Canara Bank Ltd (NSE: CANBK) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Hardeep Singh Ahluwalia — Managing Director and Chief Executive Officer
Unidentified Speaker
Analysts:
Maruk — Analyst
Anandama — Analyst
Parth Gupta — Analyst
Jai Mundra — Analyst
Ashok Ajmeera — Analyst
Bhavik Shah — Analyst
Param Subramanian — Analyst
Atlas Sunjay — Analyst
Akshay Badlani — Analyst
Jayant Kharote — Analyst
Gaurav Jani — Analyst
Sushil Choksey — Analyst
Chetan Wadia — Analyst
Ankit — Analyst
Presentation:
Operator
Good evening everyone. Welcome to Canara Bank Q3 FY26 earnings conference call. I would like to thank the Canara Bank management team for giving us this opportunity to hold the call from the management side. We have with us Sri Hardeep Singh Ahluwalia, M.D.and CEO; Sri Bhavendra Kumar, Executive Director; Sri S.K. Majumdar Sir Executive Director; and Sri Sunil Kumar Chugh, Executive Director.
With this I now hand over the call to MD sir for his opening remarks post which will start the floor for the Q&A. Thank you. And over to you sir.
Hardeep Singh Ahluwalia — Managing Director and Chief Executive Officer
Good evening to all of you. First let me share the highlights of December quarter results. Our bank’s global business stood at 27.1 lakh crores and it grew at 13.23% on a year-on-year basis. The global deposits stood at 15.21 lakh crore and grew at 12.95% year-on-year basis. The global advances stood at 11.92 lakh crore and grew at 13.59%. Operating profit stood at 9,119 and increased on year-on-year basis at 16.36%. The net profit stood at 5,155 crores and grew at 25.61% on year-on-year basis. The return on asset improved by 9 basis point year-on-year basis and stood at 1.13%. The PCR on a year-on-year basis improved by 293 basis point and stood at 94.19%. Our credit cost was at 0.64% and improved by 25 basis point year-on-year. There was a GNP decline of 126 basis point on year-on-year basis and stood at 2.08%.
Our net NPA stood at 0.45% and declined by 44 basis points year-on-year basis. Now our more than 13% credit growth is driven by RAM credit which stood at 7.04 lakh and grew at 18.70%. The retail credit grew at 31.37% and stood at 2.73 lakh crores. The housing loan grew by 17.58% and stood at 1.21 lakh crores.
Vehicle loan also shown fantastic growth. The growth was 26.20% and stood at 25,098. MSME has also shown robust growth of 13.74% and stood at 1.60 lakh crores. The earnings per share was at INR21.48 and improved by 22.11%. Our CET1 stood at 12.37% which improved by 40 basis points year-on-year. Our slippage has shown enormous decline. It declined by 32 basis point year-on-year basis and stood at 0.64%.
Now coming to the guidance parameters. In the beginning of the year we have given guidance numbers for 13 parameters and we have easily surpassed and comfortably surpassed 11 parameters except CASA and NIM which is industry challenge.
Now I am joined — along with me Mr. Bhavendra ji is there who is ED. Mr. Majumdar Ji is there who is also ED and Shiri Sunil Chugh is also there. He’s also ED. And all my CGMs, vertical heads are now ready to respond to all the questions. Thank you.
Questions and Answers:
Operator
[Operator Instructions] We have first question from the line of Maruk [Phonetic]. Please go ahead with your question.
Maruk
Yeah. Hi. Hello. Hello sir.
Hardeep Singh Ahluwalia
Hello, madam.
Maruk
Hello. Sir I had a couple of questions. Firstly on your margin. So I appreciate that the repo rate was cut and there was pressure on margins. But from a strategic longer term point of view, see, our margins are already slightly lower than peers, right? And people are ruling out a policy cut in the forthcoming policy. But these things are still evolving. Maybe after one or two policies there are rate cuts again. So given that our margins are already lower than peers, what are the steps we would take to bring them at least in line with peers? Is there like a growth margin trade-off? Is there a level below which we will not want margins to fall even if there are rate cut sales a quarter down the line or two quarters down the line? What is the absolute level of margins that you would be comfortable with at any point in time? Otherwise we can slow down growth and improve margins a bit, given that we have a traditional issue with CASA. So that’s my first question.
And my second question is on ECL. So what would be the broad impact of ECL? Not the impact of one time transition but on an ongoing basis. So if ECL were already implemented today, what would your credit cost have been instead of what you have reported this quarter? So that’s my second question, sir.
Hardeep Singh Ahluwalia
Okay. So madam, now I respond to it. Regarding margins, our NIM contracted by 2 basis points because the yield on advances because on 5th there was a reduction in repo by 25 basis point. And about 49% of our advance is repo linked. So immediately that transition was happening in those accounts. So yield on advances contracted by 6 basis point, although the cost of deposit also reduced by 4 basis point which had a net impact on NIM or 2 basis point. So going ahead, if you see there is a strong drive in RAM sector. Our RAM is showing a growth of 18.70% and it is led by retail which has showing 31.37% growth. And MSME also you see is growing at 13.74%.
On MSME, the yield on advance is 9.28%, in retail it is 8.88%. So our strategy going ahead is to further capitalize because if you see our guidance number on advances, our advances growth is more than 13.59%. So to capitalize on this retail momentum that has been built. Now coming to the CASA front also if you see our saving bank is growing at 8.51% and saving bank individual is growing more than 10%. So we are performing better than the peers in savings. Even if you see the current account it is growing at 14.92% only due to one single transaction that has happened previous quarter of 26,000 in current account. That is why Q on Q some dip is there. But CASA growth is shown as 9.32%. So I think we will retain this margin with the same momentum going ahead in the CASA and RAM growth. So even if further reduction in repo happens, we presume that our name will be in the range of 2.45 to 2.50.
Coming to ECL, the other parameter, madam, it is going to be implemented from 1st April 2027. Now our bank is making — last year it has made a profit of 17,000. This year going by in the same trend our profit will be in the range of 17,000 to 20,000. So in the ECL under stage two because stage one and stage three does not have any much material impact because it is almost similar to IRAC norms. But in stage two some impact will be there because the provisioning increases from 0.4% to 5%. And there we see that 2,500 additional provision will be required. And for NFP also non-fund limit some 2,500 will be required.
Coming to the default rate on stage one, additional provision of 5,000 may be required. So if I total that one it will come around 10,000 and that can be amortized in four years. So the impact may come to 2,000 to 2,500. Going by the profit we are earning year-on-year, it is very much absorbable. And our CET1 is very strong.
Maruk
Yes. No. But sir, the credit cost on a quarterly basis, will that figure change? This is the transition impact. 10,000 crores over four years is the transition impact.On a run rate basis
Hardeep Singh Ahluwalia
I will answer to it. If you see my slippage ratio it is 0.64 which is the industry best if you can compare with the our peers and our SMA in absolute numbers it has come down from 46,000 to 35,000. And from 4.16% our total SMA has come down to below 3%. So on both fronts we are very, very comfortable to absorb this one. We don’t see any further —
Maruk
What will be your SMA below 5 crore, your total SMA that is above and below.
Hardeep Singh Ahluwalia
Yeah. Total SMA is 35,604. Last year in December it was 43,917. So even our advances has grown above 13%. Our SMA is on absolute numbers it has come down from 43,917 to 35,604. So that’s a credible achievement I tell you. And slippage also it is in absolute control. And our slippage ratio is 0.64% which you can compare with others, it is industry best.
Maruk
Yes, sir. Got it. And sir just one last thing. How much of deposits are left to reprice? A lot of deposit repricing has been done. How much of it is left in terms of term deposit repricing?
Hardeep Singh Ahluwalia
Only 15% is left for repricing. If you see year-on-year there is a 77% dip in the cost of deposit.
Maruk
Right? Correct. Okay, sir. Thank you so much. All the best.
Hardeep Singh Ahluwalia
On retail term deposit.
Operator
Thank you. We’ll take the next question from the line of Anandama [Phonetic]. Anand, your line have been unmuted. Please go ahead with your question.
Anandama
Yes, sir. Thank you for the opportunity. My question was related to our PSLC fees which has been pretty low as compared to what we saw in last quarter. Is it more of seasonality or you are strategically booking lower PSLC fees in this quarter? Or is it something to do with an RBI action where the PSL some declassification has happened. If you can explain on that front.
Unidentified Speaker
Mr. Dhamma, if you have followed us, PSLC it was only a product or earnings of the first quarter. For three consecutive years or two last consecutive years we have only earned in the first quarter of 1,200 crores to 1,300 crores. And this quarter not only we have earned around 1,240 crore, we have earned 900 crore in the second quarter. Third quarter actually there is no chance for a PSLC, there also we earned 140 crore. And I assure you we’ll earn a substantial amount in the fourth quarter also. So it is the industry, if any regulatory thing has happened it is only helping us and it is helping us as a renewed avenue of a sustainable quarter on quarter earning which was not so till last year.
You will see it is in the first quarter and last quarter some amount.
Anandama
Yeah yeah right.
Unidentified Speaker
It is now a sustainable thing over three quarters [Technical Issues] starts doing change their portfolio. As of now though it should not — I mean at least next year there should not be any effect. Going forward we can’t say.
Hardeep Singh Ahluwalia
There will be always surplus and efficient players of PSLC and Canara Bank has that advantage.
Anandama
Sure sir. And so what explains a quarter on quarter jump in our other opex? Is there any line item where we have seen some surge in the current quarter?
Unidentified Speaker
If you see the other operating expenses there are two one-time items. One was IPO charges that Canara, Robeco, and Canara HSBC, that needs to be absorbed by the promoter. So there is around — for that there is a fees of around 80 crore. Another 80 crore is of depreciation, that is for the employee benefit as a part of the furniture scheme. The furniture for employees were replaceable every 10 years which we have brought down as a extra facility for employees to five years. So to do that we had to provide additional depreciation. It is one-time.
Hardeep Singh Ahluwalia
And at par with industry trends.
Unidentified Speaker
Industry — most of the banks. So that around 160 crore, another 100 crore on technology-related expenses were there, that is AMC charges and that on the ongoing capex that is happening that has happened. So this is more or less around 250 crore which is of additional which is not of routine image.
Anandama
Sure. And so taking from Maru’s question, so should we see a margin bottoming out if there is no further rate cut or we should still see some contraction in the margins going forward?
Hardeep Singh Ahluwalia
Yes. With the OMO coming up and the swap being announced, the liquidity will be injected and we see that cost of deposits further cooling down. So yes, if the rate cut doesn’t happen we see that it will stabilize.
Anandama
Sure sir that’s very helpful. Thanks a lot.
Operator
Thank you. We’ll take the next question from the line of Piran Engineer [Phonetic]. Please go ahead.
Hardeep Singh Ahluwalia
Sir, your question sir, not audible.
Operator
Piran, please go ahead with your question. We’ll move to the next question from the line of Parth Gupta [Phonetic]. Please go ahead. Parth? As there is no response.
Parth Gupta
Yeah. Hi. Sorry. So sir, first question is out of the total recovery from the written-off account what went to the interest income line item?
Hardeep Singh Ahluwalia
Total write-off recovery more than 2,000 crores, it is there. Interest income– 370 — about 370 crores went to interest.
Parth Gupta
Okay, sir. Fair enough. Thanks. And my second question is you have raised your — so within the term deposits, within the 1, 2, 3 year bucket, you have raised the deposit rates by 35 bps in January. And so, should we expect that to flow into the cost of funds say by Q4 or Q1. And therefore the decline in the cost of funds will not be as much as what we are anticipating. Is that the right assessment?
Hardeep Singh Ahluwalia
So almost 15% is now replaceable the term deposits. And we see there is a steep decline whatever we have raised last year. If that is getting replaced we are getting some 70, 77 bps lower in the new deposits.
Parth Gupta
Okay. Okay sir. Fair enough. Thanks a lot, sir.
Operator
Thank you. We’ll take the next question from the line of Jai Mundra [Phonetic]. Please go ahead with your question.
Jai Mundra
Yeah. Hi sir. Good afternoon and congratulations on the quarter. Thank you. Sir, first question is sir, if you can bifurcate SMA 0,1,2 separately out of 35,000 crore number. And have you started providing anything on SMA1,2 just for ECL transition.
Hardeep Singh Ahluwalia
Sir, our SMA in absolute terms it has come down from 43,000 to 35,604. The SMA2 has come down from 21,268 to 15,454. And SMA run has come down from 11,882 to 10,593. So SMA2 has come down from 2% to 1.30%. SMA1 has come down from 1.13% to 0.89%. And 1,946 crores in three accounts we have done additional provision as prudent banker, outside the SMA purview.
Unidentified Speaker
If you see that SMA 1 increase due to shifting of only one — Kaleswaram irrigation project.
Hardeep Singh Ahluwalia
That is 5,000 crores and above. That is total I am telling. That gives a bigger picture. Our SMA has come down from 4.18% to 2.99%. And our slippage has come down to 0.64%. That is industry best. So on both counts our bank is doing extremely well on slippage also and reduction of SMA also.
Jai Mundra
And out of this 15,000 and 10,000 crore of SMA2.1 sir, outside of this Kaleswaram and some other large are we providing any. Any. Any rule driven provisioning or as of now there is no rule driven provisioning on SMA1.2?
Hardeep Singh Ahluwalia
Sir, as on date the provision coverage ratio is 94.12%. And in these three accounts we have provided 1946 crores. The outstanding is 6,600, although we don’t see that it will slip because continuously these are appearing in SME.
Jai Mundra
Right? Okay, sure. And secondly sir, on your gold loan if you can quantify sir, how much is the agri gold loan and retail gold loan as on December. And is there any change in the way you classify retail or agree gold because there have been observation at other banks. You know in this, in this assessment by RBI or in general also
Unidentified Speaker
Sir, our total gold loan portfolio to 2 21,000. Out of that agri gold is 1 lakh 48 thousand and non-agrei is 72, 661 crores. So very consciously we have rolled back the products of gold loan in metropolitan and urban centers because that was the RBI observation. Now we are totally complied to it. And our gold loan portfolio is improving at 30% on a yoy basis.
Jai Mundra
Right? Right. And said this, there’s a lot of. I mean strong jump in the retail. Right? 30% plus. Is this a buyout thing or this is totally organic growth. How should one look?
Hardeep Singh Ahluwalia
This is totally organic.
Jai Mundra
No buyout in the retail side, sir?
Hardeep Singh Ahluwalia
No buyout. Totally organic.
Jai Mundra
Okay. Sure sir.
Operator
We’ll take the next question from the line of Ashok Ajmeera [Phonetic]. Please go ahead.
Ashok Ajmeera
Good afternoon sir and compliments to you Ahluwalia sir and on the entire team. Am I audible, sir?
Hardeep Singh Ahluwalia
Thank you Meera sahib. Yes, audible.
Ashok Ajmeera
I’m Ajmera sir. Hope all is well. My compliments to you for the I think highest ever quarterly profit of 5,155 crore. I think the last time we touched 5,000 crore was in Q4 25. If I am correct. So my compliments to you and the entire team. Sir, my first question is on the credit growth target. In nine months itself you already achieved around 11% of the credit growth. Whereas your target for the overall whole year was 10 to 11%. So would you divide it now upward on this. Similarly in case of opposite side, in case of deposit the target is 9 to 10%. But we could achieve in nine months only 6.39%. So little divergence there. So would you maintain your target on the credit? The Same or you will increase by say 2, 3% up?
Hardeep Singh Ahluwalia
Sir, coming to the first point regarding compliments on profit. So this net profit we have made despite increase in provision ratio by 293 basis point. So despite making huge PCR and still we have maintained the net profit and recorded the highest net profit. Regarding credit growth sir, you have told we have given a guidance of 10 to 11%. But already we are crossing 13.59% and we see that going ahead this will be maintained. And in the deposit side also we have given a guidance of 9% to 10%. We are already near 13% and we see that it will be maintained in the fourth quarter also.
Ashok Ajmeera
Yeah, though there were some disturbances, but anyway I could hear you properly. Sir, in fact one of the major contributor of the profit in this quarter was treasury income also which is almost doubled from the last quarter to 3,056 crore now. And profit on sale of investment is 2,590 crore out of that. So going forward whether the treasury will continue to contribute so much in the profit for the last quarter of this FY26 or we might see it slowing down and maybe the income on the other — the net interest side the income is higher and this is how we’ll be able to maintain the 5,000 plus quarterly profit?
Hardeep Singh Ahluwalia
Sir, in the Q3, due to listing profits of Canara Rebaco and Canara HSBC. In Kendra HSBC we offloaded 14.5% stake and in Canara Rebaco we offloaded 13% stake and could gain 2,006 crores. So going ahead if the yields soften then definitely this will be maintained. But at the moment the yields are not cooling. Suppose more OMO operations takes place and with the buy-sell swap if liquidity flows and the cost of deposits come down and the yields soften, then definitely treasury will take a upturn.
Ashok Ajmeera
Sir, as regards the NBFC portfolio, I know that the Canara Bank is always not very optimistic and encouraging the colending part and other things. But of late is there any change in that stance on the NBFC side and colending side? And what is our present exposure to the entire NBFC sector, the loans given to NBFC for onward lending, sir?
Hardeep Singh Ahluwalia
Sir, the NBFC exposure is at 151,000 and it is growing at 6.09%. We are open to NBFC lending provided the rates are good. So normally the AA, AAA rated NBFCs when they approach us but the rates are not competitive then we are shying away for that because protection of NIM is also our major criteria. And while we are growing at more than 13.59%, we don’t see any reason to entertain low yielding advances.
Ashok Ajmeera
No point well taken. Sir in the recovery in the written off account is good during this quarter of 2,051 crore, what is our total written off book. And do we expect to maintain the same momentum of recovery from written off account?
Hardeep Singh Ahluwalia
Sir, if you see last 3, 4 continuously our recovery in write-off has been consistent and that will continue sir.
Ashok Ajmeera
What is the total return-off book, sir, size?
Hardeep Singh Ahluwalia
66,000 crore.
Ashok Ajmeera
66,000 crore. So are we going in the range of some 7%, 8% kind of recovery from this book for the whole year?
Hardeep Singh Ahluwalia
Sir, we have taken a conscious call that it has to be more than 2,000 crores range. And we are continuously trying to achieve that number. If you see last December also it was 2,008 crores. This year 2,051 crores. Although my total NPA book is falling, but we are trying to maintain this recovery ratio.
Ashok Ajmeera
Sir, any ballpark — any calculation has been done, like one of the other bank is also doing on the underwriting standard. Like over the last five years post-COVID, how much amount of the loan has been sanctioned and disbursed. And what is the NPE ratio out of this new underwriting of this last five years? Is there any such which will give the color to the present underwriting standards and how the bank is going forward?
Hardeep Singh Ahluwalia
Sir, already if you see our underwriting standards has improved and our slippage ratio is now industry best at 0.64%. That is a reflection of good underwriting standards already prevailing with Canara Bank. And your SMA also has drastically come down from 4.16% to below 3%. So definitely underwriting has played a very, very important role in that.
Ashok Ajmeera
Good sir. Thank you very much and all the very best.
Hardeep Singh Ahluwalia
Thank you sir.
Ashok Ajmeera
To you and everyone sitting there. Thank you.
Hardeep Singh Ahluwalia
Thank you very much sir. Thank you sir.
Operator
Thank you. We will take the next question from the line of Bhavik Shah [Phonetic]. Please go ahead.
Bhavik Shah
Hello. Hi sir, thanks for the opportunity. What would be your average LCR for the quarter? I was around 150% last quarter.
Hardeep Singh Ahluwalia
Our LCR is 125%.
Bhavik Shah
125. Sir, fair to assume that borrowing increase in the quarter, approximately of 60,000 crores was like back ended. And also wanted to understand at what yield and what instruments were these.
Unidentified Speaker
Please Repeat your question, Bhavik.
Bhavik Shah
Hi sir. Sir, our borrowing increased by 57,000 crores this quarter — quarter on quarter. It was 90,000 and it is 1.5 trillion now. I just wanted to understand what instruments were there and at what cost have they come in?
Unidentified Speaker
No. If whatever borrowings have increased it is on two fronts. One is we have raised AT1 bonds this quarter. And there was refinancing from NABARD and Sidbi of our existing loans. These are the only borrowings that we had in this quarter. And a part of this borrowing — that is AT1 bond is replacement of old also. That maybe the net increase is only 6,00 crore, 700 crore as far as Tire 1 bond is concerned. And the rest is mainly SIDBI and NABARD refinancing at a lower rate.
Hardeep Singh Ahluwalia
What sir is asking is borrowing increase.
Unidentified Speaker
That is part of the borrowing only.
Hardeep Singh Ahluwalia
Our SLR is 24% and the prescribed is 18%. We have excess SLR of 6%. And whenever the opportunity comes we borrow and take that advantage.
Bhavik Shah
Okay sir. And sir, would it be comfortable to share the refinance cost of these NABARD and SIDBI?
Unidentified Speaker
It is around 5%.
Bhavik Shah
Okay. Okay. And last thing, sir. Standard asset provisioning last quarter was also 300 crore. This quarter is also around 286 crores. Sir, anything specific to read here?
Unidentified Speaker
Standard asset provision, one is we had to provide for DCCO extension that some provision of around 80 crores is there. Around 90 crore is there. And other than that I think these are of routine nature. There is nothing else.
Bhavik Shah
Understood, sir. Thank you so much.
Operator
Thank you. We will take the next question from the line of Param Subramanian [Phonetic]. Please go ahead.
Param Subramanian
Thanks for taking the question. I wanted to ask something. Recovery from written off account, about 2,050 crore in this quarter. If you can get some mix between retail and corporate, were there any chunky accounts that we prune or is there a retail granular mix?
Hardeep Singh Ahluwalia
Actually in this written-off recoveries of 2,051 crores there are four major accounts. One is Chinani Nursery, we have received 288 crores. Karanja terminal is 271 crores. So that is the — but few bigger accounts will always materialize.
Param Subramanian
Got it, sir. Would there be a reasonable chunk of retail recoveries also in this?
Unidentified Speaker
That is around 50-50 retail and corporate.
Param Subramanian
And even for the nine months it will be like that?
Unidentified Speaker
That is retail recovery, PENTWO. That is around 1,000 crore per quarter.
Param Subramanian
1,000 crore per quarter you are getting retail recovery?
Unidentified Speaker
That is, yes, from retail recovery in TWO is around — is on an average. it In some quarter it may be more, some quarter it may be less. On an average around 900 to 1,000 crores.
Param Subramanian
Okay, very useful.
Operator
We’ll take the next question from the line of Atlas Sunjay [Phonetic]. Please go ahead with your question.
Atlas Sunjay
Good afternoon. Two, three questions from my side. Firstly on the margin front, do you see any room to cut your term deposit rates or hike your loan pricing let’s say on housing in order to boost your margins from here on? That is one.
Hardeep Singh Ahluwalia
See, we are continuously studying the market. And our term deposit is pricing according to the prevailing market conditions.
Atlas Sunjay
Got it. And on the home loans you think you can increase the pricing there potentially?
Hardeep Singh Ahluwalia
It is repo linked and prevailing market conditions.
Atlas Sunjay
Understood. Secondly the borrowings — yeah. Sorry sir.
Unidentified Speaker
No, carry on. Carry on.
Atlas Sunjay
The borrowings which have gone up, how much further can they go up from here? And I heard your explanation on what is causing it. But how much further can it go up from here?
Unidentified Speaker
We feel we are already at an optimum level. Borrowing is always as a product and we don’t want to increase it. We borrow just to leverage our cost. Just to see that is as sir said, a major chunk is overnight. That also to that with excess SLR that we do to neutralize the cost.
Hardeep Singh Ahluwalia
And take opportunities in the market.
Unidentified Speaker
Market. So it will be — I don’t see that going up. That is at an optimum level.
Atlas Sunjay
And lastly the bad loan recoveries have been quite good for the last couple of years, both from the written-off accounts as well as from NPAs. What is the outlook you have for FY27?
Hardeep Singh Ahluwalia
Sir, it will continue because the recovery tools in market today, we have NCLT options, we have DRT options, SARFAESI options. Your low cadala is being regularly conducted. We have aggressive OTA schemes. So we don’t see any shortfall coming. So we have been consciously maintaining that. And recovery actions are prescribed as per the accounts.
Atlas Sunjay
So similar run rate as this year is possible?
Hardeep Singh Ahluwalia
Yeah, sir, it will continue.
Atlas Sunjay
Thank you sir. Those are all the questions.
Operator
Thank you. We’ll take the next question from the line of Piran Engineer. Please go ahead. Piran, please go ahead with your question. As there is no response, we will take the next question from the line of Akshay Badlani [Phonetic]. Please go ahead.
Akshay Badlani
Yeah. Hi. Thank you for taking my question. Firstly, wanted to ask around, so we got this 2,000 crores off one off profit. Have we utilized that to make any contingent buffers and what would our current contingent buffer be?
Hardeep Singh Ahluwalia
Sir, in three accounts, we are maintaining 1,946 crores as abundant precaution. Although we don’t foresee any slippage in this account, but as a prudent banker, we have done so. And whatever regulatory provisions are coming up, like for DCCO extension and all, we are making at adequate provisions for that.
Unidentified Speaker
And also, you see our provision coverage is going up. As you said, we are still — I mean, when you compare us with our peers, we are a shade below them. So we also want to be in that space of our peers as far as provision coverage is concerned. And as sir said, in standard asset, wherever there are some weaknesses, we are proactively making provisions within the regulatory framework.
Akshay Badlani
Understood. And my second question was around current account balances. There has been overall a lot of fluctuations when I see on a quarter-to-quarter basis. And overall on our deposit strategy, I wanted to understand what are we trying to do in order to improve the deposit franchise, since it’s relatively weaker when we compare it to the peers.
Hardeep Singh Ahluwalia
Sir, this current account fluctuation is due to one account. In September quarter, we have got some 26,000 crores deposit in that account. If we subtract from the prevailing — the September this thing, then from 49,000, it has grown to 54,000. So in current account also we have seen 15% roughly growth. In saving also we have seen a growth of 8.51%. And within saving, actually individual is more than 10%. So we are performing quite well in that CASA space. It is growing at a rate of 9.32%.
Akshay Badlani
Sure. Thank you. Thank you for answering my questions.
Operator
Thank you. The next question is from the line of Jayant Kharote [Phonetic]. Please go ahead.
Jayant Kharote
Thank you for the opportunity, sir. First question is, there is a strong growth in retail at 31% YoY. I see vehicle is grown at 26. If you could also tell us which are one or two top products outside vehicles that are growing in that book. And also, if you could help us with your average yield on vehicle book, as well as some of the other products, ex housing. I believe you spelled out your average yield on retail book is 8.83%. What would it be on vehicle and some other fast-growing products?
Hardeep Singh Ahluwalia
In retail, sir, our yield is 8.79%. So that comprises of the total retail portfolio of housing clubbed with your vehicle loan and other retail products. And in RAM sector it is 8.88%.
Jayant Kharote
So what is the yield on vehicle book?
Unidentified Speaker
It should be above 8.5%. It’s around 8.5%.
Jayant Kharote
Okay. And sir, what are the other products, ex vehicle and housing that are growing rapidly in retail?
Unidentified Speaker
No, no. In that, around 70,000 or 74,000-75,000 crore is gold loan portfolio, which is growing at a jet speed, more than 30%.
Jayant Kharote
And what would be our yield there, sir?
Unidentified Speaker
There, it is around 8.8%. It is around 9%. A little below 9%.
Jayant Kharote
So you are confident of this 8.79% holding up and expanding next year as well?
Unidentified Speaker
Absolutely, yes. That portfolio will grow at this speed.
Jayant Kharote
Great, great. Congratulations, team. All the best.
Hardeep Singh Ahluwalia
Thank you, sir.
Operator
Thank you. The next question is from the line of Gaurav Jani [Phonetic]. Please go ahead with your question.
Gaurav Jani
Thank you for taking my question. The first is, despite a strong Retail growth, why is our margin down sequentially by 5 basis points, and while our LDR has also gone up?
Hardeep Singh Ahluwalia
Sir, margins are low because the CASA is not growing to the level. It is growing at 9.32%. And our average CASA is 30%. And that is, I think, on a lower side, although our endeavor is still to improve that. And it is improving also, but not to that level.
Unidentified Speaker
I’ll add to this. Your question is why it got reduced. You must agree with us that whenever there is a policy rate cut, that has to be passed on to RLLR linked loan immediately. And my 49% of the portfolio is RLLR linked, whereas deposit repricing takes minimum six months — six months to one year. To answer your question, that is the reason for reduction, and that is the main reason for the compression that you see. And I think that will continue till that rate cut stabilizes. To some extent, that challenge will continue for, I suppose, lenders like us.
Gaurav Jani
Sure. And sir, my last question is, how are you looking at deposit growth? While this quarter did have the benefit of CRR, it has been kind of lagging. So how do we kind of plan to ramp this up to meet our guidance on loan growth?
Hardeep Singh Ahluwalia
See, our deposit is growing at 12.95% against the guidance given 9% to 10%. So going ahead also, we will continue with the same performance for the last quarter also.
Gaurav Jani
Sir, just a bookkeeping one, there is a restatement in deposits for September. So anything to read into it? And what has been reclassified?
Hardeep Singh Ahluwalia
Sir, there was a RBI observation that overseas branches, that deposits taken from bank were earlier considered as borrowings. Now we — earlier they were considered as deposits. Now we have reclassified as borrowings. And subsequently we have changed in other previous quarters also. That effect has been changed. So 33,000 reclassification has been done — has been reduced. And it ranges from 23,000 from December ’24 in subsequent quarters. Accordingly, in December, 33,000 has been reduced.
Gaurav Jani
Understood. Thank you so much.
Operator
Thank you. There is a question in the chat box. What is the breakup of fresh slippages during the quarter?
Hardeep Singh Ahluwalia
Yes, sir. In Agriculture, the total slippage is 1,857 crores. 789 is from Agriculture sector. 739 is from MSME. Retail 294 and 35 is from gold. No corporate account has slipped.
Operator
Thank you, sir. The next question is from the line of Sushil Choksey [Phonetic]. Please go ahead.
Sushil Choksey
Sir, congratulations to Team Canara for excellent performance.
Hardeep Singh Ahluwalia
Thank you, sir. Thank you, Choksey, sir.
Sushil Choksey
Majority of my questions are answered, sir. These are typical same questions from everyone. What is our digital spend, because we are focusing on RAM and enhancing our business? And what is the cost for human resource which we are going to incur for enabling technology as well as new initiatives?
Hardeep Singh Ahluwalia
Sir, our staff cost is now stabilizing at 4,900 crores. And efforts are being taken to continuously upskill our staff. So they are there we have our definite expenditure and we see that. The entire staff undergoes training. Last year also, the entire staff underwent training as per their KRAs, so that their performance improves.
Sushil Choksey
Sir, are we spending on enhancing the current management as well as top management and other staff members’ capability? Because tomorrow AI will be there, many other technology initiatives, new product initiatives. So what is the digital spend for all these initiatives and additional incentive and other focus cost? This is your regular staff expenditure. I am saying over and above, what will you do?
Hardeep Singh Ahluwalia
Sir, we are conscious that what our future workforce will look like. So accordingly, we have recruited data scientists, your Python engineers and all for AI capabilities and all. So a vertical has been created separately for AI which is working on identification of use cases that can be implemented in the bank. So already under fraud prevention and default prediction, AI is implemented to some extent. So you will see more and more use cases coming up. And further also, we will enhance the capabilities of our employees under training. There are lot of products we have introduced. One is our Business Around has now been nominated to be adopted across the industry. We have a dedicated Business Analytics team. So that works for lead generations within the system.
Sushil Choksey
Sir, secondly, your total digital spend for the year — the budget for the total spend which you are going to do in digital and what is your future outlook on that?
Hardeep Singh Ahluwalia
Around 1,000 crores we are spending annually on digital initiatives.
Unidentified Speaker
For last three years, sir, we have been spending around 1,000 crores, between 800 to 1,000 every year. And I think this year also — we should be able to reap the benefits now. I think now it is the time to reap the benefit. But AMC charges and all will go up. But as sir said, AI related, we have established a department where we need both from people side and technology side, some investment will go going forward.
Sushil Choksey
Sir, as we have three other listed companies under our fold, in the cross-selling of business as well as for touch points, how are we benefiting? And if we are able to succeed, how many products are we selling to our existing customers?
Unidentified Speaker
No, no, for our Canara Robeco and Canara HSBC, including the Can Fin Homes, so two of our subsidiaries now. So we are getting substantial benefit out of this. So insurance company in the previous NFO what we have launched, so against the target of 500, we have reaped some 6,050 crores in 15 days’ room, what was given. So we are valuing this subsidiary and we are enhancing the value for the customers by cross-selling. So whether it is the Canara Robeco SIPs or mutual fund selling, or it is the insurance what we are selling through our branches, 10,066 branches, we are getting substantial benefit out of these two subsidiaries by cross-selling in a large scale. And our company has also benefited, and we are earning close to 500 crores income out of the subsidiaries by selling their products.
Sushil Choksey
So 500 crores income. But do you mean to say that majority of our CASA customers are taking two products from us, three products from us? They’ll say I’m a CASA account. Is the car loan coming to you?
Unidentified Speaker
Yes, sir. That is what I wanted to say. So apart from car loan and housing loan, we are also selling credit card. We are selling the other product, the Demat account we are selling to them. We are giving so much of benefit by way of this, engaging with them.
Hardeep Singh Ahluwalia
Sir, we have a Business Analytics wing and that is responsible for creation of leads. So they have certain machine learning models, and they scrub the data and accordingly they suggest a person how many products we can sell to him. So whenever a customer approaches the counter, they have this
Opportunity as to how many products, what other products can be sold to this customer. So leads are generating from our customer relationship models and leads are generating through our own machine learning models. So that conversion rate is also very high. That is why you are seeing that
Our credit growth in RAM sector is 13.5%.
Sushil Choksey
Sir, my last question in this round is, sir, the market is favoring PSU banks over all other sectors, including private banks. We are showing healthy profits. We may not — for a nominal growth, which we are doing, we may not need equity. But if the market is rewarding in the past, we have capitalized ourselves by doing QIPs ahead of time. Do we plan something in this quarter coming time, or we look into it at a future date?
Hardeep Singh Ahluwalia
So QIP, I don’t think QIP is now lined up.
Unidentified Speaker
Choksey ji, as you know and you have seen that my capital adequacy is already at 16.5. We are adding around 17,000 to 20,000 profit per annum. So there is no reason — I mean, as of now, we are adequately capitalized to do business, to have a double-digit growth going forward next couple of years. And as and when, if any moment it is required, I don’t see a challenge raising it. But in the immediate future, I don’t think bank will require that.
Sushil Choksey
So basically, self-reliance is going to work in your growth machine. That’s your summation?
Unidentified Speaker
Exactly, sir. Strongly it should work.
Hardeep Singh Ahluwalia
Sir, right now, on business growth front, on profitability front, capital adequacy front, asset quality front, bank is doing extremely good in all parameters.
Sushil Choksey
Sir, congratulations and best wishes for the bank for years to come.
Hardeep Singh Ahluwalia
Thank you, Choksey sir. Thank you.
Operator
Thank you. The next question is from Chetan Wadia [Phonetic]. Please go ahead.
Chetan Wadia
Can you hear me, sir?
Hardeep Singh Ahluwalia
Yes sir.
Chetan Wadia
Yeah, I have only have one question. In terms of your growth in advances, if I have read correctly, you are saying, it was I think 13% growth in your credit growth for the next year. Which are the top five areas of — four, five areas of growth that you see for yourself? And what are the yields on those advances?
Hardeep Singh Ahluwalia
Sir, RAM sector is the strength which is growing at 18.70% and where the yield is also 8.88%. Under MSME also, if you see, we are growing at 13.74% and the yield on such advances is 9.28%. And gold is also growing at 30% where the yield is around 9%. And apart from that, we are generating income through PSLCs, the surplus priority sector that we have. So, these are strength areas of the bank and the written off recoveries also. So, that we will continue.
Chetan Wadia
Sure. Noted that. And my second and the last question is that you said the NIM range would be around 2.45% to 2.5% as you said in the beginning. Any scope for improvement over there over the next one or two years? Is there any such deliberation internally happening to make it a 2.6% to 2.7% range?
Unidentified Speaker
Sir, definitely yes, that will happen as the rate cycle effect settles down, because now there is always a time lag on passing on the RLLR based loans and the deposit repricing. Once that stabilizes, automatically 15, 20 basis point will immediately rise across lenders. So, we should be no exception. It should be more, in fact.
Chetan Wadia
All right. Noted that. Thank you very much. All the best.
Operator
We will take the last question from the line of Ankit [Phonetic]. Please go ahead.
Ankit
Sir, my question is on ECL, sir. Sir, are you doing any ECL provisions? Or what is the total number of ECL provisions from 1st April 2027 that you will be doing?
Unidentified Speaker
It as — as our MD said, it will be less than five-digit, the number. And as you know, if one side it is less than five-digit number, it has one more year to get implemented. In a year, we will add minimum between 17,000 to 20,000 crores of profit. My provision coverage will be all time high of over 95%. So, the requirement of ECL by the time it gets implemented, will further come down from that five-digit figure to a much lower figure. And even if we implement, as we said in the past, my CRAR and CET-1 will get affected by only a percentage point. That means even then my CRAR will be at above 15 and CET1 will be above 11. But this is if we implement in one go. But as we understand, RBI has allowed it to be spread across 4 years. So, it has got almost no effect and we will be able to maintain. ECL differently will have no impact. The provision release that has happened on — not provision
Release, it is the release of funds that has happened on account of this CRR cut during September and November, that itself has cushioned all that. I think there is no effect on this. Across banks, I don’t see if there will be much effect.
Ankit
Okay, sir. I got your point. But your peer banks are doing the ECL provisions like PNB has done. I’m just asking, are you doing any ECL provisions in these quarters, or you are doing just in one go?
Unidentified Speaker
Sir, we feel we don’t need to do any pre-emptive provision before that. That will come from — my quarterly profits will be sufficient at any point in time to absorb that, without hindering business growth and capital position.
Ankit
Okay. Thank you, sir.
Operator
Thank you. Thank you. That was the last question for the day. I hand over the call to the MD, sir, for his closing remarks.
Hardeep Singh Ahluwalia
So, sir, I have already said that it is our strong numbers, be it business growth, be it asset quality, be it profitability, operating profit, net profit and capital adequacy. And I don’t see any reason that this growth will not continue in the last — it will continue in the last quarter also. So, thank you, sir.
Operator
[Operator Closing Remarks]