts not classified as NPA due to the order of Supreme Court is INR 136 crores. However, the bank has provided INR 21 crores during the quarter. The bank continue to hold COVID-19-related provisioning aggregating to INR 100.5 crores against standard assets. The above provision of INR 100.5 crore towards standard assets is not considered PCR calculation. Overall provisions increased by 7% to INR 326 crores in Q2 FY '21. These provisions include loan loss provision of INR 286 crores, including write-off of the provision coverage ratio, continued to improve and stood at 65.2% as of September 2020 as against 58.8% as of June 2020. Considering the impact of COVID, we'll endeavor to keep PCR around 60%. In Q2 FY '21, fresh slippages amounted to INR 49 crores, which are primarily contributed by business segment vertical. There was no slippages from corporate segment during the quarter. Our overall capital adequacy stands at 13.9%, while the core CRAR is at 11.2%. The bank has a wide geographical presence with 875 branches, 51 extension counters and over 1,438 ATMs. To summarize, the bank will continue the strategy of building low-cost CASA book, improve asset quality by focusing on building granular advances book through personal, agri and business segments. With this, we open the floor for questions. Thank you.

[Operator Instructions] The first question is from the line of Renish Bhuva from ICICI Securities.

Yes. Congrats for cool set of numbers. Sir, a couple of questions. One is on the collection efficiency, which you highlighted is around 80% in September. So this is including moratorium piece or this is ex moratorium book?

This is -- I'll just give you some more details on this. Basically, the overall collection efficiency for the month of September was 80%, to be precise 79.92%. In which, if you look at the breakup of this, retail loans, which are basically housing loans, vehicle loans and mortgage loans and other personal loans, there, we have a much better collection efficiency of 87%, 92%, 90% levels, whereas other business loan is about 76% and corporate is at about 71%; and the term loan is at about 70%, overall, it's about 79.92%. So this is basically on whatever has fallen due in the month of September 2020. This is for the total demand as against that collection for that month, which has fallen due for September 2020 is about 80% cumulatively.

Right. So basically, since moratorium gets ended in August, so basically, September demand will include overall total portfolio, right?

Yes, yes, correct.

Okay. Right. And sir, secondly, in a press meet, you highlighted some stress book analysis on your moratorium book. So can you please throw some light from which segment you are expecting more stress coming out? What would be segment where you see is better placed in current scenario?

Yes. Good question. The -- when we -- if you just -- I'd just like to rewind, if you recall our -- when the moratorium got started, we offered this facility to all our customers and about 56% of the customers -- 56% in terms of value of the customers opted for moratorium, this figure came down to 36% as of June end, and through collection efforts by August end, it was at about 26% of the portfolio. So this 26% of our total advances book is amounting to INR 17,065 crores, which is about 26.1% of our total portfolio. What I indicated was out of the INR 17,065 crores, we believe that over the next few quarters, spanning into even next year, et cetera, we expect 10% of the book -- and this is basically an estimate because nobody knows when COVID will get lifted, when things will become normal. But we are making an intelligent estimate, and we are saying that it will be about 10% of this book is likely to become NPA over a period of time. But -- and also we believe that out of this portfolio, about INR 1,200 crores worth of book is likely to be restructured. These numbers of INR 1,700 crores and INR 1,200 crores to some extent, we have looked at by going through the book, which we have in corporate, business and retail. And we have estimated based on the industry to which they belong to. And if it's a retail or a personal segment loan, whether they have been in any of the over dues in the past. Based on those past whichever of those accounts, we estimate that about 1,000 -- about 10% of that will become -- it's likely to become NPA over next few quarters and INR 1,200 crores will get restructured. Of course, the performance of restructured account will be, again, dependent on how things pan out over a period of time. If you had to look at this INR 1,700 crores, we have also further estimated that INR 1,400 crores out of those INR 1,700 crores, they are likely to slip into NPA in the next 2 quarters, that is Q3 and Q4. And if you were to look at what is the composition of that INR 1,400 crores, which is likely to become NPA in the next 2 quarters. We believe that in the area of corporate, it's likely take about INR 600 crores; in the area of personal segment it's about INR 350 crores; and in the area of business it's about INR 450 crores. So we expect that cumulatively INR 1,400 crores are likely to slip in the next 2 quarters. And if you look at the composition of the restructured, whatever we are estimating that we'll have to restructure to take in the INR 1,200 crores, we will have to look at the breakup, it's about INR 275 crores in corporate and it's about INR 300 crores in personal segment and about INR 625 crores in business segment. Here, I would like to mention that our categorization of corporate and business loan that has undergone a change a little bit based on the revised guideline of SME. So now we are categorizing anything which is below INR 25 crores in the business segment and anything which is above INR 25 crores, we are classifying it as corporate. Therefore, even if you were to look at the advances growth, the corporate would have shown a huge decline. This is because of reclassification of some of the corporates into the business loan as per the new definition of RBI.

Okay. Got it. Got it. So sir, just if I may allow just the last question on this part. So maybe what we are essentially highlighting is the business banking is sort of appears to be more vulnerable. So geographically, this is primarily in the -- from the Kerala book or this is spread across pan-India? Or maybe concentrated in a couple of geographies, let's say, Maharashtra or Tamil Nadu, where this lockdown or the COVID cases are sort of higher than the other part of the India?

Yes. Got it. No, if you were to really look at the -- if you're actually looking at geography, I think it's a good idea to look at -- let me just take out whether I have a detail on geography itself. But just to give you some sense on business loan, see, due to COVID situation, you know that many of the businesses got impacted both on the supply side as well as on the demand side. So if you have to really look at the break of our business segment, the top 3 sectors where we have faced some kind of stress in the past is in the area of textile, food processing and trade, these are the subsegments where we have had delinquencies in the past, particularly in the business segment. So COVID situation frankly has put the entire thing off-control. So we are closely monitoring them. And we believe that if things become better, these segments, which are traditionally vulnerable, they probably will be showing some signs of coming back on track. So -- but then obviously, it's anybody's guess as to when things will become better. But if you had to really look at geography-wise, let me just see if I have the data. Maybe I can share it with you once I calculate that and send it across to you.

The next question is from the line of Amit Dalal from Tata Investment.

So I have 2 questions. When you say that you expect out of that your moratorium, only about INR 1,400 crores to going into GNPA in the second quarter. Therefore, you have enough comfort on a granular level for the rest of the moratorium book's ability to start bearing interest and repayments. And it seems like a very aggressive number to say that only less than 10% will perhaps -- or even 10% will be affected -- that will be affected and the rest will be able to pay because in the last 3 months, you did not have that spectacular an improvement in the moratorium book? And the second question I have is when you speak to your other customers, besides the fact that there are business problems right now, the customers who are paying the interest and who are not really in any difficulty who are ex moratorium, do you see them on a more positive trend to this? Do you see a recovery in their activities in the manner in which they think that perhaps next year will be even better?

Okay. Let me take the first question. So you are -- if I reiterate your question, you are basically asking when I'm saying that out of INR 17,065 crores which is under the moratorium, we expect NPAs about 10% out of this portfolio, which might fall as NPA over the next few quarters and about INR 1,200 crores of that will get restructured. This estimate, we have actually, as I said earlier, we have done segment-wise, and we believe that in the personal segment, we expect 13% of -- 12% of the retail book. Today, if you look at my personal segment, total portfolio, it's about INR 14,798 crores, of which, we expect about 12% of that to slip into NPA in the next 2 quarters. So this is not 10%, it's about 12%, if you were to look at segment wise. And about 13% of this book is again expected to be restructured. So we are talking about 12% to become NPA and 13% to become restructured, which in terms of quantum, it's about INR 350 crores in terms of our NPA and INR 300 crores for restructuring, this is on the personal segment side. And on the business segment side, we expect 12% to become NPA and about 18% to get restructured. And the quantum there is about INR 450 crores for NPA and INR 625 crores for restructuring. So this estimate we have done actually looking at -- this estimate, we are -- these estimate we are -- we have made after looking at, as you said earlier, about the default history of such customers. And the way some of these business segments have got impacted, which have traditionally given us trade. So this is on one side. The other side, other question could be a -- leading question could be, out of the restructuring, do you expect anything to become NPA over a period of time? I think your guess is as good as my guess. We are hoping that things will become better in the environment. And if the -- we generally have seen that in the past, wherever accounts get restructured, depending on how the economic situation takes a turn, about 1/4 of that is likely to become NPA over a period of time. So I don't want to give an assumption that the entire restructured portfolio we will be able to service even in the days and months and years to come, we expect that some of them definitely would fall to go down because we should remember that these segments are generally not very resourceful. So if there is a situation which is going to hurt them badly, they will definitely slip into NPA even if we estimate the cash flows fairly well at the time of restructuring. So that's -- have I answered your question?

Sorry, so just to interject here again. I'm more concerned that recognition of the probability of the moratorium book becoming NPA, is that a detailed process that you have at the branch level? I mean, I don't believe in just looking at it on a segment-wise you can come to a conclusion on the potential customer becoming NPA or not, it's a combination of various things for somebody to become NPA. So do you have a very, very granular and detailed process at the branch level for them to come back to you and tell you we expect this much to become out of moratorium in NPA?

Yes. If you ask me, when we estimate, obviously, we estimate not only taking in account the past behavior of the customer, obviously, we interact with the team, which is handling such customers to get to know the reality on the ground. So that's expected of us and that's what we have done.

Okay. All right. And the second is, I wanted to ask you about the ex moratorium book. Do you see that book showing a positive like the rest of the people are expecting that next 2 quarters and then perhaps even next year will be far better improvement? Do you see that much optimism on the ex moratorium customer?

In terms of the repayment behavior, et cetera, that is the estimate which we have done, therefore we are fairly optimistic that if things don't really become worse than what it is today we expect this behavior to continue. But if you ask me whether the opportunity for business growth, et cetera, is it going to be hugely different in the next 2 quarters and next year? We believe that the opportunity will be fairly tepid till this year, I mean till March. And next year, we expect that things will become slightly better, and we are -- in our workings, we are taking about 10% growth for the next year. So if obviously, things become better than what we're estimating, we believe that these things can probably change for better. But if things become worse than what it is, obviously, we will be revisiting. And see as a prudent lender, we keep revisiting some of this when we -- whenever we come out with the quarterly results we go through our portfolio again as if we are looking at it fresh again. And whatever actions we need to take in terms of looking at how they will behave over the next few quarters, we'll take appropriate actions. Wherever we need to cautiously provide for likely falling of those cases into NPA, we'll do appropriate actions at that point of time.

The next question is from the line of [ Sreesankar Radhakrishnan from JBSN ].

But -- so a quick question from my side, sir. When you mention 26% of the portfolio is under moratorium. Within this 26%, how much has these people might have opted for portfolio and my understanding is probably within that, some people might have paid 1 installment, some people might have paid 2 extra. Can we have an idea of how many of this portfolio has not yet seen a single installment have been paid and it is completely under moratorium?

See, this aspect of 1 installment, 2 installment actually made a lot of sense when we were projecting the numbers of -- when we were estimating numbers of 36% for Q1. But if you actually look at August 10, when the moratorium got lifted. And the way -- now everything has fallen due. Whatever is the interest payable for working capital loans during the first 6 months as per the guideline, we need to create it as FITL and which has to be paid over the next 7 installments. And wherever it's term loan, we need to do appropriate action. So now there is no point in talking about 1 installment, 2 installment because now the -- since the moratorium got lifted, everything is just voluntarily supposed to be paid by them. Therefore, we estimated how much is the collection to be done for the month of September, and that's where I've indicated to you in my earlier answer, that 80% of that got collected, in which, we are finding that about 90% kind of collection has happened in the retail areas and slightly lesser collection has happened in the area of business segment and corporate loan. So in our view, this aspect of -- even somebody had not paid at all during moratorium because likely they wouldn't have paid because they wanted to conserve. But if that money had fallen due in September, if they paid fully, then it actually defies our assumption that if somebody had not paid, they would continue to default. We are a collective -- cumulative when you looked at it, we feel that 90% collection in -- especially in the retail area, home, labs, et cetera, it seems to be a fairly good indicator that people have started honoring whatever is the commitment once the moratorium got lifted. So to answer your question, right now, I believe that by the end of August, whatever was lying in their account, which -- whether it's catering to 1 EMI or 2 EMI, they've actually made use of that even while bringing down the moratorium percentages from 36% to 26% when we did a collection drive in the month of September. Wherever such amounts which were lying in excess were paid by the customer, and that's the reason why we could bring it down to 26% from 36%.

Okay. So if I rephrase my question a bit further, sir. As at August 31, how many of these customers have not paid even a single installment? Not how many, what value?

That's the -- that's what I'm saying. So if you are -- the -- based on INR 17,000 crores, which is the moratorium book if you were to look at. In a way to look at it what were the dues to be paid by them before 29th February when the moratorium was lifted? What were the dues paid by -- what were the dues to be paid by them during the period of moratorium? So if you add these 2, that's the total dues to be paid by them when the moratorium got lifted, okay? So if you look at -- if you had to look at that, we estimated based on whatever collection we could do in September. I gave an indication about what percentage of such portfolio will become NPA, what percentage of such portfolio will get restructured, is precisely based on whether they paid at all their dues, which fell due in 29th February or the dues which were in the period of moratorium. So that's a -- that adds up to INR 1,400 crores is likely to become NPA in the next 2 quarters, and we are estimating INR 1,200 crores to get restructured within the restructuring period, which has been indicated. So when I said 10% of INR 17,000 crores will become bad, of which, INR 1,400 crores we are reckoning in the next 2 quarters. We expect that INR 300 crores, which is left out, will become NPA over the next financial year. That's the way we have looked at it.

The next question is from the line of Roshan Chutkey from ICICI Prudential Mutual Fund.

Yes. Firstly, first, of the INR 17,000-odd crores, sir what is the collection efficiency as seen in the month of September?

This was the same question asked sometime back. It's about 80% overall.

No, not overall, only for the morat book?

See, morat book, when -- in the month of September, whatever is to be falling due -- I mean, the recognition of a morat book and the recognition of a regular book for the dues which is falling due in September is same. There is no special thing which we looked at for morat book. In fact, when we look at estimate of how much of that will become NPA, or how much of that will become restructured, that time, we had a specific look at this morat book. So that's why I indicated the percentages which can split into NPA and which can slip into restructuring. So for the month of September, see, I would be worried even if they have not opted for moratorium. But if they have not paid the September dues, I should be worried about that, too, right? So I -- therefore, we look at whatever is due, which is supposed to be collected by the month of September, how much have we collected out of that? I think that's the way I look at it.

Okay. All right. And what about the average MSME loan ticket size? Why has it increase -- decreased, sorry?

Average MSME loan ticket size. MSME -- typically, MSME average ticket size, if you were to look at -- let me just take out the numbers for our bank. Let me just quickly take that out and probably answer you. Just a sec. Yes. So your question is what? Basically, you're asking average ticket loans that...

In average MSME loan ticket size, in June quarter has jumped up to INR 65 lakhs and again, has fallen back to INR 49 lakhs. So what's happening here, I wanted to understand?

Yes. Okay. So this was due to reclassification of corporate book. See earlier -- for one of the answer -- questions I had answered that there is a little bit of rearrangement of the total book, which was shown earlier as corporate book. So some of them has actually now moved into business loan book, depending on the definition, which is newly given for SME. So when newer accounts have moved into...

If anything, that should increase the ticket size, right?

Part of business loan the average ticker size clearly has gone up. But just to tell you, from the market, typically, MSME for large banks. If you have to look at the segment, which is typically let's say INR 100 crores turnover and below as 1 segment and, let's say, INR 100 crores to, let's say, INR 250 crores which is the definition of SME, we were to look at the well-run banks typical average ticket would be close to a INR 1 crore for customers who are below INR 100 crores of top line and typical average ticket size would be about INR 8 crores to INR 10 crores for people who are INR 250 crores and below. So this is a normal average. So whatever we are talking about is significantly lower than that. So it's a impact, to just to give you the composture extremely granular.

Understand. But because of the change in definition, the ticket size should go up, right? I mean it should not come off?

No. It depends on the growth, no? Growth also of what we have done, right, and each of the segment also we have grown.

Right. But -- so such a drastic change, how can you explain that? I mean, INR 65 lakhs becoming almost INR 50 lakhs? I mean even growth -- incremental growth, whatever you have change then-- whatever you been chasing I mean, it's hard to understand this that's my point.

Okay. Let me -- just give me a minute, let me just check out that one.

Sure.

No, no, his -- the question is -- if I were to understand your question right you're asking. The average ticket size as of 30/09/'20 in that is about 49.84% for MSME?

That's right. Sir, Slide #12.

Your question is if you -- why that average has come down from the earlier number of INR 65 crores -- INR 65 lakhs, that's what you're asking?

Right. Right. Right.

I think I'll have to dig details and come back to you on that. But I can tell you that MSME total number of -- the total amount in crores for MSME book as per -- after restructure -- as per the classification is about INR 19,711 crores. And number of customers, number of account is about 39,549 number of accounts. So average ticket size loans which is about 49.8%. This is the calculation I have. But change from the previous one, I'll have to get back on that.

Sure. All right. And I will appreciate it if you can just disclose what collection efficiencies for the morat book? And I'm sure you have looked at it before giving out these restructuring numbers and slippage estimates, if you can talk -- also talk about the collection efficiency about the morat book in specific for the month of September. That will be very useful.

No, you -- that would be useful for you to estimate how much is likely to become NPA, or how much likely be restructured, right? That figure I'm sharing it.

Sure. The rest -- is it fair to assume then the rest of it is all paying in time?

Yes, yes, exactly.

So INR 1,700 crores, plus INR 1,200 crores is the problem book, the remaining whatever is all paid up?

Out of the INR 17,000 crores which we are talking, but based on the current estimate, obviously.

The next question is from the line of Pritesh Bumb from Prabhudas Lilladher.

Hello? Hello? Can you hear me?

Yes, yes.

Yes. Sir, I had 2 questions. One is -- first question is that what will be the trajectory of PCR from here on? And could you also guide on the provisions for the legacy book and the new NPA formation as you have guided? We have struggled with the lower PCR historically but now because of lower strategies we could ramp up the PCR now what will be the way going ahead what of a level of PCR you want to see and what provisions do you get? That is the first question.

Sure.

Second question is, what is the view on capital raising given we have a lower buffer in terms of CET1? And bank is also planning to grow like 10% next year. So we will have to -- and given with commissions which may come from the new NPA formation, you could see some capital being required. So how do you want to take it forward for that? So these are my 2 questions.

Okay. So to answer your first question, PCR -- as you said rightly, PCR for this quarter, which is looking at about 65% clearly is because of the advantage, which is there due to the COVID situation of not classifying et cetera. But we have done our estimation based on -- for the next 2 quarters, assuming that our advances, we are not really projecting any growth. Taking that into account, I believe that PCR, including write-off, will be in the range of 60% to 63% for the next 2 quarters. And it's expected to be in similar range for the next year so between 63% to 66%. That's the range which we are looking at for next full year. For PCR, excluding write-off, it's typically what has been looked at by analysts like you that used to be in the range of 39% for the Q1, which is currently at about 48%. But we believe that this 48% is clearly slightly one-off high number. So it's likely to be between 40% to 42% for the next 2 quarters and a similar range for the next full year, 41% to 43% kind of range for the next full year. So this is on the PCR. This is based on the fresh slippages, the recovery, which will happen out of gross NPA, all that and the cumulative provisioning, which we are looking at based on the numbers which I have spelt out earlier. We have taken those into account and we are estimating it to be like this. With respect to capital, yes, we have taken action in terms of getting the approval for raising equity, and we are -- once we are ready for in what form and what quantum we want to raise, we'll get back to the market, we'll get into the market to do that. I believe -- we believe that the total -- overall equity -- overall infusion will happen by raising funds maybe in 2 tranches. To start with, it will be a much smaller quantum. And depending on how things pan out, we'll probably look at raising some more in the next year. Then we will again take it off on how things pan out because it's anybody's guess as to how future of COVID is going to be. So depending on that if there is a need for any further infusion of capital, we will take appropriate action at that time. Now the immediate need of the hour is to ensure that we are taking care of our capital, to take care of this provisioning impacts, et cetera. For that we'll be hopefully late Q3 or maybe early Q1, early Q4, we will be hitting the market for equity infusion.

Sir, the follow-up on the first question. You said a similar range for this year and next year as well to reach this type of a provision coverage we had on about INR 200 crores type of a provision each quarter. So in that view, will it be same trajectory of INR 200 crores per quarter? Or do you see something a little lower or maybe higher in terms of provision on the P&L side?

If you -- no, if you were to really look at fresh slippages, for this quarter and for the Q1, it's been obviously at a much lower level because of this morat, which was there. So that's likely to become high for Q3 and Q4. So depending on that, obviously, the provision will also appropriately be done for that. Therefore, we expect the 65%, which is currently, will be probably going down to 60% to 62%. And at a PCR, excluding write-off rates, will be about 40% to 42% kind of level. So next year, we believe that the fresh slippages, hopefully, cumulatively, it will be far lower than what we are estimating for this full year. And therefore, it's expected to be sustained in those ranges.

The next question is from the line of Jai Mundhra from B&K Securities.

Congratulations on your appointment, sir. I have a couple of questions. First is on collection efficiency. So when you said you had 80% collection efficiency for September, could this include appropriation from customers, which had paid the money in March and subsequently opted for moratorium? And hence, if you see purely duly received for the month of September could it be lower than 80%?

Mr. Jai Mundhra, I'm so sorry to interrupt, but your audio is not very clear, sir. Can you please use the handset mode while speaking? If you can please repeat your question.

So I have -- first on collection efficiency. Would you -- this 80% number, would it also include the collection, which you had got in the month of March because some people would have deposited the money in March and then subsequently have opted for moratorium?

No. Whatever is -- see, if you look at, moratorium as a percentage has come down from 56% to 36% to 26% by June end and by August end. So whatever has been paid, et cetera, that's all been accounted. Whatever I'm saying as month of September collection is whatever has fallen due in the month of September, of which we have collected about 80% of the amount which has fallen due in month of September.

Okay, sir. This was collected in the month of September only, not the previous appropriation, right?

Yes, yes. It's a collection made on the amount, which has fallen due for the month of September collected from those customers.

Okay. Second question is, sir, on retail, when you say -- if I heard it correctly, you said retail collection efficiency is 87%. And we have around 37% of the retail portfolio not pay -- I mean, not paying for the month of September, right? So how does this tally?

Sorry. Where did you get the 37%, sorry?

The 37% is, sir, INR 5,497 crores, which is the personal loan, which is still under moratorium, Slide 42.

Okay. So yes, you are saying -- I mean, what I said earlier was INR 14,798 crores is the personal segment loan, of which INR 5,497 crores opted for moratorium as on 31st August, which is about 37% of the book -- of the personal segment book. So your question is this collection percentage, which I talked about, they are -- for each product segment, they are in the range of 85% to 90%. Like, for example, mortgage loan is about 87.5%, vehicle loan is about 92 point -- 93%, housing loan is about 91%. So that's a collection -- that's the collection which we made for the month of September from these segments, other personal loan, it's about 85%. So being that what it is, when we estimated NPA and restructuring, as I said earlier, we looked at whether such customers have exhibited defaults in the past ever, whether they were in any of the bucket dues, et cetera. Based on that, we have made an estimate that 12% of that is likely to become NPA and 13% is likely to be restructured. So cumulatively, you're talking about 25% of the book going to be in some form of stress. Either they'll become NPA in the next 2 quarters or they'll become restructured and probably recover over the next few years -- next couple of years. So that is about INR 650 crores.

No, no, that is understood, sir. Only mathematically, 37% of the people are not paying and 90% of the money you are receiving. That is not possible, no, until unless you are counting the arrears also in 87% or 90%? Or what is the gap there? Sorry, so what is the gap?

No. That 37% of the people have opted for moratorium. And the people who opted for moratorium, if you look at many of them, they were conserving money for emergency. So many of them were opting for moratorium, not because they were stressed. They were actually conserving. And as and when they have -- and many of them, if you look at, 36% -- 56% has become 36% and 26% because of people who have also not wanting to pay higher interest because at the end of the day this interest on interest issue, which is being raised now, this has been a -- this was a concern for a very shrewd borrower. He would have thought about it even then. So they started paying. That's the reason why it came down also to 36% and subsequently 26%.

Right. So 37% of the portfolio did not pay for September, that is right?

No, no, no. 37% of the retail -- personal loan book was under moratorium as of August end.

Meaning what? They did not pay?

Out of INR 17,000 crores, which is lying in the moratorium book as of August end, INR 5,497 crores were from personal segment.

Yes. So what does it mean, sir? So that they have not paid for the month of September, right?

No. It's August end I'm saying, no.

But you have written September end, no, sir?

Moratorium got lifted in August end, no?

Yes. So what does it mean that 5,000...

I'm giving the figures as of August end.

But you have written September.

If I were to reiterate, maybe there is a understanding gap. What I'm saying -- again, let me reiterate. Out of INR 65,000 crores, which is our total advances book, personal loan contributes INR 14,798 crores, of which INR 5,497 crores worth of personal segment was under moratorium as of August end, which is about 37.1% of ratio of INR 5,497 crores to INR 14,798 crores. Now if you were to look at for the month of September, the dues of all the people who are supposed to be paying their dues and people who have opted for, let's say, moratorium, even amongst unseen business segment, et cetera, who have got FITL, et cetera, which was allowed to be paid over 7 installments starting from September to March of '21. If you were to look at total amount to be collected for the month of September, segment-wise, if you were to look at, that's the ratio which I read about, where we are cumulatively talking about 80% collection, of which mortgage, et cetera, is at about 87% to 92% -- 90% level and corporate, et cetera, is about 73%, 75%, 78% level. Total it's about 80% level.

Understood, sir. So this 26% number is as of September -- as of August end, right?

Yes, yes, correct.

Because the presentation says September end?

Moratorium...

This was given as of the September end...

Now results are as of September end, but all of you know that moratorium got lifted by August end, no. So whatever moratorium book anybody is talking about clearly has to be as of August end because there is no moratorium at all in September.

Okay. No. But moratorium, it could be deemed moratorium because Supreme Court has said it has deemed moratorium now?

Come again, sorry?

Anyway, so you are clear that this is -- this 26% number is as of August end, right?

Absolutely.

Right. That helps us. That helps. And now sir, on large corporate side, when you say INR 600-odd crores and that are clearly at risk and may probably slip and would slip, it looks like that this is -- I mean, you have a BB -- BBB below -- I mean, BB and below book, which in -- which is, of course, the below investment grade. That book within the INR 100 crores ticket size and above is around INR 670 crores. So it looks like this should be a subsegment of the -- I mean the INR 600 crores slippages that you are estimating should largely be from BBB and below book? Or you are estimating -- or I mean I'm just saying that are you underestimating or no in the sense that it should flow from INR 670 crores only? Is that -- would that be right assumption?

Yes. Good question. See, if I were to just reiterate, we have INR 100 crore-plus book. The total book is about INR 4,791 crores as of September end, okay. In which, if you were to look at composition, AAA is about 22.38%, AA is about 37.38%, et cetera, and BBB is about 17.68%, BB is about 2.4%, C is about 2.4% and D is about 9.16% and there's unrated portfolio also. But if you were to really look at the amount appearing in BB, C, D, et cetera, these are all basically 1-month account and there is a cement-based -- cement -- belong to the cement industry. There's an account which is based out of Calcutta, where there is a very high possibility of resolution happening, because this is -- though it is rated D by CRISIL, there is a resolution which is already being worked out. In fact, all the -- it's a consortium banking and all the banks who are part of this consortium, they are seeing a very high possibility of resolution happening. In fact, if things go as per plan, it should get resolved by November end, where we can -- where, we don't estimate this account, which is appearing as D of INR 439 crores. We believe that the hit will be far, far lower than that based on the resolution which we're talking about. But however, we are reckoning the entire amount as -- under stress. Similarly, if you were to look at the account, which is categorized as C, here again, there is -- it's a retail entity. And here again, there is a resolution which is already there. And it's just getting stuck because of some litigation, and this is also likely to get resolved. So we are -- frankly, we don't really foresee problem in this account too. There is a BB rated case, which is a Kerala-based, jewel-based large group. We actually -- though it's rated BB, we absolutely expect nothing to happen in this. Entire money will be paid. We have rated it as BB.

Gold NBFC.

Gold -- it's a gold NBFC. And we believe that there won't be any impact on this at all. And the unrated exposures, again, it's -- there is absolutely no delay or default at this point in time. Therefore, we expect -- this is in the airport segment. And we expect things to pan out over a period of time. And however, we'll be watchful, given the fact that COVID has indeed affected the travel segment. Therefore, airports, et cetera, definitely would have been impacted. But as of now, we are not expanding and it is though we have rated it as BBB. So internal rating is BBB, external rating is unrated. So therefore, if you were to look at BB and below, which is a concern -- which is right concern from your side, we just want to say that we have closely looked at each of these accounts. And we believe that there is a very high resolution possibility in 2 of the 4 accounts and 1 complete resolution out of this 4 accounts and 1 we will be closely monitoring.

Right. And sir, if you have the quantum of this retail entity, which is stuck in the litigation, I mean, our exposure? And the Kerala-based NBFC group where you have -- I mean, I believe the exposure is a part of some other business in the gold loans NBFC, right?

No. The -- one which is appearing in C rated in this table which is more than INR 100 crores table, I believe you have that table with you, right. One which is shown as C is INR 115 crores. That's the one which is NBFC.

Okay.

There are 2 accounts of INR 115 crores. If you look at BB and C, both are INR 115 crores. One INR 115 crores is on the retail. One INR 115 crores is on the -- that large NBFC player who has got a...

Hotel project.

Hotel project. It's not NBFC, which is defaulting. It's -- belonging to a large NBFC group. They have built a hotel and that hotel is what is shown here as BB based on the external data.

Right, sir. And just to -- sorry, sir, just to continue on the series based on...

Yes. I just want to say that there is no default in this account. Just want to reiterate that.

Right. Right, right. So sir -- I mean so the collection efficiency for the month of September is 80%, and you are suggesting that INR 3,000 crores is roughly 15%, 16% of the INR 17,000 crores. So this way, you are saying that 80% of the people are anyway paying and 20%, which are not paying, most of them could slip, and that is how you are building this INR 2,900 crores. Is that the way to look at it?

No, no, no. See, we cannot say that somebody has not paid for 1 month, we should reckon them as NPA. I mean, obviously, a lot of recovery happens also in subsequent months. So when we look at estimation for NPA and restructuring, it's not just about 1-month behavior. We need to look at to which industry do they belong to, whether they have indicated -- whether they have moved into SMA-0, 1, 2 in the past. If it's a retail account, whether they have slipped into any of the buckets in the past and how frequently are they showing such behavior. All those are obviously factored when we estimate how much is likely to fall as NPA. In fact, that's the reason why we are saying, though we are saying that 10% is what will fall as NPA over next few quarters, we are reckoning that INR 1,400 crores of that will fall -- become NPA in next 2 quarters, maybe. That's based on our detailed understanding of what is happening. But obviously, all these are based on the estimates of what is likely to happen in Q3 and Q4 and how COVID situation pans out and how it will impact the various businesses of our customers. So -- but we believe that we are -- we have done some homework and we are saying that this is what we are estimating at this juncture. Clearly, we will -- as and when we come out with our third quarter results, that time again we'll have a relook at all of this. And if there is a revision to be done either ways, whether it's positive or negative, we will disclose that also at that point in time.

Right. Sir, the question is what -- where I was coming from is INR 17,065 crores in exit moratorium. You said the collection efficiency is broadly same as the total portfolio of the book, which is 80%. Is that what you meant when someone asked that what is the collection efficiency in the moratorium book? You said it is broadly similar to the overall bank level. It's around 80%.

I just want to reiterate. See, once the month of September comes, the distinction of a moratorium account and non-moratorium account, we should be concerned about what out of them is likely to become restructured or likely to become NPA. So I'm sharing with you what our estimate based on the understanding of various accounts that have formed in part of these business lines. Now out of the total amount, which has fallen due for the month of September, which is both from accounts which have sought moratorium and those accounts which have not sought moratorium, we believe that the percentage collection is -- which I'm sharing with you is based on the dues. At the end of the day -- after August, it's definitely -- my approach is not going to be any different for a moratorium or a non-moratorium account. I need to be concerned about both of them. If they default, we need to either do restructuring or we need to categorize them as NPA. So therefore, we have had a look at both of them. And we believe that out of the moratorium, what is likely to fall as NPA, what is likely to become restructured, is something which I'm sharing. So that's based on the estimate of the moratorium book and the industry to which they belong to and their past behavior, et cetera. So that's a distinction I want to make it. I mean, beyond a point, I think it's overkill to really say how much is the specific collection efficiency. We have factored that only in the estimation of what is likely to become NPA from the morat book. And I read out also the percentages in various business lines we have. How much of -- what percentage of that book is likely to become NPA, what percentage of the book is likely to be restructured, even that percentages I have read out in one of the answers. So I think we have -- what we believe is that we have done that work and we have disclosed what we have done.

Right, sir. Last question, sir. In your BSE release, the point #10, sir, if you can elaborate what is this, sir? The Indian Parliament has approved the code on Social Security, which impacts the contributions of the company towards PF and Gratuity.

Sorry. Sorry, I didn't get your question again. Please repeat.

Sir, the point 10 on Social Security in our BSE release that says that contribution by the company towards Provident Fund and Gratuity there is -- there could be some impact. If you can explain, sir, what is the change and how are you approaching this issue? Have you made any communications?

This is based on settlement.

No, no, this is [indiscernible] new restriction -- I mean new rule is what he's talking about. See, the final guidelines as to the numbers, et cetera, is still not declared by the government. So since the rule is already proclaimed, we have made a note on that. Otherwise numbers are all not still -- not declared by the government itself.

Sir, is this applicable for banks? Because I thought it was...

Mr. Jai Mundhra, I'm so sorry to interrupt. May I please request you to rejoin the question queue for your follow-up? [Operator Instructions] The next question is from the line of Tejas Parekh from Citibank.

My questions have been answered.

The next question is from the line of [ Krishnan P.S. ] from India Advisory.

I have 2 questions. I think one of them has been answered. I think from a shareholders' perspective, value perspective, do you feel it will be good for the bank to explore a strategic partnership with a large financial services firm that does not have a banking license or maybe even consider a merger with a large financial services firm or other private sector bank? I'll be interested with your views about it.

No. We -- frankly, I have no views on this. We believe that this bank has a -- is a 91-year-old bank, which has had great vintage. And it has seen ups and downs over the several decades of its existence. And there is a great franchise value to this brand. And we are very well entrenched in Southern part of India, and we have a great franchise in Kerala. And our -- we have a very great franchise in NRI base. And we also believe that this bank is -- in terms of corporate governance, et cetera, is one of the best which I can definitely say. With all this, I believe that the share price is definitely a concern. But then we believe that if we focus on our core activity of doing all the right things and steer the bank in the right direction, we believe that market will definitely look at the performance and it will correct itself. So we really don't foresee that to be a reason for looking at merger or any of those because we believe that this bank enjoys a tremendous reputation and franchise value.

The next question is from the line of Swanand Samant from Chanakya Capital.

Sir, my question is on moratorium again. So in the June quarter during the conference call, it was around INR 23,000 crores. So at that time, the comfort was there [Foreign Language] -- which was 36%. So the comfort was there [Foreign Language] 21% of the morat people have enough balances to pay all 3 EMIs, 5% have balance to pay 2 or 3 EMIs and 8% have balance to pay 1 EMI. So the stress was only that 2%, which comes about INR 500 crores. So what has changed so drastically in the next 3 months [Foreign Language] the estimate has gone from INR 500 crores to around INR 1,700 crores kind of expected stress?

I just want to remind you that moratorium period was from March to August. So it's about 5 months, right? March, April, May, June, July, August, 6 months. So if somebody had only 1 EMI or 2 EMI, it's only to indicate that these people -- it's not that they have absolutely no money, and therefore, they have sought moratorium. I think the endeavor -- the effort that time was to say that people are actually conserving money because they don't know how long it will go, how long the -- how much the impact is going to be. So just to give a sense of how much -- I mean, whether these customers are indeed completely high and dry or do they have some liquidity, and they have sought moratorium just to ensure that they have some money for emergency. So that was the indication given for -- to say that 1 EMI, 2 EMI, 3 EMI. But the way I look at it is from -- as of June end, 36% of the cases, which were under moratorium, and when the drive was happening for collecting recovery from these customers, which actually led to this 36% becoming 26%, is obviously due to some of them who might have had a cash would have paid that and they would have also mobilized some more to ensure that there is no delay or default. Some people would have continued to pay partially, and they would have remained unpaid for the other ones. So all that cumulative adds up to 26% of the book under moratorium as of August end. And out of that, which is lying, is what we have done estimation in terms of collection, which we have done for the month of September and what is likely to fall as NPA or restructured for the periods going forward. So just to reiterate, there is nothing -- if at all anything which has happened, I think it's a collection, which has actually happened from bringing it down from 36% to 26%, which is a good reduction, even by focusing on collection for -- purely for the month that it happened, fairly well in for the month of August when -- so by the end of August, we brought it down to 26%. That has happened due to collection drive which has happened during that period. So there is nothing which has drastically gone wrong or right -- this thing -- I mean this -- at least as per me.

The next question is from the line of Pranav Gupta from Birla Sun Life Insurance.

Hello?

Yes. Yes.

Yes. Am I audible?

Yes, yes, you are. Yes.

Yes. Just -- so most of my questions have been answered. Just 1 question. So this estimation that we have done of customers that might slip or might require restructuring from the moratorium pool, have we interacted with these customers? And if we have, what are the reasons we are sighting for not paying up right now? Is it solely that business has been affected on a temporary basis? Or is this a permanent loss of income that they are sighting? Why I'm asking this question is because the feeling is that this cycle could be much different than real cycle because if a customer is facing temporary loss of cash flow they can very well pay up once things normalize? That is something I'm trying to understand.

Right. No, I think it's a good question. 2 things I just want to mention. If you've asked me personally, whether I have visited any of these customers, the answer is no because I took charge on 1st October. And clearly due to COVID, travel itself has become extremely restricted. So I have not visited any of the customers. But...

Sir, you may please go ahead.

Yes. However, when we were estimating the behavior of specific counterparty cases, et cetera, we have taken a feedback from the regional heads and the branches who are actually dealing with these customers, plus the collection team, which is actually handling these customers on a regular basis. Their inputs have been taken and the estimates have been made. So obviously, with respect to feedback from customers as to what is affecting them, there are -- we can probably say that it obviously depends on the industry to which they belong to and whether it's an individual customer or a business segment. Obviously, the impact of COVID is very different for different sets of customers. But typically, what we are seeing is in the business segment where the collection definitely efficiency is lower relatively compared to individual segment, it has clearly happened due to some of the businesses having impact on supply getting interrupted due to the various situations. Some of them are impacted because of demand going down. Some of them got impacted because the working capital cycle has gone up. And many of the people who are in the -- particularly in the large corporate side who are part of construction, infrastructure, EPC, those kind of segments, they have all obviously been impacted because there's no major work which is currently happening and therefore -- and even for the works which they have done, their payments, et cetera, are getting delayed. So the impact of COVID definitely is very different for different sets of businesses. As far as individual is concerned, we believe that going by the collection efficiency, it is not definitely a bad performance at all in terms of 90% of the people paying just after coming out of moratorium. I think it's a fairly good indication. But obviously in terms of how the whole thing will pan out in the next few quarters and next year, we are also closely watching. And hopefully, if things become better, maybe some of us will also travel to get to understand firsthand about what is happening with those customers. Today, obviously, we're restricted in traveling. Therefore, to that extent, we are going by our branch and regional offices who are interacting with them. And our collection team is directly engaging with these customers for collecting recover -- for recovering money.

Right. Right. Sir, just as a follow-up. Obviously, I understand that it is not possible for current [ people ] to travel due to restrictions. I just wanted to understand that are -- especially in the retail segment, are customers giving us indications or indications for collections saying that as things start to pick up we will be in a position to repay? Why am I -- again why I'm asking this is because maybe you could see a slippage now, but say 6 months down the line, obviously, assuming things improve, maybe they are in a position to start repaying and they get upgraded. That's just something I'm trying to get a sense or a hang around.

Your question is not coming -- your voice is not too clear. But if I understand right, you're asking, as far as retail customer is concerned, today, they might be paying, but you are anticipating that depending on how things pan out, they may or may not pay in the next 2, 3 months. Is that the question?

No, no, sir, I'm asking the why -- I'm asking that the customers who are not paying today...

Okay.

May be in a position to pay say 6 months later, right?

Yes.

So maybe they slip now in this quarter or the next quarter, in Q3 or Q4. But say, if they see an upturn in business or upturn in their financial situation, they might pay up and get upgraded. Is that sort of a sense, which is coming to your collection people on the ground right now? Or is it too early to comment?

Frankly, I mean, we will definitely -- it's too early to comment, frankly, if you ask me because we've just come out of the moratorium and we are still in the thick of COVID situation becoming worse in Kerala as well as in states like Maharashtra, et cetera, and Tamil Nadu. See, we have actually lot of our concentration of businesses in Kerala and next to Kerala, it's Tamil Nadu. So we have 10 of our 20 regions based out of Kerala. And if you have been noticing, Kerala of late things have actually a little bit worsened and the COVID situation is indeed becoming worse than what it used to be in early days. So we are not getting the sense that customers are optimistic today. They are obviously in the midst of what is happening. So we believe -- and we -- therefore, when we estimated, we are estimating that, yes, things can be hurting them. And therefore, we are estimating that they are likely to be -- that side want to restructure it wherever restructuring is an option. Where we are already seeing that cash flows are clearly not there, and they're definitely going to be defaulting, we have reckoned them as likely NPA for the next 2 quarters. So just to answer you, whether there is an early indication of whether the people are feeling that things can become better, and they'll be able to pay in 3 to 6 months' time? As of now, we are not getting that sense. But as and when we get such signals, definitely -- see, this exercise -- whole exercise, we'll have to keep redoing it as per me every quarter. We will have to look at it afresh to see what is coming out of bad situation, what is getting into bad situation. I think we need to -- it's a one-off situation for all of us. I mean we have never faced this in our entire 3, 4 decades of our experience as bankers. So all of us are together to see what actually is going to pan out.

We take the next question from the line of Nilanjan Karfa from IDFC Securities.

Sir, just a question on -- say whole bank is roughly 45-55 ratio in terms of term loan and working capital. So I just want to understand how much capitalization have we done on the working loan side?

Sorry, what's your question? Your voice is not too clear. Come again, what is the capitalization on?

On the working capital side, sir.

You're asking what is the exposure on the working capital side. Is that the question?

No, no. Working capital is almost 55% of the book roughly, if I understand.

Okay.

What I wanted to understand is while you have given a collection efficiency of 80% on the term loans, how should we look at the working capital loans?

Understood. Understood. I'll just -- just give me a minute, let me just take a look. Just give me a minute. Let me just take out that. See, for the working capital set of accounts, if you recall, as per the guidelines, we can, cumulatively, whatever is interest payable during the moratorium period, you can categorize them as FITL and that has to be collected over the next 7 months till March 2021.

Correct, that was my question, sir, yes.

Yes. So if you were to ask -- if you were to look at what is the demand made on those specific category, the demand made was about INR 38 crores for the working capital we have. Of which, we could get, as of October 12, I mean, when we had a look at this, we had collected about INR 26 crores out of INR 38 crores, so which is about 68% in the FITL side.

Right. Excellent, sir. And just a clarification on this 80% of collection efficiency. Sir, denominator, you have clarified...

This is the operator. I'm so sorry to interrupt, but your audio is not clear, sir. We are unable to hear you well.

Is it better now?

Yes, yes, you may go ahead.

I'm so sorry, sir. Sir, my question was of this 80% collection efficiency, which we have disclosed, the denominator is quite clear, which is the total demand for the month, irrespective of moratorium or non-moratorium. What is the numerator? Is it just -- I mean, could you segregate, if somebody has sort of prepaid something or somebody who has taken a moratorium and has now cleaned up his entire overdues, would you have a sense of that because that kind of changes fundamentally how many -- what percentage of customers have actually paid and not?

Against the demand made.

Against the demand made. So if the demand made is -- see, if you -- let's say, for the month of September, whatever is the demand made, let's say, if INR X is the demand made and if they have paid INR A., it's A/X. That's the collection efficiency, which we always talk about.

Right. No, no, my point is, let's say there is a customer who has taken a 6-month interest holiday, right? In the September, he will pay his regular dues, I mean, which is accruing for 3 months maybe or monthly basis, depending on the customer.

Correct.

Right?

No, that we will take plus if he's opting for moratorium, if he's opted for moratorium and if he wants the -- avail the dispensation which is given, then the interest due, which has fallen for the last 6 months, will then be converted into FITL, and he will have to pay 1/7th of that FITL for the month of September.

No, no, no, I'm talking about the term loans now, sir, not on the working capital loans.

Okay. So term loans it will be -- term loan again -- what is -- the whole tenure will be extended by 6 months. That's what the guideline says.

Right. My question was this. Let's say, I'm a home loan customer, sir. So let's say, my monthly interest payment was, let's say, INR 100. So 6 months I have not paid. September, I will pay INR 100, right? So denominator is 100, right? Now if I end up paying INR 300, will it -- it will therefore optically inflate your collection efficiency number?

No, no, no. We will only take INR 100. Whatever was fall -- whatever was the due, which is rightfully paid by September, if that is INR 100, the -- and if had paid INR 100, it will be 100 on numerator, 100 on denominator.

We will just take it as 100.

Thank you. Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Mr. Rohan Mandora for his closing comments.

Thanks, Janice. We thank the management of South Indian Bank for allowing us to host the call and all the participants for joining. We can end the call. Thank you.

Thank you. On behalf of Equirus Securities, that concludes this conference. Thank you all for joining. You may now disconnect your lines.