BANDHAN BANK LTD (BANDHAN) Q4 FY22 Earnings Concall Transcript

BANDHAN BANK LTD (NSE: BANDHAN) Q4 FY22 Earnings Concall dated May. 13, 2022

Corporate Participants:

Hiren Shashikant Shah — Head of Investor Relations

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Sunil Samdani — Chief Financial Officer

Analysts:

Kunal Shah — ICICI Securities — Analyst

Saurabh Kumar — JP Morgan — Analyst

Rahul Jain — Goldman Sachs — Analyst

Karthik Chellappa — Buena Vista Fund Management — Analyst

Roshan Chutkey — ICICI Prudential Mutual Fund — Analyst

Adarsh Parasrampuria — CLSA — Analyst

Kashyap Jhaveri — Emkay Investment Managers — Analyst

Param Subramanian — Macquarie — Analyst

Abhishek Murarka — HSBC — Analyst

Rahul Picha — Multi-Act Equity — Analyst 

Presentation:

Operator

Ladies and gentlemen. Good day, and welcome to Q4 FY22 earnings conference call of Bandhan Bank Limited. 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. I now hand the conference over to Mr. Hiren Shashikant Shah. Thank you, and over to you, sir.

Hiren Shashikant Shah — Head of Investor Relations

Thank you, Margaret. Good evening, everyone, and thanks for joining this call. It’s our pleasure to welcome you all to discuss Bandhan Bank’s business and financial performance for the quarter ending March 2022. We will take this opportunity to update you on the recent developments in the industry and Bandhan Bank during this quarter. To discuss all this in detail. I’ve got with me our Founder, Managing Director, and CEO, Mr. Chandra Shekhar Ghosh; our Chief Financial Officer, Mr. Sunil Samdani; Head Asset Mr. Kamal Batra; Housing Finance Head, Mr. Suresh Iyer and myself Hiren Shah, Head of Investor Relations.

Now I would like to request our Founder, MD, and CEO, Mr. Chandra Shekhar Ghosh to brief you all about banks operational and financial performance along with development for the quarter ending March ’22. Over to you, sir.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Good evening to all of my friends. Thank you for your time to join this call. I already said in earlier the fear of pandemic is over. The third wave has been much milder. Thus it has not interested [Phonetic] to my any other confidence. Our result of quarter four financial year 2022 also clearly reflects all of this trend. Quarter four of any, is the most active period for the banking industry, and financial year, ’21 and ’22 was no different from that. I have been meeting my customers at the ground level and the signs of revival are for all to see. Credit demand is back. Many of our customers who had postponed their loans have taken fresh credit from us in the quarter. Let me start with a broad overview of the year.

We reached the milestone of around 1 lakh crore advances in the quarter gone by. Advances stood at it INR99,338 crores which is year-on-year basis, of the growth 14%. Deposit growth has come 24%, which is amounted INR96,331 crores. CASA maintained at a 42% and retail deposits 77%. Net interest income has been growing 42.6% from the preceding quarter 3,500 [Phonetic]. Operating profit growing 53.5% from the preceding quarter, which is the highest growth in the bank life. The Bank reported net profit for this quarter is INR1,902 crores. NIM has increased 190 basis point higher from the preceding quarter. Last two financial years the bank provided its resilience yet again. We are now well on the revival path and the operating environment as well as the ongoing reality is in favor of strong resurgence of business in future.

Now let me drive deeper into the few key aspects of this — the success of this the parameters. The first point is the collection efficiency. [Technical Issues] collection efficiency has come in the quarter which is called a double March [Phonetic] ’22 has come 99%. Collection efficiency in the month of March in EEB has come to 99% which is increased from the 97% of the last quarter, excluding NPA and areas. This means the collection efficiency has come is normal. Collection efficiency in West Bengal also is 99% and Assam is 1% lower, which is 98% and total India is the 99%. [Technical Issues] the another part, 89% of my NPA customers are paying in the March 2022, 59% restricted customer are in March ’22. The improvement in collection efficiency is a thanks to our customer, going back to their livelihood in full swing and the commitment that the customers have towards the bank. The improvement in collection efficiency has resulted in lowering our NPA. The Bank gross NPA stands now 6.46% which shows that the 4.35% lower than the last quarter. Net NPA has reached 1.66%. DPD across the [Indecipherable] microcredit because of the large portfolio, which has come nearly half of that — half from the last quarter.

EEB the Emerging Entrepreneur Business has three verticals. One is group-based lending which is — which we call micro-credit. Another vertical called the small business and agri loan, which are we called individual which is graduated from microcredit to individual. And another vertical we say that the micro home loan which are also individual loans and some another one we have, which is the 2-wheeler loan. The EEB saw its robust growth in this quarter. As expected, because the portfolio has come, growth in the last quarter of every year.

In financial year ’22, they are added 23.82 lakhs new customers, in financial year ’22 disbursement in the [Technical Issues] where it is, they are raised on that INR22,968 crores, which is a 50% — 15% higher than the pre-pandemic year’s last quarter, which is 2020. So that means this shows that the business has come to this normality. The bank has a policy and the strategic policy the migrated or graduate, the Group loan to the individual as on March 2022 bank migrated 24.32% of the group loan to the individual loan. Come to this, the next, the growth vertical, which is the housing loan we have two and half years ago we have merged this vertical from the group, and last quarter it has come very good growth, but this year they are given us very tremendous growth. Portfolio grown 11% year-on-year, portfolio stands now at INR23,726 crores. CAGR in the last two years has been healthy 9.29% despite the challenge is superior to our policy. In ’19 — financial year 2022 the total disbursements have done this vertical INR4,340 crores, both of 105% over the previous year, and 95% from the last quarter.

In quarter four, 86% of housing and 13% are left. And this housing loan portfolio 61% salary-based, 39% self-employed. Portfolio quality continues in the same good. Next point is that this loan ticket size also increased from the previous year by nearly INR110,000 speaker site coming to our next to vertical another vertical is in commercial banking. So commercial banking have been grown 60.8% year-on-year, and quarter-on-quarter had been grown 40% is the portfolio INR11,720 crores. The retail credit other than housing loan, our gold loan, personal loan, two-wheeler, and auto loan together this extends this portfolio INR1,645 crores, which is the growth has come yearly 39%. This and the total performance has come from the business point of view. I’m coming now the strategy of the bank. We are decided that 2020, we’ll will be prepared — we have been preparing a five years plan, which has the ’21 to ’25. And during this period two years we have been seeing that there is a pandemic situation has come business growth is not coming as normal. For that reason, the last February, we have again revised our plan and we’ll find out on that we can reach that plan with another one year. Instead of 2025 it will be reached 2026. Major other couple of points strategically, we are decided which of the track that we like to mention.

The bank had the strategic first point, how we can be like to strategically diversify the micro finance loans with the other portfolio. So group loans which one is the last year is 60% hasn’t come down 47% in the [Indecipherable]. Housing loan has increased from 23 and 24 [Phonetic] and the commercial banking has increased from 16% to 28% including individual loan, which has graduated from group loan. And retail loan 1.3% of the total portfolio to 1.6% of the portfolio. So we’d like to continue in this way to graduate and also expand with the other business and accordingly by 2025, we can be reached to micro credit portfolio, which is called the group loan 26% from today 47%. We are diversifying geographically. Bank has on that the geographically expand the branches across the country, other than east. This year we are also decided 530 branchs will open, which is 80% above will be other then east. That also helped us to diversify the book.

You know that housing loan vertical, we are already working on that, the West and South. We are also expanding more of those branches in South and North, which also helped us to geographically diversification of the portfolio. Third point, banker focusing on the retail business more, not as a corporate business. So retail business, more or less other than housing because of microcredit is the unsecured loan is more. So Bank has decided on that how we can be like to strategically balanced the secured and unsecured loan. So as of today is in unsecured loan is in 39% so bank as by ’25, it can be 46% of the liquid loan and a 54% is in unsecured loan and ’26, we can be like to reach on that 50-50 secured and unsecured loan. Bank had been opened in this year, 629 new branches names in the last year.

Next point on that bank card or as per earlier I mentioned also we are investing for the transformation of IT system including CBS and also we are developing in the digital banking. Focusing on that, how we can provide the digital in the rural and semi-urban people with all respect of liabilities and assets so that we are, we are primarily we are working on that. All of our loan including microcredit we’ll process, sanction, and disperse [Phonetic] system digitally and, but the customer is possible, they are like to repay the installment by digital there would be like to give also digital. And finally graduation from the micro group to the individual that is also separately, we are like to develop time to time. So this is, overall, all these, the performance has come because our bank team are working very good and they are very much committed customer intention to return back the money is very good. Altogether, I hope that they are coming to normal and next a couple of business will be also come to normal. Thank you to all of you I pass on this next clarification to our CFO, Sunil Samdani. Then we will would like to go to question-answer. Thank you. Sunil.

Sunil Samdani — Chief Financial Officer

Thank you, sir. Good evening, everyone. I just want to take five minutes of yours to run through a couple of slides, which I think is important. First, starting with the DPD status of our EBITDA, which we’ve been tracking and monitoring ever since the pandemic, we are glad to say that we have come close very closely to the pre-pandemic levels in terms of [Indecipherable]. Our one plus 30-day [Phonetic] DPD, it used to be 5.3% — which was 5.3% in December ’21 has come down to 3% in March of 2022. The 31 to 60-day DPD from 2% to 1.6%, 61 to 90-day DPD from 2.9% to 1.9% and NPA from 13.7% to 7.8% [Technical Issues] to 7.8% in [Technical Issues] vertical. What is important here is when we saw the turnaround in the third quarter, we saw the early delinquency buckets showed the bigger improvement and in the fourth quarter, we are seeing that improvement across all buckets, whether it’s 0 to 30 days, 31 to 60, 61 to 90 for the NPA bucket. So that’s happening and that gives us the confidence for the future is good. The other slide that I want to run through is the Slide number 8 of our presentation, which talks about the tool and the coverage that we have against the stress.

In December, 21 we had INR170 billion of stress pool and we had estimated that we could recover in the quarters about INR50 billion, in addition to the provisions, and the CGF MUV recovery. We are glad to inform you that we have reached this INR50 billion recovery instead of two quarters in one quarter itself. So that again is good sign and it gave confidence that our customers’ businesses back to normalcy. And the coverage that we estimate it as on March ’22 that stress pool, which was INR170 billion has come down to INR119 billion and against that we used to have a 54% coverage by way of provision. It has gone up 58.5% as of March 2022. The estimated recovery though we have done phenomenally in the Q4 conservatively we are budgeting for INR30 billion for the next two quarters. The CGF MUV recovery remains constant and as always, we don’t want to put a guess on what will be the quantum of Assam relief fund, but what is important here is despite not contributing Assam, we feel that we have enough coverage to cover our entire stress pool.

So these are the two important points that I wanted to mention here, happy to take questions. Thank you very much.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen, we will wait for a moment, while the question queue assembles. The first question is from the line of Kunal Shah from ICICI Securities, please go ahead.

Kunal Shah — ICICI Securities — Analyst

Yeah. Congratulations for good set of numbers. So firstly you had highlighted that with respect to this credit guarantee we’ll start applying from 1st April. So if you can just let us know in terms of what is the status and this entire CV as in the recovery of INR2,500 crores, or when do we expect it to come clear?

Sunil Samdani — Chief Financial Officer

To come in this financial year because we interacted and engaged with the CGFMU. So the process that they have is the institutions can claim only once a year. So with that being the case, this should come in two installments. First, the 50% of this close to 50% around INR1200 crores in this financial year, and the balance in the next financial year.

Kunal Shah — ICICI Securities — Analyst

[Indecipherable] but we have not started, so in terms of like we will do it towards the end of the fiscal or when should we expect this INR1200 odd crores to come in this particular year. Sorry, I missed the earlier part yeah.

Sunil Samdani — Chief Financial Officer

So this year as I said, we can do it once a year. So we should do it by the end of this quarter and we should expect in the first half this entire money to come in, the 50% piece of it.

Kunal Shah — ICICI Securities — Analyst

Okay. Okay. Sure. And secondly, when we look at it, overall, the growth was primarily coming in from the bulk deposits retail was more or less flat and how was flat end not that much of a growth relative to the loan book growth. So how should we look at the overall deposit mobilization given the rising interest rate scenario and what would be our stance in terms of interest rates over a period?

Sunil Samdani — Chief Financial Officer

So clearly, we are not worried about the deposits. The growth that you see in the bulk deposits is largely to do with the seasonality, you will always see Q4 the bulk ratio at the highest level, because our advances grew at a much faster pace than the pace at which retail deposits can grow and that is one of the reasons the other reason is, if you see our rates today, we are as competitive as any other bank, on the deposit rate side. And typically the first quarter is relatively muted vis-a-vis the Q4 of the previous year. So we are confident on our deposits. Interest rates clearly should not think — it is a market-driven factor. We have — if deposit cost goes up the lending rates also goes up. In fact, on the fixed-rate loan, which is largely micro finance for us. We have already taken an increase of almost 150 basis point last September. So the benefit of the — full benefit of that should accrue in this financial year. And the risk portfolio is anyway linked to the variable-rate loans. So we don’t see a challenge there. One, on the deposit mobilization side and two pricing, pricing, our deposits competitively in line with the market.

Kunal Shah — ICICI Securities — Analyst

And now with many of the MFI, they are raising rates given that [Indecipherable] check is not there. So does that also provide us with more flexibility and we were much lower than that, but still would that provide the flexibility and would we also have a to increase it a little bit on our pricing on deposits, how would retain that funds?

Sunil Samdani — Chief Financial Officer

So clearly it will depend on our deposits, our funds and our credit costs. So with credit cost stabilizing factor here is only the cost of deposits today. Depending upon how that moves, we will take that decision.

Kunal Shah — ICICI Securities — Analyst

Sure, sure. Thanks. Thanks a lot and all the best.

Sunil Samdani — Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Saurabh Kumar from JP Morgan. Please go ahead.

Saurabh Kumar — JP Morgan — Analyst

Actually. So on your point of INR5,000 crores of recovery for the quarter, if you see the stress book is down by about INR5100 crores from INR170 to INR119 and there is a write-off of 20 [Phonetic] so shown the recovery INR30 billion for the quarter.

Sunil Samdani — Chief Financial Officer

Comparing like to like, right, when we are comparing 170 [Phonetic] as of December there as well we had INR12 billion write-off and post that it was INR117 comparing like to like and then any which ways if there is a write-off, it has a corresponding effect on my provisioning and the provisioning balance also comes down — my PCR. So if we look at holistically whether the provisioning coverage the PCR ratio the credit cost and the coverage on the whole, it is a positive move.

Saurabh Kumar — JP Morgan — Analyst

No, no, it is a positive, I’m just trying to understand the collection from this EV would have been 30 instead of 50?

Sunil Samdani — Chief Financial Officer

Yes.

Saurabh Kumar — JP Morgan — Analyst

Okay, understood, understood. Okay. The second one is sir. I mean, on this provisioning, you could have chosen to make some more standard asset provision during the quarter. So what is your view on the buffer, which we want to keep?

Sunil Samdani — Chief Financial Officer

So if you see during the quarter, we have taken additional set provisioning, because if you look at our NPAs, they have come down substantially. So if you have not taken the additional standard asset provisioning there would have been a negative credit cost in the quarter. So we have buffered our balance sheet. Ratios across have improved whether we call it PCR or we call it coverage against the stress pool whichever way we look at it. So that is absolutely what we look at and we have taken the adequate provision.

Saurabh Kumar — JP Morgan — Analyst

Okay, and lastly from a next-year perspective, I mean your historical normalized number used to be 1.7, 1.8. So how should we think about which now product that number going ahead. How should we think about normalized provision so on?

Sunil Samdani — Chief Financial Officer

So we had given that guidance even in the earlier quarters that on a steady state basis. We look at 200 to 225 basis points of about 2% to 2.5%. Typically what we say is 2% plus or minus 25 basis points as these regular credit costs going forward. And having said that we would continue to add buffers depending upon so that that can add to that. On the whole buffer, it could be slightly high.

Saurabh Kumar — JP Morgan — Analyst

Got it. And just one last question, sir. What is the PSLC income for the full year?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

For the full year PSLC was INR658 crores.

Saurabh Kumar — JP Morgan — Analyst

Got it. Thank you.

Sunil Samdani — Chief Financial Officer

Thank you.

Operator

Thank you. Thank you. The next question is from the line of Rahul Jain from Goldman Sachs. Please go ahead.

Rahul Jain — Goldman Sachs — Analyst

Yeah, hi. Hi. Sunil. Hi sir. Just a couple of questions. First on — hi, first on the slippages during the quarter. So the math suggests that it was about INR1900 odd crores is that a correct number?

Sunil Samdani — Chief Financial Officer

No, if you look at bank as a whole, the gross slippages number is INR1365 crores of which the EEB gross slippages is INR1181 crores. The gross recovery and upgrades is INR2,395 crores and in the EEB recovery and upgrades is INR2,204 crores.

Rahul Jain — Goldman Sachs — Analyst

Got it. And just on the slippages bit generally through the year, the individual book which where you sort of increasingly focus how the asset quality trends are playing out there? Can you give us some sense?

Sunil Samdani — Chief Financial Officer

So individual book clearly is much better than the group loans. So there the asset quality is much lower than the guided credit costs that we are doing, it is much impact, half of it. There, we don’t see an NPA beyond one and one and half.

Rahul Jain — Goldman Sachs — Analyst

You mean NPA or the loan losses? The NPAs. Okay.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Rahul quality of the individual loans because of the very [Indecipherable] customer from the group and they are very, very good, better than the group.

Rahul Jain — Goldman Sachs — Analyst

Understood, sir. And sir, if you look at the total EV portfolio what percentage or time can potentially move to individual and when you look at the bases, the new RBI norms on MFI what percentage of the book will be comfortable with INR1 lakh of ticket size assuming 50% the loan-to-income ratio?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

You know that process-wise we are started two years before graduated from the group or individual because there family income has been increasing. And we assess the family income two years before we check the status from the credit bureau not only microfinance, non-microfinance which is now RBI has come for [Indecipherable] introduced it. So practice point of view, we are on the very speedway, we are making on that and we need it is needed on that because if I go to this, the lending to these people, I should also see that they not only women and also the husband check will be met. So that is a good way to grow the last mile connectivity by the industry and Bandhan is also the part of that to grow it.

Second point on that because the income level now RBI had been suggested, but two years before we are, we have talked to all of you on that. How long I can — we say that this customer will be the microcredit customers? Is it 20 years, 10 years if they have not income increase so I can then I have been not contribute anything in their life. So if their income increases, why not they will be graduate to the MSME. They will graduate to the agri business, they will come back on that. For that reason, we are starting it now. If you see that 24% of odd [Phonetic] group loan converted in individual loan which is last two years, but naturally last two quarters. So I hope that it will be like to make it gradually in this way, 50%. We can, we like to make another two years.

Rahul Jain — Goldman Sachs — Analyst

That’s helpful, sir. Sunil one of the last questions, the previous question from Sohrab on the standard asset provision, you said you’ve taken it in this quarter, can you quantify what that number is and next year, fiscal ’23 do you plan to build anything over and above this 200 basis point of guided credit cost that you have given?

Sunil Samdani — Chief Financial Officer

I will give you the exact number just during the call.

Rahul Jain — Goldman Sachs — Analyst

Sure. And then just, just one last bit in terms of diversification…

Sunil Samdani — Chief Financial Officer

It is about INR225 crores, sorry, I just got that number, it’s about INR225 crores.

Rahul Jain — Goldman Sachs — Analyst

Okay. That’s the standard asset provision that you’ve taken in the…

Sunil Samdani — Chief Financial Officer

Traditional over and above required.

Rahul Jain — Goldman Sachs — Analyst

Okay. And just last bit on diversification point which sir talked about, of the MFI book individual plus non-individual can we get the latest figures of East and the bifurcation between East, West, South, et cetera?

Sunil Samdani — Chief Financial Officer

So this, you want to know for EEB or the bank as a whole.

Rahul Jain — Goldman Sachs — Analyst

EEB?

Sunil Samdani — Chief Financial Officer

So West Bengal if I have to give you the top three states. Right, my total EEB book is INR62,400 crores. West Bengal is INR25,315, Assam is INR5,812, Bihar is third at INR6957 and UP is close at INR5320.

Rahul Jain — Goldman Sachs — Analyst

Thank you so much and wish you all good luck.

Sunil Samdani — Chief Financial Officer

Thank you.

Rahul Jain — Goldman Sachs — Analyst

Thank you, [Operator Instructions] The next question is from the line of Karthik Chellappa from Buena Vista Fund Management. Please go ahead.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Yeah. Thank you very much for the opportunity sir, and congrats on the great quarter. So to confirm, some numbers that you gave, so you said INR13.6 or INR1,365 crore is the gross slippages and upgrade is INR2,395 crores, right?

Sunil Samdani — Chief Financial Officer

Yes. And this does not include write-off. These are upgrades and recoveries.

Karthik Chellappa — Buena Vista Fund Management — Analyst

So, the net reduction so about a thousand odd crore,s, and the right technical write-off separately is about another INR2000, right.

Sunil Samdani — Chief Financial Officer

Yes. And that’s [Indecipherable] Yes.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. And on the EEB book of INR66,000 crore, how much is West Bengal?

Sunil Samdani — Chief Financial Officer

We just discuss that number. So the total EEB book post write-off is INR62,400 [Phonetic] of which West Bengal is INR25,305.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. Just two questions from my side. The first one is for FY23 what is the kind of loan growth that you’re expecting for the bank and specifically if you could talk about the group loan and the housing loan. What is the kind of loan growth you’re expecting for the bank as well as these two segments?

Sunil Samdani — Chief Financial Officer

So we are looking at 20% to 25% at a bank-level and housing is also expected to grow in fact our internal target is to grow faster in the overall bank [Indecipherable].

Karthik Chellappa — Buena Vista Fund Management — Analyst

And the Group micro?

Sunil Samdani — Chief Financial Officer

So that put together we’ll be, growing in line with the pan bank average.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay, got it. And my last question is, can I get the restructured book for the housing segment. And what was the yield for the housing segment this quarter. Excluding the IVPC book?

Sunil Samdani — Chief Financial Officer

Okay. Got it. And my last question is can I get the restructured book for housing segment and what was the yield for the housing segment this quarter excluding the IDPC book? [Technical Issues] It’s about almost 10%, 9.99%, 10% the yield on housing.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. And this excludes the IBPCs this one, right, because that is a much lower yield.

Sunil Samdani — Chief Financial Officer

Yes.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. And the restructure book from housing?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

So excluding the book, which has come out of restructuring it now stands at INR528 crores. So there is about INR475 crores, where the restructuring. In fact, if we talked today everything is out of moratorium, but as of 31st March, INR528 was still in moratorium, while INR475 came out 6 months back. So as of today, everything is out from moratorium or restructure.

Karthik Chellappa — Buena Vista Fund Management — Analyst

By that we mean it’s still part of the restructured book, but they have to start paying. The payment moratorium has expired. But it’s still like restructured, right.

Sunil Samdani — Chief Financial Officer

Yeah, because that’s the regulatory requirement but once you do a restructured loan till the time the loan remains in your book has to be classified as restructured standard or otherwise, if the classification changes.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Excellent. Just one clarification Sunil to a comment that you made earlier. So on the micro book, you said you have taken about 150 basis points of hike and the housing book is anyway on floating rate. So your underlying observation is that even if rates were to rise on the funding side, you should be able to hold on to your NIMs. All other things being equal, right.

Sunil Samdani — Chief Financial Officer

No. Microfinance is a fixed rate. Yes. So we should be able to maintain our NIMs but that depends on which NIMs are you looking at, right because Q4 because of the big recovery that we see on the NPA pool it is higher, but yes, if you look on the full year, we should be better than that.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay, got it. And as far as the inflation impact on your micro borrowers is concerned, especially in the non-agri segment, is there anything that you wish to highlight at least from the cash flow service stability point of view.

Sunil Samdani — Chief Financial Officer

I don’t think inflation has, we have seen an impact of inflation so far on our customers historically. Also, we’ve never seen inflation as the major issue as far as microfinance customer goes and so far we’ve not seen any impact.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay, great, thank you very much and wish you and the team, all the very best for the rest of the quarters. Thank you.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Thank you.

Sunil Samdani — Chief Financial Officer

Thank you.

Operator

The next question is from the line of Rohan Shah from ICICI Prudential Mutual Fund. Please go ahead.

Roshan Chutkey — ICICI Prudential Mutual Fund — Analyst

Yeah, thanks for taking my question. Firstly, this EEB book right of INR52,400 crores. Now, what is the tenure of this book. How many, how many, what proportion of the loans are one-year and what proportion of the loans are two year maturing loans?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

60% loan are two years and 40% of loans are one year.

Roshan Chutkey — ICICI Prudential Mutual Fund — Analyst

Okay. And would you also can you give the breakup of how many of them are first cycle, second cycle, and so on and so forth.

Sunil Samdani — Chief Financial Officer

Sorry, we don’t have it handy, because for last many quarters, we’ve not been discussing these cycles. So we’ll check that and we’ll share it with you.

Roshan Chutkey — ICICI Prudential Mutual Fund — Analyst

Yeah. Thanks so much. That’s all from my side.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Adarsh Parasrampuria from CLSA. Please go ahead.

Adarsh Parasrampuria — CLSA — Analyst

Yeah, so just wanted to check. Could you just give the breakdown of the other income all income excluding the NII you did mentioned the PSLC income. But if you could just break out the INR2800 crores so very difficult to give a line, but I can give you the top three contributors, which will anyway be 80%, 90% of total fee income. So the highest of course is the processing fee that is linked to the disbursement so that for the full year was INR848 odd crores. And the third-party income, the third-party distribution income is the third largest equity is at INR347 crores. Got it. And just [Technical Issues].

Sunil Samdani — Chief Financial Officer

The next piece is the bad debts recovery. This quarter has been a good quarter for us. So recovery from bad debts, is INR388 crores.

Adarsh Parasrampuria — CLSA — Analyst

For the year?

Sunil Samdani — Chief Financial Officer

This is for the year. Got it. This is useful and the PSLC income of INR660 crore was made on what kind of sell downs a certificate like what’s, what’s the underlying quantum? So we didn’t sell anything under the micro portfolio because of the [Indecipherable]. So these were largely [Indecipherable].

Adarsh Parasrampuria — CLSA — Analyst

And naturally and would you now do a little bit more of PSLC sell down. You would have access right?

Sunil Samdani — Chief Financial Officer

That clearly depends on what is my access and how we tend to use it because with the option to us IVP or PSLC depends upon where we get the better yields.

Adarsh Parasrampuria — CLSA — Analyst

Okay. Got it. No, I was just asking this because there will be demand in one or two years from a large bank mergers, so just wanted to check if that you do have more scope in the P&L to do that. And my second question is could you, could you just give the slippages and recovery upgrade numbers for the full year.

Sunil Samdani — Chief Financial Officer

Yes. So for the full year, if you look at bank as a whole or should I talk about EEB?

Adarsh Parasrampuria — CLSA — Analyst

You could give both Sunil, if that’s okay. So for the bank as a whole, the gross slippages was INR9,430 crores. I’m talking about Bank as a whole. Recoveries and upgrades was INR5,561 crores and write-off, was INR3,240 crores. And EEB sale numbers?

Sunil Samdani — Chief Financial Officer

For the full year it is INR8134 crores. The gross slippages recoveries and upgrades was INR4,487 and the write-off, was INR3,244.

Adarsh Parasrampuria — CLSA — Analyst

Okay. This is helpful Sunil. And last thing was asked, but let’s say that the fourth quarter was great. You do have momentum on collections now if credit costs undershoot the next 12 months in terms of the 2.2 number that you guide, would it be fair to say that a lot of it could be used to like just build up the buffer.

Sunil Samdani — Chief Financial Officer

Yes.

Adarsh Parasrampuria — CLSA — Analyst

Got it. Perfect. This is useful, Sunil. Thanks.

Sunil Samdani — Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Kashyap Jhaveri from Emkay Investment Managers. Please go ahead. Mr. Jhaveri, there’s a lot of background disturbance from your line. May I request you to move to a quieter area and ask your question?

Kashyap Jhaveri — Emkay Investment Managers — Analyst

Hello, hello?

Operator

Sir there is a lot of background disturbance from your line.

Kashyap Jhaveri — Emkay Investment Managers — Analyst

I’m actually traveling right now. Just one question from my side and a data point in the recovery that you had during this quarter, what was the interest income that was recognized on those recoveries during the quarter? That’s the only question I have.

Operator

Mr. Jhaveri. I’m sorry, I don’t have that number handy. I have to come back. You can take from us offline.

Kashyap Jhaveri — Emkay Investment Managers — Analyst

Sure. Thank you.

Sunil Samdani — Chief Financial Officer

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Param Subramanian from Macquarie. Please go ahead. Hi team. Thank you for the opportunity. So I wanted to ask on the restructuring book what proportion is still under moratorium because you had mentioned some amount would start coming out of moratorium in fourth quarter and first quarter and what is the accrued interest on the restructured book for the EEB?

Sunil Samdani — Chief Financial Officer

So 50% of the roughly plus or minus 1.2% it can. But roughly 50% of my restructured book will come out of more has come out of moratorium starting 1st April and the rest will start from 1st July.

Param Subramanian — Macquarie — Analyst

Got it. That’s helpful. And what’s the accrued interest on the restructured book.

Sunil Samdani — Chief Financial Officer

Accrued interest on the book should be around INR800 odd crores.

Param Subramanian — Macquarie — Analyst

Got it, thanks Sunil. One more question was basically on the new MFI norms. I wanted to ask a number of the MFI entities are talking about slowing down disbursements, in the first half. Until the credit bureaus et cetera align to new norms basically on calculating household income. So firstly, how are we placed on these new norms if we are looking at it of course applicability is a different thing for us. But are we looking to slowdown disbursements and what proportion of our book would be in line with this 50% EMI to household income cap. Yeah, that was my question. Thank you.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

There is two factors in here. One factor always after the March-April is by disbursement has come down. This is, this is normal nature. First 15 days, there is no disbursement has come. This is a normal nature. Second part of that I mentioned earlier, we are really practicing this household income total in our graduation, loan two years to before and it is practicing that. So in that sense, we have not much more time to transform to the new system. This is going on to us and we are not waiting for one month.

Sunil Samdani — Chief Financial Officer

So essentially what we’re saying is when we started this individual loan product, we were looking at family income we were looking at family credit bureau. So there is a process which is already running for individual loan process. Of course that book is smaller the size than the group loan, so to that extent the volume will be much bigger. It took us two weeks to start that process on the ground and since then, we’ve been doing it.

Param Subramanian — Macquarie — Analyst

Got it, got it. That’s all. Thanks, Sunil. And congratulations on a good quarter. Thank you.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Abhishek Murarka from HSBC. Please go ahead.

Abhishek Murarka — HSBC — Analyst

Yeah, good evening, sir. So my question is again on these new norms. Now, you said that you are already practicing this over the past two years. But what I understand is some part of it is also dependent on external agencies like credit bureaus being able to give you the information and some of the participants have called out that the bureau itself is not ready with that kind of information about the specifics about the consumer and the household. So how are you. bypassing that and I mean, you’re able to get that information I have that information without the help of the bureau?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

It is, you’re right. How you read it is important. So there is no one report for the consolidated family record, both on the micro and on this side. So what we do and our arrangement with the credit bureaus they give us a separate report on the, for the husband and then for the wife, but within that they give us both the Micro as well as the consumer, so we’ll take two reports instead of one and accordingly we proceed. And that is what we’ve been doing it for our individual loans.

Abhishek Murarka — HSBC — Analyst

Okay. And have you, what kind of observation. Do you have on the [Indecipherable] is there enough headroom to give large ticket loans or do you have to increase the duration of the product to accommodate it? What has been the experience because you seem to be ahead of the curve in practicing this.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

[Indecipherable] we are also practicing in our individual loan 50%.

Abhishek Murarka — HSBC — Analyst

So all the customers. They have enough headroom in terms of that 50%.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

No, that cannot be like to comment now but need on that another quarter will be passed and then, we can [Indecipherable].

Sunil Samdani — Chief Financial Officer

So let me give you a data point we used to be 50% to 50% per say for two year loan. That ratio is now 40% to 60%, 46% right. If that helps.

Abhishek Murarka — HSBC — Analyst

Okay. 40-60, sorry, what is that?

Sunil Samdani — Chief Financial Officer

So 40 is one year 60 is two years. Earlier, it used to be 50-50 okay.

Abhishek Murarka — HSBC — Analyst

And are you also planning to introduce longer tenure loans, maybe three years or longer. Just to reduce the EMIs?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

That we will have to see once we have, it is just there. Right. It’s only a month we will have to see whether we are able to fulfill the customer requirements or not and then we will have to take that call whether we are comfortable and the customer is comfortable and then we will have to take that call.

Abhishek Murarka — HSBC — Analyst

Okay. Okay, thank you so much. Thanks for the answers.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Rahul Picha from Multi Act Equity. Please go ahead. Yeah, thanks for the opportunity. My first question is on Assam collection efficiency. So when I look at the collection efficiency in Assam for the month of December, it was 96% and for the month of March, it was 98% while for Q4 average, it was 93%. So why is there a dip in the average number. I just wanted to understand that?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Yes. So it is not a dip right. If you see the average has improved by 2% so yes, you are right. So if you, if you assume that December was the base and then it has to be improved, then yes, you will find it as a dip but if you see on a month-on-month basis. There has been an improvement.

Rahul Picha — Multi-Act Equity — Analyst

Yeah. For the quarter. There is an improvement, but I was just thinking that from December onwards. Our collection efficiency trends should have been on the upside. So in Assam was Jan or Feb a bit challenging or any qualitative insights on that?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

No, not really, you will always see the last quarter of the month will have the higher collection efficiency. So that has been the trend.

Rahul Picha — Multi-Act Equity — Analyst

Okay. Okay. But the average for the quarter being 93 it kind of also implies that probably Jan, Feb would have been even under 90. Right.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

So there are two things here, right. One is the recoveries from NPA. So as the quarter progresses, the recoveries improve. Second is the write-offs that we take that also gets impacted only the March number and not the full quarter number.

Rahul Picha — Multi-Act Equity — Analyst

Okay. But these collection efficiencies don’t include the recoveries from the NPA pool, right? The geographic collection efficiencies that you have given or is it [Indecipherable]

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

No this geographic is excluding NPA.

Rahul Picha — Multi-Act Equity — Analyst

Yeah, okay. So that would have been, I think primarily impacted because of the write-offs.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Yes.

Rahul Picha — Multi-Act Equity — Analyst

Okay. And sir second question is on the restructured book like a part of the restructured book would be out of moratorium starting first April so how have the collection trends been in that book, if you can qualitatively give some color on that.

Sunil Samdani — Chief Financial Officer

We see, we don’t want to give a forward-looking number, but we have given the collection status on our restructured book as on 31st March so it can be very different there.

Rahul Picha — Multi-Act Equity — Analyst

Okay. But as on 31st March, it was still not out of moratorium, right?

Sunil Samdani — Chief Financial Officer

So that’s what I am saying it can only improve it can deteriorate.

Rahul Picha — Multi-Act Equity — Analyst

Okay. And sir, my last question is on the steady-state credit costs. I think a little while back in the call, you said that you expect 2% to 2.5% kind of steady state credit cost going forward. So, was that on the total book or only for microfinance?

Sunil Samdani — Chief Financial Officer

So that’s on the total book.

Rahul Picha — Multi-Act Equity — Analyst

Okay. Okay, fine. Thank you.

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Thank you.

Sunil Samdani — Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Karthik Chellappa from Buena Vista Fund Management. Please go ahead.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Yeah, thank you for the opportunity again, sir. I just have two questions, the first one is for the housing book. Can you share what is the average ticket size?

Sunil Samdani — Chief Financial Officer

INR815,000 on outstanding.

Karthik Chellappa — Buena Vista Fund Management — Analyst

No, no, on disbursement.

Sunil Samdani — Chief Financial Officer

Suresh, do you have that number, Suresh?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

It is the course, yeah, good afternoon. The incremental disbursement [Indecipherable] for INR13.5 lakh is the average ticket price.

Karthik Chellappa — Buena Vista Fund Management — Analyst

INR13.5 lakhs okay.

Sunil Samdani — Chief Financial Officer

For the year.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. And for the individual microloans, what is the average ticket size and yield?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

What does the ticket say, its INR115,000 in an disbursement basis, are you would like to say that the…

Sunil Samdani — Chief Financial Officer

Yield is the theme as group loans 19.5.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. So if the NPA and the individual book is only 1% to 1.5%. And if I assume credit losses also in a similar range with the higher ticket size from a pure micro book perspective this should be ROE accretive right, as the mix shift towards individual loans?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

Yes.

Karthik Chellappa — Buena Vista Fund Management — Analyst

These are sizeably ROE accretive?

Chandra Shekhar Ghosh — Founder, Managing Director And Chief Executive Officer

No, no, no. See, we don’t expect micro-group loans to have a similar credit cost, like what we had last financial year, right. So we expect credit costs there, also to improve, but clearly…

Karthik Chellappa — Buena Vista Fund Management — Analyst

Even to assume the credit costs to be about 225 to 250 basis points for the group loans and this is only 100 basis points lower with a lower cost to income ratio and higher ticket size the ROA should actually be materially higher, right?

Sunil Samdani — Chief Financial Officer

Yes, it will be higher. I don’t want to put an adjective to it, but yes, it is higher.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. Okay. This is enough. Wish you all the very best.

Operator

Thank you, ladies and gentlemen. Due to time constraints, that was the last question for today. I now hand the conference over to Mr. Sunil Samdani, CFO, for closing comments.

Sunil Samdani — Chief Financial Officer

Thank you, ladies and gentlemen, for your time and patience. Thank you very much.

Operator

Thank you on behalf of Bandhan Bank Limited. [Operator Closing Remarks]