IDFC First Bank Ltd (IDFCFIRSTB) Q3 FY22 Earnings Call Transcript

IDFC First Bank Limited (NSE:IDFCFIRSTB) Q3 2022 Concall dated Jan. 29, 2022

Corporate Participants:

V. Vaidyanathan — Managing Director and Chief Executive Officer

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Analysts:

Kunal Shah — ICICI Securities — Analyst

Mahrukh Adajania — Elara Capital — Analyst

Ishan Agarwal — Erevna Capital — Analyst

Prakhar Agarwal — Edelweiss — Analyst

Vivek Ramakrishnan — DSP Mutual Fund — Analyst

Subrat — SBI Life Insurance — Analyst

Yogesh Singhvi — Sky Investment — Analyst

MSJ Ashish Krishna — MSJ Capital — Analyst

Aditya Singhania — ENAM Holdings — Analyst

Rohit Jain — Tara Capital — Analyst

Pramukh — B&K Securities — Analyst

Anand Bhavnani — White Oak Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q3 FY ’22 Earnings Conference Call of IDFC FIRST Bank hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.

I would now like to hand the conference over to Mr. Kunal Shah from ICICI Securities. Thank you and over to you, Mr. Shah.

Kunal Shah — ICICI Securities — Analyst

Thank you and good evening everyone present on the call. Today, we have with us Mr. V. Vaidyanathan, Managing Director and CEO; Mr. Sudhanshu Jain,

CFO and Head, Corporate Center; and Mr. Satyeshi Baparit [Phonetic], Head, Investor Relations from IDFC FIRST Bank to discuss their Q3 and nine months FY ’22 earnings. Congratulations for good set of numbers and over to you, sir.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thank you. Good evening everyone. Really a good pleasure to talk to all of you this evening. I’d like to just say that we had a good quarter and we thank all of you for your goodwill. I’d like to just take you — give you a quick brief about how the last few years have been, and then I’ll come to the particular quarter.

Now, it’s been exactly three since the merger. So three years is a good round numbers, I thought I’ll just tell you quickly in three years how much distance we’ve covered. We’ve tripled the number of bank branches from 206 to 599. We’ve grown the ATM 6 times or little more than 6 times from 112 to 727. The CASA as such has grown from only INR5,274 crores at the time of merger to INR47,000 crores. So that’s a growth of INR42,000 crores in three years. I think, by any standards, that’s a good number. The CASA ratio increased to 51.6%. We dropped rates a few quarters ago and still stable at 50%-plus. So that gives us a lot of confidence. The core deposits and what we call the core CASA, retail CASA and retail term deposit, that’s grown by INR54,000 crores in three years. So the short point out of these five data points to you is that I think now it is beyond doubt that our bank is able to raise very significant amount of retail deposits from the market, from the public and that comes from a good product, good pricing, good brand, very customer-first philosophy, very service-centered philosophy and so on.

So I think these — all of these factors have played a big role and therefore now we feel very confident that really if the banks start growing again at 20%, 25%, per annum from here on, which we believe we will, the kind of deposits we will need will be about INR20,000 crores, INR25,000 crores a year. But since we’ve done that, we just feel that we’ll be able to do that comfortably now.

Now the second part of the work we’ve done over the last two, three years is that we have substantially brought down the infrastructure loan. The infrastructure loans have come down from INR22,000 crores, at the time of merger to just about INR8,000 crores now. So I think that’s a big drop and our latest conversation — I’ll try to give you a breakup of this INR8,000 crores also, we’ve brought down the certificate of deposits from INR22,000 crores to INR7,000 crores, that’s also very comfortable now. So all kinds of issues with — the Top 10 borrowers, concentration was 12.8%, it’s only 4.3% now. So basically, again, we worked on derisking the balance sheet, both on the liabilities and asset side and I think we’ve done that.

Now coming to this particular quarter, let me just say that our wholesale funded assets, basically wholesale loans, the funded side, it grew sequentially from INR20,822 crores last quarter to INR21,647 crores. So let me just say it’s sequential growth in wholesale loans. We always maintain that while retail is our big mainstay, wholesale too is important to us. And if we find good quality credit, we will do it, and I’m happy to say that it’s been three years since the merger, the quality on the wholesale loans is simply excellent and haven’t had any significant — even a single account to talk about, which is of any significance.

On the — including non-funded asset, our wholesale loans is now INR45,000 crores. Now, another data point is that during the last one year, A and above rated exposure on that side is now grown from 74% to 79%. So broadly that story on the wholesale side is fine.

Now, we would like to give you a bit of a breakup, as of this quarter end, about what the total fund — of the total funded and non-funded assets — basically of the total funded assets, what is the composition of a book. If you go to composition, basically home loans is 10%; loan against property is 14%; wheels is 8%; consumer loans is 13%; rural finance is 10%; commercial finance, basically business loans, small business working capital, business instalment loans, those kind of stuff, that’s 9%; and corporate and other loans is about 23%. So you can see that we’re now diversified over 10, 12 lines of businesses. No single line of business in more than 15%, so it’s rather diversified. And even — the only thing — the one that’s greater than 15% is corporate, but like I said, we are now feeling broadly comfortable on an incremental basis. The next point is basically — sorry, the infra is 7%.

Now next is about the disbursal. On disbursal, basically a simple one liner is that disbursal is back to pre-COVID levels and we don’t worry about that anymore. Next point is that, of the retail book itself, this time we have segregated between two parts. What we used to call as retail until the last quarter, we tried to do a bit of comparison with the system as such and we find that a lot of these small entrepreneur loans and business loans and SME loans, usually the banking system calls it commercial finance and we were calling it retail finance and wholesale, we were too blunt about our classification. So this time we have further segregated it so we call the retail book as retail book and then the business financing are now called commercial finance. So the breakup is that, now our retail book is INR75,500 crores and the commercial book is INR10,500 crores. So together, you can call it like INR86,000 crores.

Now I’d like to — our restructuring as a percentage of the book was 2.6%. And last point is about asset quality and then I’d like to stop and then I’d like to just make it open to questions and maybe Sudhanshu can say a few — maybe has few inputs to give you.

Now, so back to the numbers on asset quality. Now as far as we are concerned, we track our book by many criteria. The check, what percentage of our checks, when we present for clearing, return, that’s usually a very good indicator, because end of the day, later you have to — those customers flow in the delinquent bucket if they bounce. So that is one indicator we track how many customers bounce their checks as a percentage. We track that over the last 12 months and we can say that it’s almost, like, touched pre-COVID levels. We used to get to 12% earlier, it’s now 12.1%. Let me just say, it’s like touched almost fractionally — it’s almost as good as before.

Number two, we check, of the loans booked the previous month, in the subsequent month, what percentage of customers return their checks. Basically it gives us an instant sense about how the quality of the incremental booking is as compared to what it was, say, 12 months ago or 18 months ago. So that number is literally at all-time lows and we feel really very good about that. It’s like 8% something. Now that is really good by any standards and going by any historical benchmark we had.

Number three, let me say that, of the customers who return their checks, the third analysis we do is about how many of them — what is the collection percentage on those customers. Even those collection percentages, we track it by bucket types, bucket 1, bucket 2, bucket 3, every bucket we track. And in every single bucket, we find that the recoveries have actually kind of exceeded what was plus pre-COVID. So you can take that as a good data point and a good trend.

The fourth thing, we then check is, of the customers who go into delinquent buckets, what is the recovery you get, I mean, assuming you’ve taken a provision against a customer base, but what about — provision doesn’t mean the customer doesn’t owe us the money, so customers still owes us the money. So on that is what we call recovery, we don’t call it collection, we call it recovery. So again that’s the fourth data point we track and numbers are looking pretty good.

The fifth thing we track is the vintage analysis as to how was the portfolio booked six months behaving basically what was booked 12 months ago, with every 18 months ago, with 24 months ago and so on, so again that data point. So we have done enough analysis on our portfolio and we studied day in and day out and now we feel very confident to start guiding the credit loss numbers for the next year as well, assuming, of course, there is no unforeseeable event, there’s no crazy things happening. So all that is assumed.

Now assuming that things are going on as things are going on right now, we believe that next year we can now start guiding for credit loss of just 1.5% and that’s a huge statement from our point of view because we feel that we’ve never had it this low before. I want to just take you back a little in time that when we used to do this business in Capital. First, those credit losses to be more like about 2.6% to 2.7% on a yield of about 16.5%, 16.6% or a little more than that. But if — for this year, that is in ’21, ’22, we had guided for credit loss of 2.5%, which I’d say is — it will be pretty good, considering that wave to happen this particular year. And let me say, we’re broadly trending on that track. So what was 2.5%, we are now beginning — we then guided for 2% thinking that we will definitely achieve it, but now we’re feeling a little more confident to guide for 1.5%. So all in all, we’re feeling pretty good about our asset quality.

The other good thing, from our point of view, is that the wholesale book, it had — all of you have been quite concerned about our wholesale book issues and what we call legacy or whatever. So those accounts, we’ve had a few infrastructure accounts, some road accounts, some toll road accounts, Dewan Housing, finance capital, we had many of these issues. I’m happy to say that we now feel that most of those accounts are behind us, maybe in one or two accounts, may be there but they’re not going to materially move this bank’s P&L in any subsequent quarters that we ever have to call out and say, oh my god, this account has happened, now we’re going to post a loss. You won’t hear those statements from us again.

The other significant event that has happened in our lives is that the core — let me say the core, core operating profit — what I mean core, core, I mean net of not having any treasury or one-time kind of incomes like a core NII plus the core fees minus core opex. Now that number for the bank was literally at the time of merger used to be like INR285-odd crores, pre-merger was maybe INR90-odd crores for the half year. So that number, what is INR289 crores is now INR650 crores plus. So therefore, we are pretty confident that even though the balance sheet did grew by 17% since the merger, the operating profit has grown by 100%. Now if book grows 17%, profit grows 100%, you know that the incremental dynamics are really very powerful. And that frankly I’m not surprised, because we know that if you do a business at 5.8%, 5.9% NIM, value has to get created, it all comes back to credit loss. So we feel very strong on credit loss. So once NIMs are strong, credit loss is good, we just believe that profit is only around the corner, it has to rise. So, personally of course, I’ve seen the cycle before. It starts with a loss and it comes to breakeven and then it starts getting the profit. So we’ve also come to that two, three stages in this bank for the last three years. But I’m feeling reasonably good about the whole thing.

The last thing is about what happened on the telecom account. In this year — in this quarter we got — we had a INR2,000 crore funded exposure as all of you knew. So that money has come back this quarter. We had decided to take an additional exposure of INR500 crores from them. It is part of an overall request made by the company and we felt broadly comfortable considering that they were coming back and government was increasing equity and promoters increasing equity and all that stuff.

So that’s about what we have to give as an opening token. I just hope that helps. So thank you very much friends and thanks for being here today with us and thanks for showing interest in our organization. You’ve been patient with us for many years like two, three years now. We thank you for that. And I think it’s our time to pay back. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] We take the first question from the line of Kunal Shah from ICICI Securities. Please go ahead.

Kunal Shah — ICICI Securities — Analyst

Yeah. Sir, just to take it forward, anything in terms of the cost to income because across the board, for all the private banks, we have seen a significant rise coming in terms of the opex both on quarter-on-quarter as well as year-on-year? And particularly, it’s more related to customer acquisition, the retail assets, now rollout investments in digital and all. So — and we are also focusing all these aspects. So finally, in terms of cost to income, how should we see and what will be the guidance out there?

V. Vaidyanathan — Managing Director and Chief Executive Officer

It should come down. As you know, we had start-up costs for these branches and ATMs and all that stuff. After all, we had to raise that kind of liabilities quickly so we had to go through that cost structure. Then, yeah — then even our asset products are relatively higher cost of products, not the recent one that we started, home loans, etc., but the other businesses of ours were relatively high cost. So, yeah, our cost structure is little high. But I think that the cost to income from now on should begin to come down for us.

Kunal Shah — ICICI Securities — Analyst

Sure. And secondly, in terms of how has been the slippage run rate overall? So we had seen a decline, but both in terms of the retail in particular, corporate, I think there is one account, but otherwise on retail, how has been the run rate and how would you guide for that here?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Maybe I’ll take that. So we have seen net slippage coming down by 25% as compared to the previous quarter. And on the retail front and on the overall, as you mentioned that there was a toll account, which slipped into NPA during the current quarter, and that was already part of the identified stressed asset pool and hence, if we exclude that, the slippage has come off by 25%.

Kunal Shah — ICICI Securities — Analyst

Okay, thank you.

Operator

Thank you. The next question is from the line of Mahrukh Adajania.

V. Vaidyanathan — Managing Director and Chief Executive Officer

So before you comment Mahrukh, I’d like to give a little more color on the slippage. The key point towards slippage is what happens in SME. On the SME front, we find that SME as a percentage of the previous quarter — as a percentage of the book in our core retail book, in our commercial book, in our wholesale book, we find in all three of them, it has come down to less than pre-COVID levels. So that gives us some indication that future slippages would be lesser. In the rural book, of course, it has increased compared to pre-COVID, but that’s because of JLV book and that has to play [Indecipherable].

Mahrukh Adajania — Elara Capital — Analyst

Yeah, hi. So I just — sir, just a clarification from your opening remarks. So now the exposure to the funded exposure to the telecom company would be INR500 crores, is that correct?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Correct.

Mahrukh Adajania — Elara Capital — Analyst

Okay. And then unfunded would be?

V. Vaidyanathan — Managing Director and Chief Executive Officer

INR1,244 crores.

Mahrukh Adajania — Elara Capital — Analyst

Okay. And how do you view — what is the proportion of external benchmarking rate linked loan?

V. Vaidyanathan — Managing Director and Chief Executive Officer

What’s the external benchmark linked loan?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

So we don’t have that number specifically which we have called out to the market. But on the corporate front, we have been pricing loans, which are linked to MCLR as well as external benchmark linked rates. And on the retail front, again, we have been pricing it based to repo rate as per the regulatory guidelines.

Mahrukh Adajania — Elara Capital — Analyst

Okay. Okay, thanks a lot. Thank you.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thanks, Mahrukh.

Operator

Thank you. The next question is from the line of Ishan Agarwal from Erevna Capital. Please go ahead.

Ishan Agarwal — Erevna Capital — Analyst

Hello, thank you for the opportunity. First of all, many congratulations for such a superlative performance on all fronts and also on the large telecom account ambiguity being resolved. So the questions for the quarter are, firstly, if I see the NII for this quarter, just wanted to clarify that, does this interest income include the interest income for this telecom account for the prior periods or this is the core net interest income?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah, maybe I’ll answer that. Sudhanshu here. So, the interest income for the quarter includes income on the telecom account for the prior period, and that is what we have also specifically called out, when you see our NIM disclosure that the normalized NIM for the quarter is 5.90%.

Ishan Agarwal — Erevna Capital — Analyst

What would be the quantum of the prior period income that has been added in the NIM for the — in the NII?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

It would be about INR100-odd crores but let me clarify that even in the previous year, in the same quarter, we had received interest on this telecom account and on a cash basis as we were accounting it on realization. So it’s sort of a comparable from an NII point of view on a year-on-year basis. And the benefits…

Ishan Agarwal — Erevna Capital — Analyst

No, actually I was making a comparison on a quarter-on-quarter basis because on a quarter-on-quarter basis, I have seen a substantial jump in your NII.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Quarter-on-quarter, it’s not comparable. That’s why we’re calling it out also. If you notice the way we are calling out our NIM, if you go technically, if you compute the NII and divide by the average book, you’ll find it’s 6.18%.

Ishan Agarwal — Erevna Capital — Analyst

Right.

V. Vaidyanathan — Managing Director and Chief Executive Officer

But we are calling it as only 5.9%, if you notice.

Ishan Agarwal — Erevna Capital — Analyst

Right, right, right.

V. Vaidyanathan — Managing Director and Chief Executive Officer

We’re never claiming our NIM for the quarter is 6.18%. We are claiming it’s only 5.9%, because we’re subtracting what does not belong to this quarter, it’s a prior period number, we’re subtracting because we don’t want it to color the expectations of people, nor do we want it to show up as a NIM of this quarter.

Ishan Agarwal — Erevna Capital — Analyst

Right. So…

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah, and it’s increase on a sequential basis is 14 basis points if we exclude that income.

Ishan Agarwal — Erevna Capital — Analyst

Right. Secondly, when you guide for a credit cost of 1.5% for your total average asset book for FY ’23, will it be fair on my side to assume that the retail credit cost would be 1.8% to 1.85% and the blended retail plus wholesale would be 1.5%?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Could be, hopefully, lesser.

Ishan Agarwal — Erevna Capital — Analyst

Okay. Okay, great. And thirdly, if I look at the RBI data on debit card, even credit cards are debit cards issued are up 9.22% in Q3 as compared to Q2, which is the highest increase for any universal bank in the country. However, the SAAR [Phonetic] value growth doesn’t reflect that. Is it right to infer that average SAAR ticket size is becoming smaller and hence more granular and once this transition of outflow of large ticket size SAAR is done with, SAAR growth will again reflect the volume growth?

V. Vaidyanathan — Managing Director and Chief Executive Officer

That would be correct.

Ishan Agarwal — Erevna Capital — Analyst

Okay, great. And this point has been clarified, yeah. And what was the blended retail you used for this quarter?

V. Vaidyanathan — Managing Director and Chief Executive Officer

You mean for the incremental booking or the stock? I mean…

Ishan Agarwal — Erevna Capital — Analyst

Yeah, for the retail book for this particular quarter.

V. Vaidyanathan — Managing Director and Chief Executive Officer

We don’t have the number off hand, but you can probably get to about 15%.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah. So we have not been calling out that number, but you can assume that incremented yield is about 14.5% to 15% on the retail book.

Ishan Agarwal — Erevna Capital — Analyst

14.5% to 15% and that, I would — can I assume that, that number would be slightly lower for ’23, ’24 because our focus is now on home loans?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah, I mean that’s factored already, no? Because we’re already doing good home loans.

Ishan Agarwal — Erevna Capital — Analyst

Right, right.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Doing — you mean the prime home loans, we’re already doing home loans.

Ishan Agarwal — Erevna Capital — Analyst

Right, right.

V. Vaidyanathan — Managing Director and Chief Executive Officer

We’re doing more of the prime home loans now. But yeah, it does depend on use, but we also have other portfolio, which is giving us a good yield. There we have a specialization can save 10 years. So they all mix up but, just to be safe, we can go at even 14.5%. But I think it’s a pretty — it leaves for a pretty good margin, considering our cost of funds.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

And again the interest rates are expected to go up in the system in general, right? So I’m saying [Technical Issues] it could be that the interest rates go up, right? And both the assets and liabilities sort of gets reset. So it’s kind of difficult to comment per se in terms of where these “ifs” could sort of move on. But this range could — this could be some, I would say, a range bound — it could be range bound around 14% to 15%.

V. Vaidyanathan — Managing Director and Chief Executive Officer

But even if it came down by a few basis points, frankly, it doesn’t trouble us too much because of the fact that home loans is a good asset to have and also because of the fact that the margin class is still pretty strong.

Ishan Agarwal — Erevna Capital — Analyst

Okay. And regarding the non-funded exposure to the telecom account, when does that bank guarantee that release? Is there a date for that bank guarantee to be released?

V. Vaidyanathan — Managing Director and Chief Executive Officer

We hear from the market and from media and from whatever we hear from the company also that, that should come up for release. So we are hopeful.

Ishan Agarwal — Erevna Capital — Analyst

Okay. Lastly, is the management confident of crossing the 6% mark on NIMs sooner?

V. Vaidyanathan — Managing Director and Chief Executive Officer

I mean it should inch up even from here, from these numbers, it should inch up, yes.

Ishan Agarwal — Erevna Capital — Analyst

Okay, thank you. Thank you and congratulations once again.

V. Vaidyanathan — Managing Director and Chief Executive Officer

And as you know, between 5.9% and 6%, it doesn’t take too much to get this.

Ishan Agarwal — Erevna Capital — Analyst

Okay. Thank you.

Operator

Thank you…

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thank you very much for this call.

Operator

The next question is from the line of Prakhar Agarwal from Edelweiss. Please go ahead.

Prakhar Agarwal — Edelweiss — Analyst

Yeah, hi, sir. Just a couple of data points to start with. What would be your gross slippage number recovery in write-off for this quarter and subsequently last quarter as well?

V. Vaidyanathan — Managing Director and Chief Executive Officer

That’s what I thought Sudhanshu was calling out.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah, so I had mentioned that the net slippage was about…

Prakhar Agarwal — Edelweiss — Analyst

That language is gross number, that’s why. You mentioned about net slippage, which will have recovery in write-offs increase as well. I just wanted a gross slippage for the quarter.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Okay. So the gross slippage includes that one toll account, which sort of came in during the quarter, which was about INR248 crores. Excluding that, the gross slippage was about INR1,200-odd crores.

Prakhar Agarwal — Edelweiss — Analyst

INR1,200 crores, and any predominant segment from this because consumer finance is seeing around INR1,200-odd crores, any predominant segment that we are seeing this number coming from?

V. Vaidyanathan — Managing Director and Chief Executive Officer

No. We find that it was basically JLVs that among — we have noticed that among all our portfolios, it’s almost like I said, I reeled out numbers to you earlier in the opening remarks that things are almost heading back to the pre-COVID. I think JLV is the only one that still have more amount of SME by an order of magnitude.

Prakhar Agarwal — Edelweiss — Analyst

Perfect, perfect. Just a second part in terms of telecom clarification that — so you said INR500 crores of fund base and non-fund base of around INR1,244 crores. What is the outstanding provision that we’re carrying on that as of now?

V. Vaidyanathan — Managing Director and Chief Executive Officer

On what?

Prakhar Agarwal — Edelweiss — Analyst

On telecom exposure? What is the provision that we are still carrying on?

V. Vaidyanathan — Managing Director and Chief Executive Officer

We have no provision and we have released that provision.

Prakhar Agarwal — Edelweiss — Analyst

That provision is released. Perfect. And then lastly on this credit cards, so while it is too early to gauge a trend, but what would be your revolver percentage with that? And why it is we are reporting a loss in that particular aspect — in that particular book? It’s largely to do with opex or anything to read into your credit losses into that segment?

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, no, no. Nothing to do with credit losses. In fact, the credit is dealing very well there, anyway, it’s largely to cross-sell to existing customers and all that. It’s basically startup costs, because the credit card, by nature of the business, is such that it’s got a huge amount of technology expense and system expenses and that of course the call centers and you name it, it got all those expenses that come with it, reward points and all that. So basically that’s how the credit card business works. So at this point of time, this is largely — the book is not yet built up to scale, but the opex is still there, that’s how any business starts, I guess. You start with expense and income comes later. So our book is I think about INR1,600 crores now?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah.

V. Vaidyanathan — Managing Director and Chief Executive Officer

And I think once that book scales up, we have no doubt in our mind, we’ll make lots of profits there.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

And just to add in terms of — and just to add, sorry, in terms of spend, we are seeing a very healthy increase in spends on credit cards. And in fact, in this quarter, because of also the festive — because it was a festive season, we have seen a very healthy increase and spends were up almost 50% as compared to the previous quarter.

V. Vaidyanathan — Managing Director and Chief Executive Officer

And Prakhar, let me tell you, if you’re not using our card, you’re missing something. I don’t want to know the name of your card you have in your pocket, but chances are that your APR is 42%, your default charge is of only 48%, probably you’ve build lots of things here and there and maybe you are also given a fee waiver subject to spending X or Y. It’s a very simple, straightforward card. We don’t take money from your pocket list. We are that way. It’s really free for life. If you spend, you spend, you get a good amount of reward points. If you go over the limit, we’ll probably call you and tell you don’t go over the limit, we’ll have to bill you fees. It’s a very honest, nice, good quality card you should have in your pocket. So please own one.

Prakhar Agarwal — Edelweiss — Analyst

Perfect. I’ll try that, sir. Just one last clarification. In terms of consumer loans, what all is included in that INR1,600 crores of portfolio, what all the — sorry INR16,000 crores of portfolio, what all is included in that?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah, I see you evading the question on credit cards, so nevertheless. So on the consumer, it is largely personal loans to salaried people, even digital loans, consumer durables and those kind of products.

Prakhar Agarwal — Edelweiss — Analyst

Okay, perfect. That answers it. And I will try the credit card for sure.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thank you. Thank you for that. Appreciate it.

Operator

Thank you. The next question is from the line of Vivek Ramakrishnan from DSP Mutual Fund. Please go ahead.

Vivek Ramakrishnan — DSP Mutual Fund — Analyst

Congratulations on excellent performance. And sir, I can already see you’re doing cross sell even during an analyst call, which is brilliant.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Of course.

Vivek Ramakrishnan — DSP Mutual Fund — Analyst

My questions were two. One is in the growth of the liability side. The deposits, if you see quarter-on-quarter, retail deposits were flat. And when you say borrowings and legacy borrowings going off, are you going to replace them with CDs or how is this traction going to happen is the first question. The second question…

V. Vaidyanathan — Managing Director and Chief Executive Officer

Hold, hold, just ask one question at a time. It’d be easy for us. So let me first answer that one. So, yeah, basically see, after we dropped the rates, the — there were a number of customers who had simply moved money to us because we’re paying 7% or 6%. So they just found it an easy way of managing their liquidity and so on. So a lot of those customers who are just — let me say, some of those customers who withdrew their money, they got easily filled by the new customers who came in even at the current rates. So that’s the norm that’s been playing out for last two or three quarters. In any case, we never wanted more deposits for last two, three quarters because of the fact that we were already running LCR of 170%, there was a huge amount of negative drag. So really the — and also the refinance lines are available at cheaper rates, even cheaper than fixed deposit rates. So therefore we were happy to manage our liquidity like that.

So now that — like I said in the opening remark, if the book starts growing, we’ll start growing these deposits again. It’s not a problem for — I told you the numbers earlier. We feel it’s a lever we press and we take.

Vivek Ramakrishnan — DSP Mutual Fund — Analyst

Okay. And would that be because you’ve already invested in the branches and you just need to kick in the operating leverage? Would that be a fair thing to say?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Absolutely. Because there is a — believe me, we have a really good brand. We may not be in the league of those big fours, but we are, let me just say, close in terms of the respect the brand enjoys among our customers. And really I’m not doing a double sales pitch on here, so Vivek, what I’ll just tell you then because we don’t — because our fee structures are really very fair, and you know there are lots of fee structures which are — which we are not charging like non-home bank charges, IMPS charges, then it’s free and SMS banking charges and digital banking charges, there are a lot of those things we don’t charge. People who bank with us are — very few of them leave us. So we hope that — so therefore we believe that customers who are with us will stay and new customers keep coming, India is a large market. So that’s the way to think about it. To say that, think about it that the branch structure is there, deposit can come, then we want it, no problem.

Vivek Ramakrishnan — DSP Mutual Fund — Analyst

Okay, sir. The second thing was remarks have been made on the JLV book which you said is still running very high. Have you seen any sequential improvements in that book, given the fact that the Omicron wave lockdown seems to have been — it seems to be slowing down?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yes, yes. Despite Omicron, we are seeing month-on-month for the last, I think, three months or so, our, what we call the SME, zero to 89 buckets, we’re finding that even with JLV, that number is coming down. So we are not like very bearish on JLV. Of course numbers are much higher than the rest of the businesses, slippage was more than other businesses, all that is true. But we feel it’ll be okay. I mean it’s not like a crisis.

Vivek Ramakrishnan — DSP Mutual Fund — Analyst

Thank you very much and good luck, sir.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thank you very much, Vivek.

Operator

Thank you. The next question is from the line of Subrat from SBI Life Insurance. Please go ahead.

Subrat — SBI Life Insurance — Analyst

Hi, sir. Thanks for taking my question.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Hi, Subrat.

Subrat — SBI Life Insurance — Analyst

So I know that you don’t disclose how much is the BBB or below BBB numbers in the wholesale account, but if there is any color on that, it will help.

V. Vaidyanathan — Managing Director and Chief Executive Officer

We can share it, it’s not a big deal. As we speak, we’ll pull out the numbers.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

And maybe if I can just start on that one. So on the wholesale, the book, as Mr. Vaidyanathan said earlier that the book is very pristine, the new book which is getting sourced and that’s also getting reflected our improvement in the rating mix. On an external rating basis, more than 75% of the book is rated as A and above.

V. Vaidyanathan — Managing Director and Chief Executive Officer

It’s actually 79%.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Actually 79% is rated A and above. And based on internal rating, about 80% of the portfolio is rated A and above if we exclude the infrastructure book.

V. Vaidyanathan — Managing Director and Chief Executive Officer

So we’ll give you one more number since you asked for it. As Sudhanshu was speaking, I got hold of it. So A and above is at 79% and BBB and below is 21%, if that helps you.

Subrat — SBI Life Insurance — Analyst

Okay. And this includes wholesale and infra both?

V. Vaidyanathan — Managing Director and Chief Executive Officer

This is the…

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

That’s correct.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah.

Subrat — SBI Life Insurance — Analyst

Okay, thanks a lot, sir.

Operator

Thank you. The next question is from the line of Yogesh Singhvi from Sky Investment. Please go ahead.

Yogesh Singhvi — Sky Investment — Analyst

Good evening, Vaidyanathan sir.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Good evening. Hi.

Yogesh Singhvi — Sky Investment — Analyst

Actually I have no question, just a sincere feedback. So numbers are all good, so there is no question there and already you have answered the question. Sir, actually, I just wanted to give a feedback. Since very — last few quarters, I am seeing you are publishing numbers on the weekend, sir. So any particular reason about that, because normally banks or other companies, they declare results in the market hours.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah, we can think about that. We just felt safer with regard to confidentiality and so on so forth saying that, look, these are because the market close…

Yogesh Singhvi — Sky Investment — Analyst

Why I’m saying sir, because normally bad results are published on the weekends and good results are published in the market hours. That is one thing. Because our results are so good since many quarters, but we are publishing on the weekend.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Okay, we’ll think a little about that.

Yogesh Singhvi — Sky Investment — Analyst

Since the feedback from the shareholder side…

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Let me just add, even the two largest private banks have disclosed on weekend only. However, we still take a note of the suggestion.

V. Vaidyanathan — Managing Director and Chief Executive Officer

We’ll think a little deeper about that. Sometimes we feel that it is a little safer in terms of confidentiality, because in the last few hours or before the results are announced, a lot of information flows back and forth between the key managements who are — who have access to that information. So if that is done on a — after Friday, after the books are closed, after markets are closed, it just feels a little safer. So that actually is the thing that goes on back of the mind, but anyway we’ll think a little deeper about that maybe.

Yogesh Singhvi — Sky Investment — Analyst

Thank you so much for listening to the suggestion, sir. And congratulations once again. Thank you, sir.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thanks very much. Yeah.

Yogesh Singhvi — Sky Investment — Analyst

Thank you.

Operator

Thank you. The next question is from the line of MSJ Ashish Krishna from MSJ Capital. Please go ahead.

MSJ Ashish Krishna — MSJ Capital — Analyst

Sir, thank you so much for the opportunity and for the great set of numbers that you posted. My question is on the reverse merger with IDFC Limited. Is there anything that you can share currently and on when the timeline would be for the completion of the reverse merger?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Hard to say, I think whatever is there in public domain is already there. So I wouldn’t like to add too much to it.

MSJ Ashish Krishna — MSJ Capital — Analyst

Thank you, sir. That’ll be it.

Operator

Thank you. The next question is from the line of Aditya Singhania from ENAM Holdings. Please go ahead.

Aditya Singhania — ENAM Holdings — Analyst

Thank you. Congratulations on great results, Mr. Vaidyanathan. I just wanted to get a break-up of the provision line item and fee income, if possible. Like it could really help if we get that in the presentation itself, or else if you can share that on the call, that would be useful.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah, so in terms of provisions, as we have…

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, no, no, fee income.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

He has asked for both.

Aditya Singhania — ENAM Holdings — Analyst

Yeah, both actually.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Okay.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

So in terms of provision, as we have mentioned in the presentation that provision for the quarter was INR392-odd crores. During the quarter, certain items to note is that we have released provision of INR487 crores on Vodafone. But at the same time, if you see that, we have improved our PCR from 52% to 57% and for that we had made certain additional provisions. We have also called out that we have made provisions of about INR250 crores on legacy infrastructure and corporate accounts. And further into the presentation, if you see that, PCR on the corporate book is now close to about 82%, 83%. Even on the infrastructure account, where if we exclude that one large toll account, which has slipped into NPA in Q1, if we exclude that, because we expect no material economic loss there, since we are calling out for this exclusion, then the provision cover on the infrastructure book is again 85%. So the moot point which we want to say is that the provision cover is quite healthy on the corporate and the infra book, barring that one large toll account, which is at about 19%-odd. And if we include technical write-offs and exclude this large toll account, the PCR cover is actually 75%. So, that’s broadly on provision.

V. Vaidyanathan — Managing Director and Chief Executive Officer

[Speech Overlap] The provision number usually is in gross of technical write-off, because it has a direct bearing on provision. So that — if you take growth of technical write-off, that number moves up from 57% to 67%.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah, 67%.

Aditya Singhania — ENAM Holdings — Analyst

No, no, I got the information in the presentation. What I was looking for is a breakup of the provision line item into loan loss provisions, any investment-related provisions, standard accounts and any other items, if possible.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Loan loss?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

So all are pertaining to — I would say, loan loss provisions are largely there during the quarter. And in terms of investment provisions, as we have said that we have released provision on the bonds, right, of Vodafone, which were in the follow-up investment, so that has given release in terms of investment provision.

V. Vaidyanathan — Managing Director and Chief Executive Officer

So basically think of it, just to summarize, you might ask listen, you released Vodafone, now where is the money? So let me answer the question. So supposing we say that Vodafone release us INR487 crores, so we thought that it’s a good thing for us to use this opportunity to increase the provision coverage ratio and strengthen the balance sheet. So we increased the PCR from 53% to 57%, that is net of technical write-off. I told you, gross, it would be 10% higher. So we do start to increasing provision coverage and then we also provided for fresh movement of wholesale accounts to NPA, like the new toll account of INR248 crores that moved in and so on. So that consumed about INR250 crores, about INR250 crores was therefore PCR increase. So that’s where that is there. So the money is there. We hope that as and when those clients payback — and by the way on both the toll accounts, we eventually expect to get the money back. And that money comes back, it’ll come back to the P&L. As of now, the balance sheet is more fortified, stronger, better PCR and all that.

Aditya Singhania — ENAM Holdings — Analyst

So the total gross provision for loans is about INR875 crores this quarter. There is nothing else in terms of other types of provisions. That’s what I just wanted to clarify.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah, largely the retail — it’s the normal provision that comes to the retail book and like I told you, Vodafone account, I’m calling the name out because everybody knows the name, so that release we used it for, let me say, for wholesale accounts that slipped this quarter and for including the PCR. So that’s the simplest way we can reconcile it for you. So — and like I said before, those two wholesale accounts — infrastructure accounts, we are actually hoping to get the money back. So today or tomorrow, hopefully that money comes back and then hopefully it comes back to the P&L someday in life.

Aditya Singhania — ENAM Holdings — Analyst

So I just wanted to clarify this in the context of the guidance you gave on credit cost, was that for the current year or for the next year?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Next year.

Aditya Singhania — ENAM Holdings — Analyst

1.5%.

V. Vaidyanathan — Managing Director and Chief Executive Officer

1.5%, next year.

Aditya Singhania — ENAM Holdings — Analyst

Okay, okay, got it. Thank you. And just a breakup on the fee income, if possible?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

So as we’ve mentioned that our fee is quite granular. So the total fee for the quarter was INR744 crores, out of which 82% was retail fees and about 35% of the fees was linked to loans, which were disbursed during the quarter and the rest is fees linked to your cash management related, linked to your third-party products and so on. Then we also do toll business, some fees on different credit cards. So it’s a quite a granular fee stream, which we have.

Aditya Singhania — ENAM Holdings — Analyst

I mean most of your peers actually give quite a detailed breakup of fees. So it would really help if you gave a breakup of both fees and provisions on a quarterly basis. It would just help — unnecessarily there are questions being asked on the call as well.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thank you for that. We’ll give more [Indecipherable] about it on fee income from next time onwards.

Aditya Singhania — ENAM Holdings — Analyst

Thank you and congratulations once again.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Thank you. Thank you very much.

Operator

Thank you. The next question is from the line of Rohit Jain from Tara [Phonetic] Capital. Please go ahead.

Rohit Jain — Tara Capital — Analyst

Yeah, hi, good evening. Sorry, I missed a bit of the call. So if this question has already been asked, please excuse. But just wanted to know the improvement in NIM. Was it driven by lowering of funding cost or was it driven by increase in the lending yield?

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, no. We discussed before you came on the line that this included a certain amount that came because of prior period of the telecom account. I mean, the the telecom paid — account paid back the interest this quarter, but we were accounting for it on a cash basis. So a portion of the money actually pertains to prior quarters. We report our NIM, net of those prior period money.

Rohit Jain — Tara Capital — Analyst

So even net of that, I think it’s 5.8%, which has improved sequentially, right?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah, yeah, 5.9%. Yeah, that is — that 5.9% is all real, there is no one type of…

Rohit Jain — Tara Capital — Analyst

That’s what I wanted to know that, that sequential improvement, even if one considers that 5.9%, what is that driven by? Is it driven by lowering of funding costs or is it driven by an improvement in lending yield?

V. Vaidyanathan — Managing Director and Chief Executive Officer

With 10 basis points, it’s hard to pick this or that, but let me just say that…

Rohit Jain — Tara Capital — Analyst

I’ll tell you why I’m asking that question because a lot of the growth has been driven by increase in the mortgage lending and this, as you know, is pretty much a very competitive segment of the market. So one would have intuitively thought that, that would have an adverse impact on the NIM, but the NIM has actually gone up. So that’s what I’m trying to square in my mind as to what has driven the sequential improvement in the net interest margins.

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, no, your question is fair. I’m not dismissing it. I was trying to say that 10 bps was not an amount that we applied so much to. But the — our way of thinking about it is that, it’s not just home loan. We also have so many other businesses, give us pretty strong yield. And as long as the mix keeps improving 10 basis points, [Technical Issues] will increase. Basically, mix — there’s still an improvement in mix happening all the time. You want to say something, Sudhanshu?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

So I think you are looking for some numbers, so I’m saying in terms of yield, that yield has been broadly stable. If we compare it to the previous quarter, it came down on a blended basis by about 10 basis points, whereas the cost of funds came down by 20 basis points during the quarter.

Rohit Jain — Tara Capital — Analyst

Okay, perfect. And the second was structural question that I had. And I think I’ve asked this before also on earlier calls. Your bank is operating at a very high NIM of 5.9% and in my history of tracking different banks, even the ones that have the best cost of funding, the NIMs generally have stabilized around the 4%, 4.5% where you are in the sweet spot of risk versus return. So is there not a risk that I think right now, as I said earlier, we are in a great retail credit cycle and all of that is good, but how sustainable is a bank operating at a NBFC like NIM of 5.96%?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Okay. Now we think about it, first of all, our business model is becoming more and more like a mainstream bank as far as the incremental book disbursals are concerned, like if we’re doing new car loans or doing home loans, and all that. So — but still, to your question about the margin, now think of any of the mainstream banks in the country today and remove the wholesale book from their books. Now what do you think the NIM would be? Will be much higher, right? So…

Rohit Jain — Tara Capital — Analyst

I mean, just the whole question is that there is a merit to having a diversified book. So I know, I mean, right now, you’re running a retail-heavy book, but that is what I’m coming to. Is that a sustainable business model?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Hold it, hold it, hold it. That’s what I’m trying to explain to you. I think you jumped a little ahead of that. So I was just saying, think of a bank which has a relatively lower share of a wholesale funded credit. As you know, wholesale funded credit of top corporates go at really fine prices. So we think that our book would have more of a — currently home loans is growing at 44% per annum, last quarter was 47% growth, this quarter it’s 44% growth. So our home loan book — the prime home loan book is a really big opportunity, and as I hope all of you will agree that there is no limit to how much that business can grow. So as that business begins to grow, as our new car loans begin to grow, I think there could be some sort of a tapering off on these numbers. But as things stand right now, the fact that they’re guiding for credit loss of 1.5% next year, it must tell you that we are feeling pretty good about the — about asset quality. And let me tell you…

Rohit Jain — Tara Capital — Analyst

I’m not talking about the next one year, it’s more of a medium-term question. So you said that there could be some tapering off.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Hold it, hold it, hold it. Let me add one more thing. You think about it. Think of a Muthoot or Manappuram, okay? You may say it’s gold loan, nevertheless, we’ll talk about that later. But then you could — or think of the very large Indian NBFC which is there in this market right now, we could be lending at 16%. We could be having a NIM of 11% and go on and on and on for 10 years, maybe in the other cases of other gold company, maybe 20 years, 30 years, 50 years. So basically it is a specialization that companies have developed in their respective spaces. So it would be purely theoretical to say that, okay, higher NIM, we could hike rate, credit loss. It’s basically a specialization that we have built. So that’s why I like to think about that. And actually if you think of many of the lines of businesses we do, our credit loss is really very, very low. And even at 1.5%, I hope you’ll agree, it’s pretty low.

Rohit Jain — Tara Capital — Analyst

No, I understand that, but I really struggle to understand if you — when you compare, let’s say, yourself with a Muthoot, I mean, I know is just huge return [Indecipherable]. It’s not exactly the right comparison, because that’s a mono-line business, where growth is determined by whatever factor it is and as you often said, you’re becoming more and more a mainstream bank. And I guess that’s a way forward as well. So I mean [Speech Overlap] specializing in that is very different from some of the other mainstream bank if your aspiration is to be more like a mainstream bank.

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, it is a mainstream bank because, after all, we’re doing corporate banking, and we like it because like I told you, three years have gone by, we’ve not had a single blow up on wholesale credit of a single loan given after merger. So we like that business, we’ll grow that also. We like mortgages, we’ll grow that. We like new car loans, we’ll grow that, we like the loan against property, we’ll grow that, we do like loan against property, we’ll grow that. So you see the point is that you get — all of these businesses are fantastic businesses, they have all been in India for 30, 40, 50 years. So — and forget even private sector bank like ours, or other big boys, big players. Think of even a state-owned bank, even smaller state-owned banks, like an IOB or a UCO, they don’t seem to have any problem in credit in any of these sectors. I mean, not had one for the last 30, 40 years.

So therefore these are — because India has — we should not forget that in India the whole ecosystem has very much become supportive for good credit, because of poor bureaus, because of data, because of analytics, because of cash flow evaluation, because of a number of factors. I mean, we won’t have time to go through all that now. But the point is that the ecosystem, the guard rails in the country have become very, very strong. So we should not get purely theoretical about it, we should be more about having really good controls. And let me just say, that we ran this for 10 years in our — even in a previous avatar, 10 years is not like a joke. It’s not like a year or two flash in the pan. And for 10 years, we’ve never had a credit loss problem dealing with all these segments. So let me leave it at that. I think that we can go on for a while. So let me just leave it at that. Maybe if you have a concern, maybe you can also introspect, we’ll also introspect about that.

Rohit Jain — Tara Capital — Analyst

Okay, fair enough, thanks. Thanks a lot.

Operator

Thank you. The next question is from the line of Pramukh [Phonetic] from B&K Securities. Please go ahead.

Pramukh — B&K Securities — Analyst

Yeah, hi, sir. Thanks for the opportunity. I have a few questions. One is, sir, if I see your credit card spend share, you have already — you are closer to 1% of the system credit [Technical Issues] what you have just recently launched. I just wanted to check what would be your aspirational level for the next two to three years in this — as a market share?

V. Vaidyanathan — Managing Director and Chief Executive Officer

We haven’t put out any specific number like that, we’ll go with the flow. We don’t want to start at the end and mind on this. We got to do it very carefully, build a good brand, build a good experience for customers and build good credit quality and all that. And then, whatever it comes, we’ll go with the flow.

Pramukh — B&K Securities — Analyst

Understood. And, sir, on your deposits, if you can share some more details. And maybe, what is the share of Top 20 depositors or maybe what is the average ticket size in CAR, NPV. And is this like 100% sourced from branches or do you also source DSA channels for deposit sourcing or any other non-branch sources?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

So yeah on deposits, we largely do sourcing through our own employees and also open accounts digitally where it’s a DIY process. A customer comes and opens an account and so it’s not through DSA, to answer specifically on that. And in terms of CASA, so that — as we mentioned, that has grown by 18% on a Y-o-Y basis and in fact, average CASA grew by 29% and in that, the proportion of CAR has increased at a faster pace, at about 65% on a Y-o-Y basis. Of course, for us, CAR, related to CASA is currently a smaller percentage, just about 15% of the total CASA and we see ample opportunity of much — of the faster growth sort of continuing in that segment. Does that answer your question?

Pramukh — B&K Securities — Analyst

No, so, it does in part, but any comment on the ticket sizes here maybe on SAAR or TD.

V. Vaidyanathan — Managing Director and Chief Executive Officer

We have a fairly higher ticket size. Let me say, we have a slightly upper-middle income-ish — middle-upper income-ish customer profile, so to say. So that probably gives you a color maybe about INR1 lakh, INR1.5 lakh, or maybe INR80,000 to INR1 lakh when people open accounts with us, a little more than that.

Pramukh — B&K Securities — Analyst

Sure. Understood. And any color on the retail within TD, and what could be the bulk TD and retail TD if it is there? So I think you have already given that side. So okay, so that is good. Yeah, so I think it is there, right, in your presentation, retail deposit and wholesale deposit, including CD.

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

Yeah. Deposit numbers are mentioned on Slide 50 of the presentation. And in terms of TD book, we have given that our surplus TD less than INR5 crores. That book is as granular in the total deposit base and that the issue stands at greater than 85%.

Pramukh — B&K Securities — Analyst

Sure. Understood. And as I had missed your initial comments where you said that the telco exposure was fully repaid, the bond exposure and you have created a newly — I mean recent exposure of INR500 crores. You also mentioned something that — I mean that the color of that exposure as in why do you need to not have any provisions there. So can you just repeat that? I mean, why don’t you want to continue the provisions, I mean, despite having some exposure there?

V. Vaidyanathan — Managing Director and Chief Executive Officer

See as part of this process of — the company expected the banking system to come forward and that’s because I think any — every company would have lines of credit going at the banking system. So their representation was that, listen, end of the day, government is putting — taking stake in our company and they have, and the promoters are putting in equity and we’ll be a good up and running proper good quality going concern. So we are a large group, end of day, and they are a large group with so many businesses across, so it’s not — we didn’t think it appropriate that we wanted to pull the plug completely on them. After all, we want to respect that institution and we felt that — in its earlier avatar, of course, we won’t take any credit, but in the new avatar, with the government equity, promoter equity, all that coming through and all that, we felt comfortable participating in the process. And then once we’re giving this fresh facility, they felt, we really don’t need to take any more provisions on that.

Pramukh — B&K Securities — Analyst

And lastly on, sir, two data keeping questions, if you have the ECLGS outstanding for your bank as of third quarter and have you seen any slippages from that book?

Sudhanshu Jain — Chief Financial Officer and Head, Corporate Center

So the ECLGS outstanding book is about INR1,500-odd crores and we have not seen any significant credit deterioration there.

Pramukh — B&K Securities — Analyst

Sure. And the last question, sir, on your stock of provisions, so I see your specific provisions is somewhere around INR2,500 crores. A, is it safe to — I mean, these provisions that you carry on your stressed but not NPA watchlist kind of a thing, INR800 crores, that is over and above that, right? Or what is the stock of non-PCR provisions as on 31 December?

V. Vaidyanathan — Managing Director and Chief Executive Officer

I think the number is there, no? INR1,080 crores or something like that. That book has actually really come down, INR1,083 crores. INR1,083 crores, on which we have a provision of INR877 crores…

Operator

I’m so sorry to interrupt, may I please request you to rejoin the queue for your follow-up as we have people waiting for turn. Thank you.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah. The short answer is that, out of INR1,083 crores of identified stress account, provisions is INR877 crores, PCR is 81%. Okay, let’s move on.

Operator

Thank you. We take the last question from the line of Anand Bhavnani from White Oak Capital. Please go ahead.

Anand Bhavnani — White Oak Capital — Analyst

Thank you for the opportunity. Quick couple of questions, one is clarification on the credit quality. INR487 crores of provisions for the telecom account, which were reversed, how much of it was in the current quarter?

V. Vaidyanathan — Managing Director and Chief Executive Officer

This quarter, everything.

Anand Bhavnani — White Oak Capital — Analyst

Okay. So adjusted for that, then if I were to understand, P&L provisions would have been around INR879 crores; INR391 crores plus INR487 crores, right?

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, no, no. We need that — there was nothing pressing for us to really take the PCR from 53% to 57%. So this was an amount that kind of came to us in this quarter. So we actually thought that why not strengthen the balance sheet to take it. So you can’t really assume that if this had not come, then probably PCR would have been lesser, but the bank would have still been quite profitable.

Anand Bhavnani — White Oak Capital — Analyst

So let’s then — trying to understand better, let’s then assume, had it not come and you had kept the PCR the same, what would have been the credit cost? Because I want to do like-to-like comparison, have a sense of how the cost is evolving. So two things have happened. If both not happened, what could have been the credit cost?

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, no, it’s not so easy to do the quick counterfactual on a pen and paper like this because even the wholesale accounts that we’ve taken provisions — on the wholesale account some proactive provisions we have taken, that INR250 crores we talked about. So theoretically, they could also have a counterfactual. So let me just say that the simple way of explaining it, this is what I told you earlier, that INR250 crores is for corporate accounts that we have taken this quarter, rest we’ve increased the PCR from 53% to 57%, and you got to just go with this number at this stage.

Anand Bhavnani — White Oak Capital — Analyst

Okay, I’ll just repeat, so that INR250 crores is for some corporate additional provisioning?

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yes.

Anand Bhavnani — White Oak Capital — Analyst

And PCR increased from 53% to 57%, these two, and what was the last, sir?

V. Vaidyanathan — Managing Director and Chief Executive Officer

That’s it.

Anand Bhavnani — White Oak Capital — Analyst

So then other than that — okay, fine. These two and conditional provisions and the release came from the telecom…

V. Vaidyanathan — Managing Director and Chief Executive Officer

Effectively, you can think like INR487 crores came and then kind of got used up in this. Like I said, we wanted to strengthen the balance sheet, we wanted to — let me put it very simply, that we wanted to use the opportunity to strengthen the balance sheet and we did. So tomorrow, for example, if we provided for the — that particular infrastructure account, where — which the INR248 crore account, we would have taken significant provisions. Now, let me say that, some quarters go by and that money comes back, it comes back and this money can still come back, but as of today, you feel safer, we feel safer, everybody feel safer, that, look, there is no much more hits yet to come. You see, one of the big issues that people have always had with our bank for the last three years has been, look, how much more to come. I mean, people have almost, short of using the word, said listen, folks, how long can this legacy wholesale account go on — story go on? So, yeah, I mean, we used the opportunity, we took it out and we believe that no major legacy account issue is pending in front of us.

Anand Bhavnani — White Oak Capital — Analyst

Sure. That’s very helpful, sir. And a couple of data keeping questions, one is micro finance book, if you can give me the PAR 30 as of December, and as of September so that I can get a sense of how the micro finance book has evolved.

V. Vaidyanathan — Managing Director and Chief Executive Officer

I don’t think they have the number off hand. But like I told you that, that had relatively more delinquency than the rest of the book by an order of magnitude, more delinquent. But like — another member asked earlier — a participant saying that, how is that trending like? That trend is also improving every month for the last three months. But still, the short answer is, it is more delinquent.

Anand Bhavnani — White Oak Capital — Analyst

Noted. And restructured book, what would be the absolute amount of restructured book or Tier 1 to MSME restructuring, absolute amount as of 31st December?

V. Vaidyanathan — Managing Director and Chief Executive Officer

2.6% of the book, we said.

Anand Bhavnani — White Oak Capital — Analyst

Okay. Thank you, sir. And have a nice weekend.

V. Vaidyanathan — Managing Director and Chief Executive Officer

Yeah.

Operator

Thank you very much. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Kunal Shah for closing comments.

V. Vaidyanathan — Managing Director and Chief Executive Officer

No, no, before Kunal comes on the line, so first of all, I want to just make a closing comment. So I’d like to just say that, thank you every one of you who’ve been with us for the last three years and tracking us so closely. We’ve been through a lot, merger issues, legacy, this that, wholesale account, infrastructure account, COVID, we’ve been through a lot. But the good thing is that I must safely say that the balance sheet is now pretty strong, not very strong, very, very strong. The key thing is that I think one conversation got lost in the whole story is the operating profit. I think that operating profit reaching this sort of order of magnitude is a very big event. And if you now start taking normalized credit loss, which comes in a normal book of INR1,20,000 crores, that we can begin to say that operating profit is higher than a normalized credit loss and by that logic, barring some really unfortunate circumstances, which I hope not, our bank should not have to ever post a loss again hopefully.

So that’s what I’d say, and therefore, I call it a very inflection moment and really we’ve covered a lot of ground. So now, let me just say that people who believe that this story is set for a significant change, either you will believe us today or you’ll believe us two quarters or you’ll believe us four quarters from now, but believe you will, because that’s how I think the game is changing now. So thanks so much for — do watch this space for the next two, three quarters and you’ll get more convinced. Thank you.

Kunal Shah — ICICI Securities — Analyst

Yeah. Thanks a lot, sir, for, I think, patiently answering all the questions and also giving the insights around the numbers and the strategy as well as the future and all the best. And thank you all the participants for being there on the call. Have a nice weekend. Thank you.

Operator

[Operator Closing Remarks]