Bank of Maharashtra Ltd (NSE: MAHABANK) Q2 2025 Earnings Call dated Oct. 15, 2024
Corporate Participants:
Nidhu Saxena — Managing Director and Chief Executive Officer
V. P. Srivastava — General Manager and Chief Financial Officer
Unidentified Speaker
Amit Srivastava — Chief Vigilance Officer
Analysts:
Darshil Jhaveri — Analyst
Pinaki Banerjee — Analyst
Deepak Gupta — Analyst
Samraat Jadhav — Analyst
Jai Mundhra — Analyst
Rohan Mandora — Analyst
Ashok Ajmera — Analyst
Bhumika Jain — Analyst
Sneha Ganatra — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q2 and H1 FY ’25 Earnings Conference Call of Bank of Maharashtra. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
We have with us from the management Shri Nidhu Saxena, Managing Director and Chief Executive Officer; Shri Asheesh Pandey, Executive Director; Shri Rohit Rishi, Executive Director; and all General Managers of the Bank.
I now hand the conference over to Shri Nidhu Saxena. Thank you, and over to you, sir.
Nidhu Saxena — Managing Director and Chief Executive Officer
Yeah. Good afternoon. Thank you so much, and thank you to all the analysts who joined this call. And I’m happy to share that we have done our half yearly results today and the numbers are very encouraging. Lot of strategies were put in place in the beginning of this financial year in areas of concern like deposits, and those all are yielding good results to the bank. And I will very quickly take you through the major achievements.
So my total business has seen a growth Y-o-Y of 17% and total advances have grown by 19%, while the deposits, which were continuing as concern in the industry, in the system, last Q we had seen a single-digit growth, but lot of improvement has happened in this Q2 and total deposits have grown by 15% Y-o-Y and within which CASA also has seen traction. CASA has grown Y-o-Y by 12%. And in terms of absolute number, we have added INR15,000 crores of CASA in our book.
The ratio stands at our level of guidance, which is to maintain it around 50, and that’s what the CASA ratio is there with the bank. Coming to the RAM side, the loan book, so all the three parameters, retail, agri and MSME have seen a high double-digit growth of 23% Y-o-Y in retail, agriculture 34%, wherein large part of contribution has come from agricultural gold loans. And then MSME also has seen a Y-o-Y growth of 25%. Corporate book for me has grown Y-o-Y at 9%. As I said, gold — so gold has been a focus product for growth this financial year and — which has seen a Y-o-Y growth of 60%.
In terms of asset quality and stress SMA position, we are again very comfortable. GNPA has improved — has come down to 1.84% against one year back of 2.19%. NNPA is at 0.2%. Recovery also has been good in this Q2. And with cash recovery of INR120 crores, upgradation around INR100 crores and write-off recovery of INR255 crores, we have a total recovery of INR475 crores.
PCR is standing at a healthy level of 98.31% and CD ratio, we are maintaining at the desirable level of 78.72% against our guidance of maintaining it around 79%, 80% levels.
Net interest income also has seen a good growth of 15% Y-o-Y with an addition of INR375 crores. NIM also has been an improvement and NIM has grown 3.98% from 3.97% and 3.92%[Phonetic] in the last two, three quarters, whereas the concerns were getting expressed in the industry whether banks would be able to maintain the NIM and there may be a level of deduction in NIMs being reported by banks in this Q-o-Q basis at least. But I’m happy to share that we are able to maintain that high NIM of 3.98%.
Operating profit also has grown year-on-year 15% at INR2,203 crores. Net profit has seen a remarkable improvement of 44% Y-o-Y growth and we have added INR406 crores more than previous year at INR1,326 crores. ROA year-on-year has improved by 36 basis points and it stands at 1.74%. ROE at 26.01%. We are adequately capitalized with CET1 of 12% and CRAR of healthy 17.26%.
Overall, what we have seen that the guidance that we have kept for this financial year on various growth and profitability parameters and other efficiency ratios, we have achieved those guidance in the half year and at many of the parameters, we have only surpassed the guidance. And going forward, we are confident that this trend will be only seeing improvement in the Q3 and Q4 of this financial year.
So I think over to you, Mr. Srivastava, CFO, will take you through the presentation or…
V. P. Srivastava — General Manager and Chief Financial Officer
Sir, we will start question and answers since we have already uploaded the PPT and [Technical Issues]
Nidhu Saxena — Managing Director and Chief Executive Officer
So broadly, this is from our side and we’ll be open to your questions on any of the issues that you would like to take additional information on. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Our first question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead.
Darshil Jhaveri
Hello. Good evening, sir. Hope I’m audible. Hello?
Nidhu Saxena
Yes. Yes.
V. P. Srivastava
Yes.
Darshil Jhaveri
Yeah. Yeah. Yeah. Sir, firstly, congratulations on a great set of results. Like — so I think whatever guidance we’ve given is, we’ve actually surpassed most of them. So just wanted to ask like would you want to revise the guidance? I think in terms of ROA as well as NIM we’ve been outperforming what we said. So could we — how do we look at it going ahead? Like could we expect a more robust — like should we go to a 2% ROA and a 4% NIM?
Nidhu Saxena
So both these parameters which are important, we are performing consistently on the ROA and RO — and the NIM, what you mentioned over the past few couple of quarters. And although going forward, we are also mindful that if you talk of NIM, there is a likely rate cut that is being discussed. We really don’t know when it will happen, but if that has to happen, I have a loan book of 37%, which is linked to repo. And with a rate cut, that loan book will get immediately repriced.
So while I am maintaining a NIM of 3.92% to 3.98% level, and we have grown NIM Y-o-Y almost 9 bps, but we are keeping a conservative guidance for ourselves of 3.75% to 3.85% because of this factor that when the rate cut is to happen, I am going to — for some time when the repricing or the deposit repricing, which will happen only with a lag, for that reason, I’m keeping a conservative NIM.
And my ROA, which is 1.74%, again, there is a guidance of 1.6% to 1.65%, that would be maintaining for this financial year.
Darshil Jhaveri
Fair enough, sir. That makes sense, sir. Sir, I also just wanted to know in terms of our gold loan, we said that agri loan has been also boosted by gold loan and in general, gold loans have grown a lot. So could you just describe what’s happening on ground? Is it like the price of gold has risen, that is why that’s helping us or just somewhat how that been?
Nidhu Saxena
So if you talk of this gold loans, there is a huge market out there and it is only that despite banks which have grown this portfolio, commercial banks, over the last two, three, four years. In fact, after the COVID years, gold loan has seen a lot of traction in all the banks. Still I feel there is a huge scope and we have also reoriented ourselves because gold loan — there are two basic requirements.
One is the safekeeping of the pledged gold ornaments and the other is the appraisal — infrastructure that is required to appraise the gold jewelry when you are coming for a request from the client for extending your gold loan. So with these two infrastructures, once they are provided, there is a huge scope still for all the banks to grow and it is a very beneficial product, is able to easily be onboarded by branches.
It is quite a stable advance. It is also giving us that a good pricing and plus the risk weight is zero. So with all these incentives around this product, we have also grown this portfolio. And going forward also, we maintain to be — remain bullish on gold. And the pricing which has gone up is only creating lot of comforts around this scheme because over and above what the RBI prescribed LTV, we are only getting more traction there.
And in terms of gold also, see, we are mostly classifying able to take it in the agri gold loan as per the RBI permissible scheme. My portfolio has already touched INR13,000 crores. And by end of the year, we plan to take it to minimum INR15,000 crores, which I see — which I see is quite achievable.
Also, we have done some co-lending partnerships with leading gold loan NBFCs, and we are also building a sizable co-lending loan book in this segment of gold loans.
Darshil Jhaveri
Great, sir. That’s great. Sir, I’ll just make last question on my part.
Operator
Mr. Jhaveri, may we request you return to the question queue…
Darshil Jhaveri
Okay. Okay. Yeah. Yeah.
Operator
Thanks. So ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have any follow-up questions, you can rejoin the queue. The next question is from the line of Pinaki Banerjee from AUM Capital Private Limited. Please go ahead.
Pinaki Banerjee
Yeah. Good afternoon, sir, and thanks for the opportunity and congratulations for a good set of numbers. Sir, actually then coming to the Page 7 of your investor presentation that agricultural sector has shown the maximum growth of 34%. And sir, if I recall, in the last con call, you had mentioned that you are in the process of going away with farm credit and moving more towards this investment credit like cold storages and food processing. So sir, can you give me an update on this, please?
Nidhu Saxena
Yes, Pinaki, what we have said, we are — actually if I give you the number, the YTD growth if you see, my agriculture gold loans in the investment credit and this gold loans, they have grown YTD at 29%, whereas the others, which is the working capital KCC has seen a growth of 6%. So what we have experienced around that certain concerns in the area of the KCC loans, we have also tried to see that we are not growing the agri book in that segment where the concerns are lying.
So we have done a lot of changes in our underwriting as to who is actually sanctioning. The sanctioning in the KCC has now been not allowed in branches and there is a centralized cell housed in the respective zonal office and that’s where the underwriting for the agri loans is happening.
So we are comfortable growing this portfolio and where the large part is coming from contribution, as I said, said from gold loans. Agri gold loan Y-o-Y, INR8,000 crores — agriculture portfolio, INR8,000 crores have grown, out of which INR5,000 crores have come from gold loan alone.
Pinaki Banerjee
Okay, sir. Sir, actually my next question is like your corporate loan portfolio for the last five quarters, we’ve seen that it is — as a percentage to your gross advantages have remained static at 38% to 39%, and year-on-year growth is 9%. So sir, have you taken any strategic decision to lower your exposure to the corporate sector?
Nidhu Saxena
So Pinaki, I would like to say that bank will not be missing any emerging opportunities which are available there in the market. Today, we have kept the guidance of RAM versus corporate at 60-40, and plus/minus 2%. So currently, we are looking at sectors — proposals which are coming from the upcoming sectors, the infra, the renewable energy and the like. So there is absolutely no such thought process to not grow the corporate book. Wherever we see opportunities emerging like the PLI sector where the government emphasis is coming, we would definitely want to be present there.
Pinaki Banerjee
Okay. Sir, and just one last question. Regarding your term deposits, which have grown about — by about 19% at INR1,40,000 crores. So actually can you give a breakup of what is the amount of new deposit and what is the renewal deposit percentage?
V. P. Srivastava
You would have [Technical Issues].
Nidhu Saxena
So, we just noted this, Pinaki, and I think we’ll share the number with you. We can go to the next question. We will let — this data, we’ll just work out and let you know.
Pinaki Banerjee
Okay. Fine, sir. That’s all from my end. Thanks and all the best for the future.
Nidhu Saxena
Thank you, Pinaki.
Operator
Thank you. The next question is from the line of Deepak Gupta from SBI Pension Funds. Please go ahead.
Deepak Gupta
Hi, sir. Thank you for taking my question. Sir, my first question is on asset quality. If you could give us some perspective on your SMA book, which has increased, especially SMA 2 book, which has — which have grown by almost about 100% for the quarter on a quarter-on-quarter basis, and your perspective on credit cost and slippages, which remained at similar levels as per last quarter.
Nidhu Saxena
So see, I think the stress in the loan book is well-managed. If you see year-on-year, it was 7.54% and now we are at 5.8%. I’m talking about the total, not SMA 2, but the SMA and total position for the bank. And within which 5.8% what I’ve said, it is few of the state entity accounts, four, five accounts, which had actually moved to the SMF category and INR1,542 crores are in these five accounts. So already, while I’m talking to you, one account, the major one, INR717 crores from that state entity has already moved to the standard category. So if I’m discounting, removing all this, my stress in the overall loan book is 5.09% only.
And as regards to SMA 2, I think, Kandpal [Phonetic], you would like to add.
Unidentified Speaker
In SMA 2, there are only two accounts and nothing major, and all the accounts are below INR60 crore. [Technical Issues] account is around INR58 crores and one is INR32 crores, nothing more — major account of — they are into the SMA 2 book.
Deepak Gupta
I hear you. And sir, any thoughts on your [Indecipherable] in the credit cost? You said at about [Technical Issues]
Operator
Sorry to interrupt, sir. Mr. Gupta, your voice is breaking up in between.
Deepak Gupta
Can you hear me now? Is it better?
Operator
Yes…
Nidhu Saxena
You were talking about credit cost?
Deepak Gupta
Yeah, credit cost and slippages, if you could give us some perspective…
V. P. Srivastava
If you see the credit cost, we are maintaining a net NPA of 0.20%, so almost everything we have to provide in respect of the fresh slippages. So — and if you talk about IRAC — credit cost, the IRAC requirement, then it would be below 0.40%. So that is the credit cost.
Regarding slippage ratio, that you can see that we are able to maintain the slippage in quantum terms roughly around INR600 crore. So that — it will continue in future also, the slippage will be within the range of INR500 crore to INR600 crores.
Deepak Gupta
I hear you.
Operator
Thank you. The next question is from the line of Samraat Jadhav from Prosperity Wealth Advisers. Please go ahead.
Samraat Jadhav
Am I audible?
Operator
Yes, sir. Please go ahead.
Samraat Jadhav
Yeah. Great. Okay. Sir, firstly, congratulate on a good set of numbers. I have two questions. One is on the co-lending book which you have. So what was on the last quarter and how much is for this quarter?
Nidhu Saxena
We have those numbers? Amit?
Amit Srivastava
500 to [Technical Issues]
Nidhu Saxena
See, co-lending is again from among the various segments, we have looked at this growing the co-lending book. And this co-lending has gone up to almost INR2,000 crores we are reaching. And for this, what we have done is we have identified NBFC’s AA and above rated and we have seen how the processes and how the audit system, how the compliances levels are getting maintained. And wherever we have seen our comforts, we have joined hands with them.
Our experience is that we are able to negotiate a good NIM. The entire product is technology-driven in our bank. So for example, one of the NBFC in the gold loan segment, so whatever the NBFC is doing loans today from 10 a.m. till 5 p.m. in their branches, I’m able to underwrite and take the share in my books the next day.
But the entire flow of accounts, the disbursements, the collection, the reconciliation is entirely digitized and we have developed this in-house along with the IT of the concerned NBFC. And that’s how we are seeing that not only this portfolio we are comfortable to grow with, but we are able to manage this also well and see that the issues around reconciliation are well taken care of.
And as I said, I’m finding a very good pricing we are able to negotiate in terms of service. Through this technology, we are able to give a good service, add value in the partnership and I’m able to in return get good pricing. My NIM typically in some arrangements is 5% plus. And these are all a practically [Phonetic] classified business that I’m able to do, like if it is MSME, it is impacting my micro segment.
So there again, I’m able to meet my PSL targets and we have the opportunity to even — wherever we surpass, we can do a PSLC sale and earn additional 1%, 1.5% to 2% going forward. So that’s how the co-lending we are looking at and we are diversifying. Today, we have around six to seven partnerships, and another three to four partnerships are under discussion at various stages and which we’ll be onboarding very soon.
Samraat Jadhav
Okay. So do we have any number that how much this co-lending book would be there at the year end?
Nidhu Saxena
So currently, we have not kept any number as such, but we had been for the last four to five months just in discussions, we had experienced this with one or two good rated NBFCs. We have watched how the portfolio is moving, how the recon, disbursements, collections, everything is working now, having drawn a lot of satisfaction. So now we are actually scaling up.
As I said, six already have been tied up and another three are under discussions. So we have not put any number as such, but yes, we want to grow this co-lending book in a major way in this financial year. And we will see that this entire portfolio is high-yielding portfolio for us and it is well-managed through the technology part of it.
Samraat Jadhav
Great. Okay. My second question is around the number of branches. So we added around nine branches last quarter and majorly was into metro, urban and I think two branches in semi-urban. We had closed some branches in rural also, I think two branches in rural. So is it a part — like you said majorly the — and coming from the gold loan side book, which is again from the rural. So do we have any strategy like closing the non-performing branches or increasing it in a rural or majorly it is from metro or urban side?
Nidhu Saxena
So if you see, we have a robust branch expansion plan. We have in fact gone to our Board and gone with a five-year roadmap as to 1,000 branches is what we have envisaged and Board has approved this plan of our 1,000 branches in the next five years. And we are the — we’ve done — around 600 branches were opened in the last three years. And before going into this new branch opening in a major way, we are also taking stock of how these 600 branches opened are performing and whether there is any learning for us going forward.
So what we are trying to do is trying to identify the centers basis the growth — where the growth potential lies, we would like to be present there and present there in a meaningful manner. So maybe one center if we decide, we feel that it should not be a representation of one, if it could be between four to five. So we have been following some set of branch opening strategy. We are just in the process of relooking that.
But ideally for the next 12 months, we have a 200 branches to 220 branches to be opened as our plan in mind and this first quarter has been more to take stock, take review of what the performance or the desired outcome of the branches opened so far have been to us. And going forward, if required, we will modify our way of identifying the branches if required. Otherwise, this is the plan we have in the next 12 months, around 200 branches to 220 branches that we plan to open.
Samraat Jadhav
Okay. Any plans for international branches? Expansion of international branches?
Nidhu Saxena
So currently, we are mindful of the fact that there is a GIFT City opportunity with us. We have already gone to the Board. We have — Board has approved our proposal and we have submitted our request with the regulator. And we will be in discussion with the regulators and pursuing our case with them to give us the GIFT City license as early as possible. And I think with that, there’ll be a lot of opportunities opening for doing some ECG, ECBs or participating in some global syndications, which are there in our thought process.
And I think with that GIFT City formal application already launched with the regulator, no sooner this approval is granted for opening the outlet, we would be ready with our plan in terms of manpower and going forward the strategy to grow business in the — through GIFT City.
Samraat Jadhav
Great. Thanks.
Operator
Thank you. [Operator Instructions] Our next question is from the line of Jai Mundhra from ICICI Securities. Please go ahead.
Jai Mundhra
Yeah. Hi. Good evening, sir, and thanks for the opportunity. And sir, couple of questions. First is, sir, in your retail loans, you have around INR17,700 crores as others. And if you can share a few heads, I mean, which all products are there and do you have any unsecured personal loan bookings?
Nidhu Saxena
Yeah. As far as these other retails, it includes the loan against properties, then top-up loans, our personal loans and other loans which we are granting to our customers, and in addition to that, the gold loans which are classified under retail gold loans. So these all constitute nearly INR17,000 crores.
Jai Mundhra
How much is the personal loan, sir, unsecured personal loan out of this?
Nidhu Saxena
Gold loan is around INR3,500 crores, personal loan is around INR2,500 crores, and loan against properties are around INR2,000 crores. So almost in all the segments, it is more than INR2,000 crores.
Jai Mundhra
Right. And sir, if you can highlight any asset quality trends in unsecured personal loan book of INR2,500 crores, how has been the slippages or GNPA? Is there any change in the last one, two quarters?
Nidhu Saxena
So if you look at my unsecured personal loans book, it is a — entirely to ETB customers and in — especially wherever we have salary tie-ups. So typically a government department or a corporate whose entire employees are banking and drawing salaries through me, I have done this personal loans and with the salary disbursement, we are able to recover our monthly EMIs and then the remaining portion is made available to the customer to draw from this savings account.
And likewise in the unsecured — with the pensioners also, we have some portfolio built and wherever we have pensions is there — is where we have actually done this unsecured lending. So to say that this personal loan segment put together, this pension and other things, it is INR3,350 crores and only INR15 crores is NPA out of that. So it is — it’s a high-yielding product for me and it is very much in focus.
The concern — I think where you are coming from, Reserve Bank regulator also highlighting this. So absolutely this part, I am completely comfortable and we are having these unsecured loans only where the salary tie-ups or pension payments are through my branches.
Jai Mundhra
Right. No, understood, sir, and thanks for the detail. So you have the GNPA at only INR15 crores, but the slippages — let us say, out of this INR3,300 crore portfolio, the slippages would also be quarterly slippages, I mean in Q1 or Q2. Would it be safe to say that the slippages would be around INR30 crore INR40 crores on a quarterly basis? Or would it be even lower than that?
V. P. Srivastava
It would be on the lower side because as sir told, see, it is backed by the salary. So whatever the salary, first the salary being credited in the account, and from that we are taking the installment. So we have not seen that — we have seen the negligible depart in such portfolio. And we have not given unsecured loan to the non-salaried class. So in our case, it is almost secured portfolio.
Nidhu Saxena
See, INR15 crores also out of that INR3,300 crores book is maybe where because some demise of the employee and there is a process of getting the money from the terminal benefits and terminal benefits are in the process of settlement. So that kind of tie-up arrangements are existing with the organizations who are disbursing salary through our branches and only against that salary disbursement, this kind of loan product is built for them. And mostly are in the government PSUs and central and state PSUs is where we have grown this portfolio.
There is hardly any personal loan segment in the non-salaried. There is no in fact focus — no product for the non-salaried person to be availing a personal — unsecured loan from the bank.
Jai Mundhra
No, I understood. Understood.
V. P. Srivastava
This is hardly 0.05%.
Jai Mundhra
And sir, I missed your comment wherein you mentioned that…
Operator
Mr. Mundhra, if you have any follow-up questions, may we request you rejoin the question queue?
Jai Mundhra
Sure.
Operator
Thank you so much, sir. The next question is from the line of Rohan Mandora from Equirus Securities. Please go ahead.
Rohan Mandora
Good evening, sir. Thanks for the opportunity. Sir, I had a question on the provision that we have taken in the P&L. So we have almost INR580 crore, INR590 crores of NPA provision. And if I look at the net slippages adjusted for recovery and upgrade, that comes to around INR400 crores. And the PCR has not improved. So just wanted to understand the consumption of this provision that have happened.
V. P. Srivastava
So as you know that whatever slippages are happening, we are almost taking 100% provision. And…
Rohan Mandora
Net was around INR400 crores. So at 90% provision, it would have…
V. P. Srivastava
I am coming to that. And there is aging provision also. That you have to take care in the sort of some assets. Overall that if you see the — we have made the provisions accordingly.
Rohan Mandora
Right. But sir, even if you look at — see, absolute slippage was around INR600-odd crores. If you adjust for the recoveries and upgrades, INR220 crores, so you come to around INR400-odd crores of net slippage this quarter, right? On that, if we were to build in 90% PCL that we are maintaining or 98% including technical write-off, then that would be around a similar number INR400 crores. So we are still left around INR200 crores. So just trying to understand where is that getting clarification? Because the technical — and just for technical write-off, the PCR has not improved.
Nidhu Saxena
We will provide you detail in this regard.
Rohan Mandora
Sure, sure. That’s it, sir. Thanks.
Operator
Thank you. The next question is from the line of Ashok Ajmera from Ajcon Global Services Limited. Please go ahead.
Ashok Ajmera
Thank you, finally. Sir, compliment to you, sir, Nidhu, sir, and the entire team of Bank of Maharashtra. And not only for the good set of numbers, but also recently celebrating your 90th Foundation Day where the chief guest is the Finance Minister, Nirmala Sitharaman-ji. She spoke very nice words about the bank. And second complement is for you recently successfully raising INR3,500 crores of equity, which is I think the fourth largest — I mean the largest in the four QIPs which you have done in last five, six years. So my compliments to you, sir.
Having said that, sir, most of the questions have already been answered in this long discussion by the various colleagues. I would have only — I have little rather concern or maybe I need your feedback. On the overall business growth, because if you see at credit growth also, if you don’t annualize it, just look at the current financial year six months, our advances have gone up by only 6.80% and our deposits have gone up by only 2% and six months have gone.
Even though you are comfortable on capital adequacy and you have raised the capital also, but ultimately, the bank needs to grow its business. And as per the past glory of the bank where you used to be 25%-plus, 20%-plus, what is the strategy now going forward? And what do you think your target going to be for the credit and deposits, sir, for the bank?
Nidhu Saxena
So, Ajmera-ji, first of all, thank you for acknowledging whatever you just mentioned about. And if you look at my total business, our guidance for this year is to grow the business at 16% and advances would grow at 18% to 20% and deposits will be growing at 12% to 15%. The first quarter was not very encouraging and that ought to be, but I think a lot of things have started to look up when we entered the Q2.
And today, none of my growth performance is lower than what the guidance we have kept for ourselves. So I think we are on the right path of growth. And going forward, the Q3 and Q4 are only going to be better quarters in terms of banking business. We all know about that. So the overall guidance that we have kept for the full financial year, I see absolutely no concern, no challenge in achieving or even surpassing those.
And we just discussed about the aggressive branch opening strategy. And since this 600-odd branches that have been opened in last three years also are helping in lot of fresh business generation in the bank. And going forward, the 12 months plan of 200 to 220 branches, I’m sure that the pace of growth of business in the bank will only be going up, with this new branch expansion, with bank being present in more and more geographies.
Ashok Ajmera
Sir, I mean with this kind of maintaining the targets for the credit also and deposit also. For credit, if you look at it in order to meet the target of whatever, 18%, 20% or 17%, 18%, you need to disburse the credit of almost about, I think,,INR25,000 crores just in now coming in five, six months now which are left for this financial year. So what is our pipeline of the sanctioned amount as well as the advanced stage of sanctioning so that we can be sure of this INR25,000 crore, INR26,000 crore credit disbursal in the remaining four, five, six months?
V. P. Srivastava
Ajmera-ji, as far as the sanctions are concerned, so far in the first half year itself, we have made sanctions of around INR39,000 crores, of which around INR30,000 crores pertains to corporate credit segment. So disbursal in such projects is based on the various milestones. So they will get disbursed over a period of time. There are certain takeover cases also. So we have that visibility to achieve that growth of around 18%, plus/minus 2% in advances going forward.
Ashok Ajmera
Yes, sir. Point well taken, sir. My last point is, sir, on the digitization on the IT front, where do we stand, sir, after having spent a good amount on IT and I think we are doing it for last — aggressively last 1.5 years, two years? Now what is the status today? At what stage we are in the — our IT total digitization implementation end-to-end products, whether on retail or SMA credits?
Amit Srivastava
Yeah. Thank you, Ajmera. Actually, you have seen last almost three years, we have continued with around INR2,700 crore project in which the utilization was around INR1,900 crores. So — because major of the things we really required the overhaul. So in total, if I am not wrong, around 138 RFPs are floated in last three years area. Now it is across the board, like in the retail side, in the corporate side, in the operations side, in the customer service side, in the efficiency enhancement side and even on the compliance regulation side.
So in all the areas we have done — actually right now, still this year, we are having a budget of around INR1,000 crore, but the pace of that RFPs will not continue to that extent because in all the areas we have floated the RFPs and all the projects are going on. Most of them are completed and it will take six months to nine months’ time to get the result.
So you must be remembering that we created a digital business zone, which is added by a general manager. Now that zone is nearing INR5,000 crore, approximately as on today. So it is between INR4,500 crores to INR4,700 crores. So here, no employee is actually involved in the business and through only digital, they have an entire setup like a physical zone. So they have their marketing team, strategic digital marketing course they have done from IIM Rohtak and Bangalore, and they have a risk management team. So they have the entire team.
Now coming to the point, there are certain very big projects which bank is right now running. The one is the CRM module which bank is running. Second is the lifestyle banking which bank is running. Now somewhere it is 30%, 40% 50%, all those are completed. The next is that entire hardware and software overhaul of the bank. So with this, I think by next six months’ time, the entire — the hardware, all the servers will be a refreshed one in the bank.
Now with that, we are actually to that extent confident that next two to three years, it will be not more so on the capital side, but there will be a recurring expenditure on the IT. So with this INR1,000 crores, which we have taken approval and last Board also our MDs are told. So that is going on.
Coming to the RPA side, earlier we used to tell around 35, 36. Today, I think we are standing, we have 60 is implemented today. And from the Board, we have taken approval of 150. So you can think of that 90 still it is there. Now coming to STPs journey, around 12 to 15 we have already launched, around five are there which are in the CUG state because we — because see, the technology pertaining to the customer side should not be straight away put to production. So what we have done in our bank, you have seen earlier also is a risk mitigation that whenever journey is there moved to production, we first move to some two or three branches, then we move to one or two zones. And then we take stock of the situation for a month or so and then we move to pan-India basis.
So right now, I think the three — four journeys are there, which are under CUG state for last 15 days, 20 days. So you will be seeing all these things which are going to be rolled out in the present quarter and then RPA also around 10 to 15, 20 which the team has planned, they are working upon that. And the hardware, which refreshment is taking place, the entire at DC, infra and our — even the [Indecipherable] our servers. So all those are getting refreshed and I think that will be completed by February ’25.
So this is the right now scene and journeys — I think, next five to six journeys will be launched in this quarter and similarly two, three journeys will be launched in the next quarter. Because March, we don’t keep anything as such, because it is at quarter-end. And one more very important that we build a very good audit software and which is having almost 18 modules, which is going to be rolled out, I think, Phase 1 in this quarter and Phase 2 by the February ’25. So these are the status as on date on the entire IT infra in the bank.
Ashok Ajmera
Thanks, sir, for such an elaborate information on the IT front. Definitely, I have been watching you at that center also, I think, which was — which is created here in Mumbai, that IT, you call it what, as IT. Very, very impressive. Thanks a lot, sir, and all the best to you.
Nidhu Saxena
I think like what you asked about the business growth, they will also be a good contributor going along when more and more journeys are launched. So they will be a good contributor in this total growth.
Ashok Ajmera
No, no. Yes, I am sure that would definitely yield the results there. Only because we compare only a quarter-to-quarter and especially in this year, even up to September quarter, our credit and deposit figures, it’s there in the entire industry. It’s not at only your bank, but I keep Bank of Maharashtra separately in a very, very high esteem and I’m sure that you will definitely meet the target whatever has been given, sir. Thank you, Nidhu, sir, and thank you the team, Asheesh, sir, and Rishi, sir. Thank you.
Nidhu Saxena
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Bhumika Jain from Desvelado Advisory. Please go ahead.
Bhumika Jain
Hello, sir. Congratulations on a good set of numbers. My first question was the cash flow from operating activities show the benefit movement across around the INR14,000 crores in the — in this first quarter — sorry, in the first half of this year compared to the positive INR14,000 crores in the past first half of the FY ’24, which was basically driven by the bank provision. So my question is, how does management plan to manage the liquidity in the coming quarters, especially considering the online — ongoing bond issuances and rising interest rate and borrowing?
V. P. Srivastava
You are talking about liquidity management?
Nidhu Saxena
LCM.
Bhumika Jain
Yes, on liquidity.
V. P. Srivastava
Your voice is not clear.
Nidhu Saxena
Madam, it was not clear. Can you please just explain…
V. P. Srivastava
Bhumika, if we talk about the LCR is what you were looking for?
Bhumika Jain
Sir, my questions is on the liquidity part. Yes, sir.
Nidhu Saxena
With the bank or with the…
V. P. Srivastava
Okay. So liquidity that — if you are talking about the cash flow, hello?
Bhumika Jain
Yes, sir.
V. P. Srivastava
Yeah. So in respect of the liquidity that we are quite comfortable. And if you see that we are having the sizable investment portfolio and most of the — related to SLR securities and recently that we have raised the INR3,500 crore equity capital as well as the infrastructure on [Phonetic] the INR811 crore. And that INR1,000 crore we have raised. Apart from that, there is a deposit growth to fund the advances.
So from the liquidity plan to further growth, there would not be any problem. And we…
Nidhu Saxena
I think what she is asking, that is from our statement — madam Bhumika, if I’m correct is…
Bhumika Jain
Yes, sir.
Nidhu Saxena
CRR we are having, SLR we are having. So around I think INR20,000 crores, INR25,000 crores, total INR40,000 crores we are [Technical Issues]. So I think your question is from that.
Bhumika Jain
Sir, my question is also that we are — operating expenses are more than that the return that we are getting.
Nidhu Saxena
Ultimately, it will convert into two things, madam. So there is no excess LCR we are carrying. Second, neither we are having whatsoever — there is neither a surplus which we are deploying as a repo or maybe we are borrowing, number two. Number three is that if you take — because it will straight away conversion to CD ratio. So when CD ratio is around 78% level, so that also shows that it is very well measured, not the aggressive side and not the lower side.
Bhumika Jain
Okay, sir. Okay. Also, there is one more question that bank has comparatively smaller national market share, that is 1.2% as compared to other state banks because it is mainly concentrated mostly in the [Indecipherable] in India. So do you think that there is less pricing power as compared with other banks? Because it can apparently make banks to increase its risk appetite to protect its margins and profits.
Nidhu Saxena
So if you have mentioned about the market share that we are commanding is that you wanted to know about? And in terms of growth, how we want to go forward, is that your question?
Bhumika Jain
Sorry, sir, you were not clear.
Nidhu Saxena
Okay. I was trying to understand, Bhumika, exactly what you would like to ask us, whether it is the — whether it is the growth you are trying to figure out, how we are planning to grow our market share in…
Bhumika Jain
No, sir, I want to know the risk appetite for the company because it has a lower market share in the market as compared to the other state banks because it is mostly considered within Maharashtra. So…
Nidhu Saxena
Okay. Got it. So I will try to answer that. First of all, some misconceptions around that. We are not predominantly in Maharashtra. I think our 50% — more than 50% presence is outside Maharashtra. If you ask me, last three years, the new branch opening has all been outside Maharashtra. And going forward, we have planned, as I mentioned just now of 1,000 branches, so I think the entire expansion is outside Maharashtra, not because Maharashtra is not important. Maharashtra is the state which is almost 27% contribution to the nation’s GDP, but I am more than adequately represented here.
And if at all there is a center new upcoming, I will definitely want to open my outlet within Maharashtra also. But currently, as the situation is, we have our adequate presence within this state and we are trying to identify and explore in areas where more emphasis is coming from the central government in terms of outlays to those states going forward or new growth centers that are coming up or potential centers where we are currently not present.
So broadly around these two, three areas, we are deciding to expand our reach. And this expansion — geographical expansion, currently is being envisaged all outside Maharashtra.
Bhumika Jain
Okay. Okay, sir.
Nidhu Saxena
And we are not averse to looking at growth opportunities wherever, in whichever sector, whether it is a RAM, which currently is seeing a robust growth in the industry and whenever in the corporate cycle we see uptake, we will definitely want to participate in any of those opportunities that are coming.
V. P. Srivastava
But regarding your question, cash flow, the surplus was there. In 31st March, there was a cash [Technical Issues] in the form of the RBI balances and that we have given to operating assets, mainly to advances to increase our interest income. So that’s why there was a decrease in the overall cash surplus as compared to 31st March.
Bhumika Jain
Okay. Okay, sir. Thank you.
Operator
Thank you. The next follow-up question is from the line of Jai Mundhra from ICICI Securities. Please go ahead.
Jai Mundhra
Sir, hi, in your opening remarks, sir, I think you mentioned that you have managed to upgrade or resolve INR700 crores stress. What was that, sir? You can elaborate?
Nidhu Saxena
Okay. So see there are exposures in some state entities and one of the accounts may move from standard to SMA 0 and that is why the SMA was 5.8%. But if I exclude those one-off — one or two accounts, which are state entities and for some technical reasons moved to standard to SMA 0, that was the number I just mentioned. That INR717 crores, I may not like to name the account, but it has moved to the standard category. So otherwise, my stress — overall stress in the loan book stands at 5.09%.
Jai Mundhra
Yes. Sir, this 5.09% is excluding the INR700 crore exposure, or this is including INR700 crores?
Nidhu Saxena
No, this is excluding — today when we are talking this account has already moved back to the standard category. It is only that as of 30th September, this account appeared in the SMA 0 category.
V. P. Srivastava
And this is why the entire SMA book — SMA 0, 1 and 2. Yeah. But if you look at SMA above INR5 crores, SMA 1 and 2 above INR5 crores, then that figure is 0.19%.
Jai Mundhra
Understood. So this was — because this must have been large corporate exposure only, right? I mean that is fair to assume, but which has now become SMA 0 for standard only. It has become perfectly standard?
Nidhu Saxena
It is a standard, but it is out of SMA.
Jai Mundhra
Right, right, sir. Okay.
Nidhu Saxena
[Technical Issues]
Jai Mundhra
Right, sir. And sir, there were media reports, of course, it looks like we don’t have exposure to MTNL and RINL, but fair to say, I mean we — there have been media reports suggesting that these two accounts may be downgraded or would have been downgraded, but we don’t have any exposure to those two, right? Is it fair to conclude that?
Nidhu Saxena
You’re right. We have no exposure to the two accounts.
Jai Mundhra
Right. And sir, on recovery pipeline, right, sir, I mean, this quarter you have — you continue — your recovery remains more or less similar, recovery from PWO is episodic. But how do you see recovery pipeline? I mean, are there any large cases where you have an exposure and which are seeing higher chances of recovery over the next six months?
Nidhu Saxena
So typically, we are doing fairly well in the recovery. In fact, in the last quarter, we did a mega auction drive, e-auction drive, wherein we could resolve almost 1,000 accounts and these are the smaller category accounts and around INR300 crores were recovered in a drive which was for 45 days. So there is a complete focus on recovery. I can tell you that around INR4,000 crores is my gross NPA book and we have also with us INR21,000 crores of a write-off book within which the NCLT is almost INR8,800 crores. And with — out of INR8,800 crores, INR5,100 crores is already where the resolution has come, whether a liquidation order has come to me or the RA has been declared under NCLT as a successful bidder.
So this INR5,000 crores of NCLT, which have resolved, I sense that whatever be the rate of recovery, maybe if it is 30%, 35% is what we typically see as recovery. So this INR1,500 crores from the NCLT book itself is somewhat recoverable within this financial year itself.
Jai Mundhra
Understood. Okay. Yeah, that is all from my side, sir. Thank you.
Operator
Thank you. The next question is from the line of Sneha Ganatra from Star Union. Please go ahead. Ms. Ganatra, your line is unmuted. Please proceed with your question.
Sneha Ganatra
Sir, any capex driven story — any capex driven loan book growth are you expecting?
Nidhu Saxena
Can you please come back, Sneha? We could not hear properly.
Sneha Ganatra
Yeah. On the corporate side, are you seeing any capex driven loan book growth which we are expecting?
Nidhu Saxena
Okay. So if you are asking about the private capex cycle, that issue which has been discussed quite often and only estimated to be happening. Yet I think that private capex cycle in real term is not yet visible, but we are seeing some green shoots are there. In some sectors, things are only moving up, traction is visible. Even in our limits, the sanction limits, we are seeing that utilizations have gone up and — which probably are indicators that going forward, there’ll be some project funding requirements emerging when the private sector is able to look at new demand and then they would like to go for expansion.
So — but I think, in my view, another one or two quarters, we’ll have to actually wait and see that complete traction coming from the private capex.
V. P. Srivastava
Large capex is not happening, but if you see there is a good growth in MSME advances. And what is happening is that the large corporate, except they are not increasing the capex through MSME customer, they are increasing the capex. Lot of outsourcing activities are happening in the large corporates. And we are taking — that’s why you can see that our MSME growth is above 20%.
Sneha Ganatra
Okay. My second question is on the treasury income. Any thought on the treasury income [Technical Issues]
Operator
Sorry to interrupt. Ms. Ganatra, you’re sounding a bit muffled.
Sneha Ganatra
Second question is on the treasury income. Just wanted to know your thoughts. Going ahead, we have seen that interest rate cut cycle would be panning out for the upcoming quarters. So how do you address the increase in the treasury income when you are panning out for [Technical Issues]?
V. P. Srivastava
Yeah. So if the further interests are softening — still we are at appreciation and if the further interest rate softening, then we will be able to incur that opportunity. But having said that, we want to make a trade-off between trading income as well as yield. So we will continue to protect the yield and we will also eye the trading profit at the time of softening of yield.
Sneha Ganatra
Okay. And regarding you mentioned that additional branches are planning to expand of 1,000 branches over the next few years. So any additional opex requirement could be there? And how do you see your overall cost-to-income ratio to be panning out?
Nidhu Saxena
So cost-to-income, if you see my guidance is to be maintaining it below 40%, and currently we have cost-to-income of 38.8%. So yes, we do realize that with new branch opening, there’ll be some operational costs which will go up. But what — our sense is when we are going to be operating in the growth centers, very soon we can see that, that particular branch is actually contributing to the top line and bottom line of the bank also.
So any cost increase and correspondingly, if we are able to generate more revenues and as a result, more income for the bank is something desirable. We don’t want to limit ourselves in increasing that extra cost. But currently 38.8% and that’s why my guidance is to maintain it below 40%.
Sneha Ganatra
Okay. And sir, last question regarding your [Technical Issues]. Any early signs or anything we would be watchful on the — basically on the asset quality in any of the sector or the segment?
Nidhu Saxena
So currently, as was just shared, our stress in the loan book is well managed. We have proper systems in place to closely monitor the various portfolios. I don’t see all my — whether corporate book or other loan books, they are behaving fine. There is no incipient or step that we are able to look at. I think overall, there is no immediate sign of concern. We have also been looking at our underwriting — benchmark underwriting standards. For some time, we have strengthened our standards and we are seeing that we are onboarding the quality assets and the loan book that is getting created is also of higher quality.
So with this high growth rate, I’m also able to maintain that kind of strict underwriting benchmarks that we don’t underwrite a loan below certain threshold in terms of the quality of the asset.
Sneha Ganatra
And sir, last question. [Speech Overlap] Hello?
Operator
Ms. Ganatra, I’m really sorry. Due to time constraint, we won’t be able to take any further questions.
Sneha Ganatra
Okay. Thank you.
Operator
So ladies and gentlemen, I would now like to hand the conference over to the management for closing comments.
Nidhu Saxena
So I think thank you so much. You have been supporting us. And you have seen that the bank has been performance, which is a consistent one for last 15 to 16 quarters. We keep tracking our performance vis-a-vis the other players within the PSB space and also in the industry and we find that we do lead in many of the parameters. And going forward, while we will be looking at growing our top lines, but we’ll always remain mindful of how that growth in the top line is going to impact and whether it is going to impact favorably the bottom lines and all these parameters where we currently are leading in the industry, we would like to see that not a single parameter, we should be dipping in terms of future going — in our performance.
Thank you for joining this conference.
Operator
[Operator Closing Remarks]