INDIAN BANK (INDIANB) Q2 FY23 Earnings Concall Transcript

INDIAN BANK (NSE:INDIANB) Q2 FY23 Earnings Concall dated Nov. 04, 2022

Corporate Participants:

Shanti Lal Jain — Managing Director and Chief Executive Officer

Analysts:

Anand Dama — Emkay Global Financial Services — Analyst

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Unidentified Participant — — Analyst

Unidentified Speaker —

Presentation:

Unidentified Speaker —

Good afternoon, everyone. We have with us today Indian Bank MD and CEO, Mr. S L Jain; Shri Imran Siddiqui; and Mr. Ashwani Kumar for the Indian Bank’s second quarter post results con call. I would request Jain sir first to brief on the results that we had in the second quarter and also provide some outlook on the growth, margins and asset quality. Also would request sir to discuss about the standard of asset provisioning norms, which have been implemented and been enforced on lot of public sector banks in the recent past. And that has been talked about by a lot of public sector bank managements during these calls. So, would request sir to touch upon that point as well. Over to you, sir.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah, good afternoon. Welcome to all analysts and investors in the post-results second quarter. So, as far as business of the bank is concerned, we have grown by 10% on a Y-o-Y basis. Under business deposit, we have grown by 7%, saving deposit, we have grown by 7% and the current deposit, we have grown by 9%, so CASA we are maintaining 41%. In the credit side, we have grown by 14%. So in the RAM sector we have grown by 13%. Under the RAM, retail, we are growing 14%; agriculture, we are growing 15%; MSME, we are growing 9%; and corporate, we are growing 6%.

An, yeah, having the RAM share of 62% which has improved from 60% to 62% [Phonetic]. So the RAM is a prime area of growth. This is the business number, if you see the profitability number, our NII has grown by 15%, our operating profit has grown by 11%, our net profit has grown by 12%. In addition to NII or other income, that is fee-based income has grown by 18% or forex income has grown by 171% and PSLC income has increased. So excluding the treasury impact, our other income has grown by 7%. So NII, 15%, other income net of treasury 7%, operating expenses have grown by 4%, resulting increase in operating profit by 11%. And the provisioning since our asset quality is improving, so the net profit has grown by 12%. If you see the pre-tax profit has grown by 160% or so.

Now coming back to the asset qualities, our asset gross NPAs have come down from 7.30% and net NPA to 1.5%, from the 2.12. The reason being that slippage was around INR2,300 crores and the recovery was around INR3,300 crore or so. Under the slippage basically in INR2,300 crore, around 45% of slippage comes from the agri, and around INR400 odd crores is from the restructured book. The slippage from the restructured book is coming down, which was around INR1,400 crore in March than the June INR1,000 crore and in September, it is around INR400 odd crores. So that the — now that restructured book is you can see performing well.

As far as the capital part is concerned, we are at 16.15% and if we add six months profit of INR2,400 crores, it would be 16.92%, close to 17% so bank is adequately capitalized. Now coming to specific questions about the margins and on, last year, margin was 2.91%. In the first quarter, it was 3.10% and the second quarter, it was 3.20%. The repo increase of 190 bps — 140 bps has been passed on during the quarter ended September and the 50 bps which was announced in September will be passed on this current quarter. As far as MCLR is concerned, you see from 1st April till today, our MCLR — one year MCLR which is a major, has increased from 7.3 to 8.10. So around 80 bps MCLR increase we have done.

If you see the deposit rates from, say, 1st April till today, so we have increased our deposit rate on various buckets, so it is from 1.1% to 1.4% in the range of various buckets. So that — since the 41% is the CASA and 60% is a term deposit, so on an average 131 — 130, so you can say 60% — 78% so 80 bps we have passed on as a part of MCLR. So considering this and also considering the fact that interest rates are tightened in the markets. So we are of the view that we should be able to protect our margin at around 3% to be on a conservative side. This is a margin.

Now, regarding the provisioning of standard assets and others, we are governed by the RBI guidelines and whatever are the RBI guidelines and whatever has been told by the RBI through inspections and all, we are fully complied. So this is where we stand today. In addition to this number, bank is working hard on digitizations. So in digitization, we have launched various journeys whether it is a pre-approved personal loan for salaried whether pre-approved personal loan for professional and self-employed, loan against FDR then the Mudra loan, then the KCC renewals, then our insurance products all we are giving through mobile banking. And bank is totally focusing on digitizations, so mobile registration which was around the 58 lakhs, year back has crossed 1 crore 2 lakhs.

So since all these products we are offering through mobile banking, so mobile — bank is totally focusing on increasing the mobile activation, so you see the 76% rise, likewise the Internet banking has also increased and the digitization which was around 70%, year back is now 82%. So — and in addition to this customer-friendly journeys, we have also rolled out the performance management system in the bank, where the KRAs of each employee — each and every officer will be tracked based on the targets given by them. So it will give the productivity increases going forward.

In digitization, in addition to this, we are doing number of other things as well, whether it is a Middleware, so that we will be able to have a API integrations and horizontally we can grow, because the API integration you can grow your businesses. This omnichannel, we are also doing, we have also onboarded the lending platform, so that we will be able to come out more and more customer-friendly journeys in the time to come. We are also working on the trade finance module, where we will be able to offer customer-facing services, so as to have better customer experience and to increase our income.

Now I am open for question and answer and with me are both the executive directors and the top management team here.

Unidentified Speaker —

Yes. So thank you for touching upon all the points. So particularly on the margins before we take the Q&A, I think that is one very important aspect that we have seen across public sector banks, some of the banks have seen really strong margin uptick during the current quarter, but the uptick that we had seen in a bank was relatively moderate versus the peers. So any specific comments over there?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So margin, of course, 50% but you see this year — this quarter this — out of 2,300 slippage, 1,059 slippage is on Agri. In Agri, but in a KCC which is a long time to classify account based on the duration of the account, so there is a interest reversal of around INR260 crores, whether in terms of reversal is happened on all these accounts. In addition to that, what we have done, we have also done interest reversal for the restructured account, the moratorium period interest which has been capitalized this for the [Indecipherable] guidelines that also give a reverse, and because of these two, the NII growth which is appealing 15% quarter [Indecipherable], but this is as per the RBI guidelines, indoor.

Questions and Answers:

Anand Dama — Emkay Global Financial Services — Analyst

Yeah, thanks sir. Now we open the floor for Q&A. First question we have from Mr. Ashok Ajmera. Please unmute yourself.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Good morning, Jain and the team, just good noon. Sir, complements for yet another good quarter for the bank, which I mean the overall financial position of the bank, you have managed very well along with the even asset quality and most of the parameters — the ratios and the figures are within the given guidance and parameters. Sir, having said that, my first question on rather some information required on the overall treasury operations. Though, segment-wise, there is a income of INR1,441 crores, the profit in the treasury. But overall if you look at it and with this rising interest rate scenario and now with this Fed increasing 70 basis point again and maybe RBI also now accordingly will merge it maybe 50 basis points, 60 basis points going forward, what are your views and observations are on or your comments on the overall treasury operations of the bank sir, including the money which you are making from the foreign exchange transaction, sir?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So our investment book is around INR1,84,000, right, so 25% obviously is in the HTM and AFS book. Here you’ll see what we have done we have churned out of the portfolio, the treasury bill which was around INR9,500 crores has come down to INR4,500 crores, so INR5,000 crores of amount we have churned out and invested in the central government or state government securities, where the yield is better, because over — what we are doing is wherever the yield is more than 7.5% we are increasing our portfolio but it is less than the 7.5% we are selling. That way we are doing last quarter, so we have made profit of INR125 crores as well in the last quarter even in this volatile time.

So this is the one where we will continue to have that kind of a strategy and in this process what happened our yield has also improved, in the overall treasury book as well as in the HMT and AFS book. In a forex though — we have — from last six to eight months or from last one year, we are seeing that forex profit has continuously increasing that 171% or so. So there are opportunities in the forex market, first point. Second point, we are having a GIFT City operation, third point is very active in the merchant — in the merchant turnover, in the derivative markets.

So in our forex desk, we have made it active and as a result — as a result, you are seeing that, whatever is the losses, whatever is the decline in profitability because of the treasury, because of the market, mostly we are covering through our forex operations and all and that is why how we are managing and we’ll continue to do so, because still the margins are available in the business.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

But sir, with the liquidity being sucked by the RBA majors, are you getting some pressure on the liquidity side, because some of your money has got blocked in this foreign — forex forward premium and other things. So will it continue or do you — are you observing any pressure on the liquidity front sir?

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, see, liquidity side, we were comfortable, over LCR is around 142%, this is a one point. Second point is that the way the liquidity has been tightened, the both side we are increasing the rates, either the deposit side and the advanced side and maintaining our margins, maintaining of course, the liquidity is being tightened so as a result what happens is short-term interest rates will increase, but simultaneously the yield has also increased and we are the intermediary, so still we have opportunity to bank money.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

And sir coming towards the recovery side, sir, how comfortable we are as per the target given for the overall recoveries and recovery from written-off accounts and what is the development on the NCLT front and also NARCL front? How much accounts are going, how much money is going, because now NARCL has become very active. So I think any color on that, latest position on that, sir, on the recovery and NARCL — accounts going to NARCL?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So whatever in the beginning of the year we said that, our recovery will be around INR8,000 crores.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Yes.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Right. So in six months, our recovery is INR4,438 crores, so which works out to around 55%, so in the half year 55% remaining we’ll be able to achieve. Likewise in the AUC recovery which we call PWO recovery is around INR1,600 crores of targets as against INR1,000 crores, we are at INR80 crores, INR90 crores or close to INR900 crores, we are again 55%. So target vis-a-vis achievement we are better than this. Going forward since we are recovering around INR2,000 odd crores every quarter, we’ll continue to do so. And from where we are getting strength, because we still have INR24,000 crore of account on NCLT. We are having a compromised pipeline, we are having NARCL as well, and we will do GCL and last quarter also we have done 58,000 of number of compromises as against 39,000 in the Q1. So that way we are focusing on this.

As far as NARCL is concerned sir, around INR5,400 crores of account, they have shown interest which is around 21 accounts and in the four account, we are at an advanced stage, where the amount is around INR500 crores. So we will be getting around 25% or 30% of that account, because this is a challenge will happen and then the exit price will happen.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Yes, you are there in that big six Swiss challenge company also, where against 234 I mean, 438 or something has come from Phoenix, are you there in that account?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah, we are there in that account. We are there —

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Just small observation sir on your notes to the accounts, note number 15, under the COVID-19 framework, the outstanding at INR18,422 crores and NPAs slipped is INR1,190 crores, and recovery is also around INR1,163 crores. So INR16,000 crores is still outstanding there. What is your guess on that — if you look at the same proportion of the recovery in the NPA slipping, I mean, it is almost equal, so far. So going forward, our of the INR16,000 crore outstanding, how much do you think we will slip to the NPA?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So you see the 18,000 basically two-three big accounts the future group and all accounts, they have been restructured and they have been slipped and that is why these NPA numbers are showing higher. If you see the reality, how much has been slipped in the March quarter, how much has been in the June quarter and how much in the September quarter. So September quarter, INR463 crores, is against the June quarter of INR1,094 crores, so it has come down 50%. And prior to that, last year, it is INR1,705 crores, where there is a future group and all. So then — when the slippage is coming down from the restructuring, it gives us the strength that the remaining accounts are standard and will continue.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay. So — but last is on note number —

Operator

Sir, Mr. Ajmera, request you to come back in the queue.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Yes, last Anand, note number 17 sir, under the prudential framework, INR780 crores out of that provision that is write-off, is the non-fund base amount out of total of INR16,017 crore, so how much more is the non-fund base, is that because that is as good as totally going. I mean —

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, Ajmera sir, but the RBI guideline. RBI guideline said that as per the 7th June ’19 circular, you have to make a 35% provision on the exposure. So exposure includes your fund base and non-fund, so the number which you are telling is the INR780 crores is a non-fund where we have made a 35% provision.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay. So total will be INR2,000 crores non-fund — I mean, even if it’s 35% our entire non-fund is provided for?

Shanti Lal Jain — Managing Director and Chief Executive Officer

1,780 — 35% of which has been provided.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay. All right. So still, I mean, some amount still left there?

Shanti Lal Jain — Managing Director and Chief Executive Officer

[Speech Overlap] accounts are standard sir, account are standard so which is going on, so guarantees are, which we’re — suppose you have given guarantee of one year, two year, three year, it will continue know?

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Yes, of course.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Unless, guarantees are against performance, guarantees are against bid bond, so you can’t say the entire will come.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay. Thank you, sir, for this round. If time permits, and Anand allows me, I will come back again.

Unidentified Speaker —

Yes. Thank you, Mr. Ajmera. Next question, we have from Gaurav. Gaurav, please unmute yourself.

Unidentified Participant — — Analyst

Hello, sir. Thank you so much for the opportunity and congratulations on very good set of results. Sir, firstly on the asset quality whatever numbers we have disclosed, they seem to point out a very good healthy underlying recovery in all the assets that we own. But sir, two, three quarters back, we used to disclose SMA 1 and SMA 2 for the entire portfolio, which we changed to above INR5 crore book. And it would be very great for all of us to understand how the recovery or how the performance of that portfolio is moving which is below INR5 crores book. So if you could share SMA 1 plus 2 the combined figure or individual figure for the entire book that will give us a lot of comfort.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So, actually in line with the industry trend, we have started showing this INR5 crores and above. But you see we are also showing the collection efficiencies, so collection efficiency is 95%. So from there also, you can make out, because we are seeing the collection efficiency separately for retail, Agri, MSME and corporate. In fact, this number has come down from 0.61% to 0.5%.

Unidentified Participant — — Analyst

Sir, what has come down from 0.6 [Phonetic] to 0.5 —

Shanti Lal Jain — Managing Director and Chief Executive Officer

This INR5 crore and above, SMA 1 and 2 which was around 0.61% in the June quarter has come down to 0.5 in the September quarter.

Unidentified Participant — — Analyst

Yes, sir, that is for the above INR5 crores, right, which you have anyways disclosed, I’m talking about the below INR5 crore, which was INR18,000 crore at the end of December 2021. So any subjective indication would be really helpful, whether this 18 has moved to 15 or it has been same or it has gone to 20 —

Shanti Lal Jain — Managing Director and Chief Executive Officer

When your collection efficiency is improving, it should come down as well.

Unidentified Participant — — Analyst

Okay, great. And sir on the provisioning side, the current run rate of around INR2,000 crore, INR2,200 crore, do you expect this to continue for another two quarters or so or you expect this to come down substantially now that you know there’s a very healthy performance across your advances?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So our net NPAs has remained INR6,000 crores, right.

Unidentified Participant — — Analyst

Yes.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So that is 1.5%. And so our credit cost was around 2.01%, so going forward, I’m expecting that our credit costs should come down from the 2%.

Unidentified Participant — — Analyst

So for this financial year, you are expecting it to be at 2%, right.

Shanti Lal Jain — Managing Director and Chief Executive Officer

It should be less than 2%.

Unidentified Participant — — Analyst

Okay. And sir, for what next year FY ’24?

Shanti Lal Jain — Managing Director and Chief Executive Officer

That [Indecipherable] on 31st March, based on the available numbers. Otherwise, the INR6,000 crores, is not a big amount considering our operating profit of INR3,600 crores of one quarter.

Unidentified Participant — — Analyst

6,000 or 8,000 —

Shanti Lal Jain — Managing Director and Chief Executive Officer

How the portfolio will behave, then only we’ll be able to tell, but maybe on —

Unidentified Participant — — Analyst

So, is that 6,000 or is that 8,000 because current run rate seems to pointed that the number will be INR8,000 crore for FY ’23.

Shanti Lal Jain — Managing Director and Chief Executive Officer

But I’m talking about the net NPA.

Unidentified Participant — — Analyst

Okay, okay. And sir in terms of —

Shanti Lal Jain — Managing Director and Chief Executive Officer

So remaining amount which is to be provided.

Unidentified Participant — — Analyst

Okay. So INR6,000 crore sir, that you can provide in three quarters itself but it’s —

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, that I can’t say.

Unidentified Participant — — Analyst

Okay.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Because this is dynamic position, this business.

Unidentified Participant — — Analyst

Okay, sir. Okay. And sir in terms of —

Shanti Lal Jain — Managing Director and Chief Executive Officer

[Speech Overlap]

Unidentified Participant — — Analyst

Yeah. And sir in terms of loan growth, do you still intend to grow your book at 10% plus minus 2% or 12% or 8% or you would like to rephrase it to higher number?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So the point is that, you see the 14% but because we are a retail bank 62% of our book is retail and the margins are also there, that’s the healthy margin, so we’ll continue to grow 12%, 13% in the RAM sector, but overall in corporate what happens because of the — some of the corporate, the interest rates are not making sense from the risk-reward point of view. So we will continue to remain selective, we’ll continue to remain choosy, because we should get a good margin over that. So that is why I told that 12% plus, minus 2%. If there is opportunity in the credit substitute, we move to credit substitute, but at the end of the day, we should get a good margin.

Unidentified Participant — — Analyst

Okay. So I thought it is 10% plus-minus 2% now it is 12% plus minus —

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, no, 12% plus minus 2%. So everything is based on the margin available. You can grow also, but ultimately you should get a margin, you have some PSLC obligation but because we are — PSLC also we are selling — so from the risk-reward point of view it should make sense.

Unidentified Participant — — Analyst

Okay, okay. Thank you so much, sir. All the best.

Anand Dama — Emkay Global Financial Services — Analyst

Yeah, thank you, Gaurav. So next question we have no Rajesh. Rajesh, please go ahead. Rajesh, please unmute yourself.

Unidentified Participant — — Analyst

Hi, sir. I have few questions. The first question is can you just clarify, there is a talk about wage agreement revision, if yes what can be the impact of that and by when we can see some clarity on that?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Wage revision, we’ll do from November 1, 2022, so it is not yet due. But we will — we have to make some provisions from the December and the March quarter, because this is a way every time we used to make provisions. So this time also we’ll make provision based on estimate, but the negotiation has not yet started.

Unidentified Participant — — Analyst

Okay. So last time this provision was made in which year?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Every year based on — every quarter we used to make.

Unidentified Participant — — Analyst

Okay. So basically, so you’re saying that even in the FY ’22, there was a wage revision and then what was the actual — can you just tell me what was last three, five years trends if any?

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, negotiation has not yet started sir. So based on the negotiation, based on the demand, we will make out estimates what can be the increase and based on that, we’ll factor in.

Unidentified Participant — — Analyst

No, my question is when was the last revision?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Last revision was on ’17.

Unidentified Participant — — Analyst

2017 okay.

Shanti Lal Jain — Managing Director and Chief Executive Officer

First, November ’17 and every five years it happens.

Unidentified Participant — — Analyst

Understood. And then from November 2017, in the last five years, it means, what has been the actual increase?

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, past November ’17, actually last time around 10% or 12% of the raise has been given. So it depends — it depends what is the current rate —

Unidentified Participant — — Analyst

You mean on an annualized basis, 10% to 12% hike what you’re talking about or the total 10% more volumes?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah, 10% on an annualized basis only. That was the last time to my mind. Actually, I’ll go back and check, but this was the increment. So, depends — depends, actually what is the demand, where you stand.

Unidentified Participant — — Analyst

Okay. And so from third quarter onwards, therefore, you start making provision assuming some estimates, am I right? —

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah, assuming some estimates, so that when the actual settlement will take place, we have a provision.

Unidentified Participant — — Analyst

Understood. And our cost-to-income ratio, how do you see your cost-to-income ratio over for full-year and for the next year?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So you see our cost-to-income ratio was 41% or 44%, right. So cost-to-income two major factors is NII we are growing 15%, 18% absolutely no issue. In other income because of the treasury, it gets fluctuated, otherwise expenditures are under control. So this should be in the range of which we are in, not substantial dividend sir.

Unidentified Participant — — Analyst

So are you saying that your cost-to-income ratio — because if I look at your total operating expenses for the quarter, it is about 34% [Phonetic] so are you seeing the operating expenses on a full-year basis also we should assume roughly about — say last year was about INR11,000 crores, which should assume about 5%, 6% increase every year, are you trying to hint that?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah, in normal situation, half year, it has grown by 4%, right.

Unidentified Participant — — Analyst

Yes.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So that we can — this estimates you can make, sir. Because I’ve given all information to you.

Unidentified Participant — — Analyst

Yeah, that should [Indecipherable] because on operating expense, beyond that we don’t have any further —

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, expenditures are under control, sir. Expenditures are under control and the way if this is growing, naturally NII should grow.

Unidentified Participant — — Analyst

Okay. And my last question is on incremental basis, what is our CD ratio?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So you see it was around 70% in September — at March it was around 72% — it is 74% today.

Unidentified Participant — — Analyst

Okay, okay. Got it. So in incremental, it would be about what 85, 99 kind of thing.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Because, the point is that, what kind of liquidity you are having, based on that only, you take all that.

Unidentified Participant — — Analyst

Yeah, correct. So by when you think probably you may need equity infusion?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So presently, our capital adequacy is around 17% — 16.15% which we disclose and half year profit 0.77% — 16 point — so presently we are adequately capitalized sir. So even though we have shareholders approval in everything, so we’ll take a call if the opportunity so arise. Otherwise presently we are comfortable.

Unidentified Participant — — Analyst

No, no, there’s no doubt at 16% you are comfortable. My question to you is sir, at what capital adequacy ratio you think you will need to raise capital to fund your future growth?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Okay, okay, understood. So point is that, 11.5% is a minimum requirement, right. So 12% — 1% you can have over and above the minimum requirement. So 12.5% or 13% is the minimum level where we should — where we should go for resi capital. That is how we got the opportunity.

Unidentified Participant — — Analyst

So basically if you’re —

Shanti Lal Jain — Managing Director and Chief Executive Officer

And one more point is that, second is upon the — generation point of view so when you are generating the six months, you have generated INR2,400 crores, so generation itself is taking care your future needs. So going forward, the requirement of raising capital seems to be less to me, because the generation will take care of everything.

Unidentified Participant — — Analyst

Okay. Thank you.

Anand Dama — Emkay Global Financial Services — Analyst

Yes, Mr. Rajesh, please join back the queue.

Unidentified Participant — — Analyst

Thank you.

Anand Dama — Emkay Global Financial Services — Analyst

Thank you. Yeah, next question we have from Muna [Phonetic]. Please restrict your questions only to two.

Unidentified Participant — — Analyst

Yeah, hi sir, good evening.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Good afternoon.

Unidentified Participant — — Analyst

Yeah, good afternoon. So firstly on the recoveries, you had this quarter, which were pretty strong at INR2,600 crores, are there any one-offs there? Are there any large accounts?

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, one at maybe one or maybe INR200 crores, INR300 crores — NILL, one account INR300 crores.

Unidentified Participant — — Analyst

Sure. And when it comes to the restructured book, so I’m assuming that almost all of it is built by now. So from this current book, what sort of slippages do you expect here on?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So what I told initially, Q1 it was INR1,094 crores, so close to INR1,100 crores, which has come down to 460, 50%, right.

Unidentified Participant — — Analyst

Correct.

Shanti Lal Jain — Managing Director and Chief Executive Officer

And so this gives us the comfort that going forward the pain will be less on this book.

Unidentified Participant — — Analyst

Okay. You don’t have a number in mind that of this maybe 10% —

Shanti Lal Jain — Managing Director and Chief Executive Officer

It is very difficult to say how much will slip. But you see our collection efficiency, it gives us comfort that no, we should not have undue worry on account on that.

Unidentified Participant — — Analyst

Sure. So if we look at Slide 33, where you have given the details of restructuring. This recovery percentage, is that the collection efficiency for each of the portfolios, last column?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Okay. This is a restructuring — recovery in the restructured book of that portfolio. So the due versus collection, okay. So it gives that 90% of the amount we are recovering, this is what you are saying, from the restructured book, yeah.

Unidentified Participant — — Analyst

Okay, sure. And just finally on this restructured, the current outstanding under COVID restructuring is about INR16,000 crore and then there is also this MSME restructuring of another INR2,200 crore, so is there any overlap between the two restructurings?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah, it will be better, it will be, because it is continuing the assets which were under stress naturally after that COVID has come, so some overlapping will be there.

Unidentified Participant — — Analyst

So, is the entire INR2,000 crores sort of also coming in the COVID restructuring or half year —

Shanti Lal Jain — Managing Director and Chief Executive Officer

It may not be entire, so some can be, but we do not have that kind of a duplicate number or otherwise I will calculate it and we’ll provide you.

Unidentified Participant — — Analyst

Yeah. If you could just share the total restructuring including the 2x of any overlaps.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Okay, understood.

Unidentified Participant — — Analyst

And just finally on that tax rate, so we have had fairly low tax rates over the last few quarters and this quarter it was at 22%. So what sort of tax rate do you expect for the full-year?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So what it does, tax provisions, we calculate based on the estimated profitability for the entire financial year. Because tax is to be calculated on a entire financial year. And the benefit which we are getting on account of carry-forward or on account of income tax deductions, under Section 36, Section 177 because rural and all. Considering this, we calculate that tax liability for a full-year and accordingly we provide. So since our profitability is increasing naturally, the incremental part you have to give 25% of the tax, because we are in the new tax regime and therefore, on an average which was 10% in the first quarter has come down to 16%.

Unidentified Participant — — Analyst

Sorry, it has increased to 22% right, the tax rate.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Quarter alone, but — quarter — we are not paying tax.

Unidentified Participant — — Analyst

Okay.

Shanti Lal Jain — Managing Director and Chief Executive Officer

We are paying tax [Speech Overlap].

Unidentified Participant — — Analyst

From H1. Yeah.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So H1. So you calculate on H1.

Unidentified Participant — — Analyst

So 16% is the rate one could assume for the [Speech Overlap].

Shanti Lal Jain — Managing Director and Chief Executive Officer

Near to that, near to that.

Unidentified Participant — — Analyst

It would be higher because of next two quarters better profitability.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Based on the profitability estimates, which we’ve done. So it should be near to that level. Exact amount, of course, will be calculated based on the expense.

Unidentified Participant — — Analyst

Sure. And just one last point on the employee expenses, you’d earlier said that you expect employee expenses of INR6,300 crore to INR6,500 crore for full-year. Now with this additional provisioning that you’re seeing on expected wage revision, could this number be higher from a full-year perspective?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. It can be slightly because — slightly higher because we have to provide for the former [Phonetic] multiples. We make provision on employee benefit based on the FIMMDA rates. So what happened based on the 15 years rate, so rates have slightly come down on 15 years and that — and we discount this is a liability for actuarial valuation. So therefore, there is a still in — slight increase in the salary, this provision part, AS15 part.

Other part of the our [Phonetic] rates are slightly increased because of the DA increase and increase in salaries and all. So going-forward earlier was INR6,700 crores or so number, so it can be near to that level or INR100 crore, INR200 crore plus, minus.

Unidentified Participant — — Analyst

Okay. Sure. Thanks [Indecipherable].

Shanti Lal Jain — Managing Director and Chief Executive Officer

Actually we’ll be able to know based on the actuarial valuation because major part is this.

Unidentified Participant — — Analyst

Sure. Thank you.

Anand Dama — Emkay Global Financial Services — Analyst

Yeah. Thanks [Indecipherable]. Next question we have from Manish. Please unmute yourself and strict maximum to two questions only.

Unidentified Participant — — Analyst

Yeah. Hi thanks for the opportunity. Sir I have just one question. If I look at your priority sector book almost 97% of your NPAs contributed by priority sector loans, which is around — which translates to 20% of GNPA, against public sector peers number of 7% to 8. So the two things here. Do you think we need to revisit our priority sectors strategy number one. And what are the steps are you taking to bring this kind of number down to the industry level, maybe at 7%, 8%. That’s it. Thank you.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. So this — I agree with you. Basically in the priority sector, the NPAs are in KCC, agriculture and the MSME and all. These are the major. So what we are doing is, we are having specific OTS schemes for MSME as well and specific OTS pump — scheme for agriculture. And therefore I told 58,000, 60,000 [Phonetic] of OTS we’ve done in the last quarter, and we will continue to focus on OTS and bring down this outstanding.

Unidentified Participant — — Analyst

So apart from agri, even if I were to look at your MSME segment, there also the number looks pretty high compared to what other public sector bank reports. So if you can also touch about, about that how do you want to bring that part down?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So how can we do the reduction only through OTS because these are the small account, you can’t go to NCLT or any other way. So either the asset sale is a bundle or it’s part of the OTS. In OTS what happens, your haircut is less compared into others. So we will — we have came out with a specific OTS scheme for education loan, for MSME because there also NPAs are high and that [Phonetic] agri loans. So we will be continue to focus through OTS for recovery of these loans.

Unidentified Participant — — Analyst

Sir what is talked about is the collection part. What I want — more interested in understanding is on the underwriting part. So are you doing any changes there?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. I agree. Yeah. I agree. So you’ll see in the agri part, we have grown 9%, but you see in a — 55% is — in agri is a jewel loan, where we are growing 16%, so that NPAs are basically coming in, other than the jewel loan. So there we are, not growing to that extent, we are growing more on that. So from the underwriting point of view, from the education loan also, we’ve entirely change our schemes. Scheme — we are going to the premier institutions, competitive rates [Phonetic], so that also we are focusing on.

Third one in the agri side, we have specifically created 421 branches. We have posted jewel loan champions. We have purchased caratometers right. So we’ve done number of things in the gold loan side not only to boost our portfolio, but also to contain quality. Likewise in SHG, where the NPAs are less and the yield is better, we are focusing in addition — the southern part we are focusing on to the Odisha, Rajasthan, UP. So from underwriting point of view, where the NPAs are more we’re coming out from that and focusing on the area, where margins are better, NPAs are less.

Unidentified Participant — — Analyst

Thanks and all the best, sir.

Anand Dama — Emkay Global Financial Services — Analyst

Yeah. Thank you, Monish. Next question, we have from [Indecipherable]. Please go ahead.

Unidentified Participant — — Analyst

Yeah. Hi sir, thanks for the opportunity. You shared that there was interest reversal on restructured book, which has been capitalized. Can you share the quantum of that?

Shanti Lal Jain — Managing Director and Chief Executive Officer

It should be around INR100 odd crore some, some INR100 crore plus. How much [Speech Overlap] INR115 crore.

Unidentified Participant — — Analyst

Okay. And is there any particular reason it was done in this quarter or whether that, whether it can come in next quarter also in coming quarters also?

Shanti Lal Jain — Managing Director and Chief Executive Officer

No. This we have done basically what happens, this was a peculiar time when the five months moratorium was given and that amount was capitalized as a part of RBI. And but what to do with this capitalized part because they are instalments and everything is based on that capitalized part. So therefore, this amount was capped and this has been — since whatever has been not realized have been reversed.

Unidentified Participant — — Analyst

Okay. So restructured book, which slipped into NPA and whatever interest was accrued earlier that has been reversed?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. Yeah. For the moratorium period, I call it five months, six months period from March to August of ’20.

Unidentified Participant — — Analyst

Okay. And in future, whatever slippage come further from the restructured book some amount might continue in the future as well?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Naturally, naturally whatever is uncollectible.

Unidentified Participant — — Analyst

Sure. And second question is on agri [Speech Overlap]

Shanti Lal Jain — Managing Director and Chief Executive Officer

So point is that now this, major part has been collected. Yeah.

Unidentified Participant — — Analyst

Yeah. Got it. The second question is on agri slippage, so sequentially it has been higher for us. Is it seasonal in nature because for other banks agri slippage typically come in Q1 or Q3?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. What happens, we have major exposure in Vastral, Allahabad, again, [Indecipherable] UP and Bengal right. So that based on the harvesting period the timeline has been fixed in July. So it came in the month of July. and that is why it is higher. Based on the — in the area, where we are exposed more based on that monthly results because the season or harvesting season depends on that particular crop.

Unidentified Participant — — Analyst

So for us like agri slippages will be typically seasonally can be higher in Q2 and Q4. Is that way to look forward?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yes, yes. Yes basically in July and January.

Unidentified Participant — — Analyst

And to previous participant question like COVID [Phonetic] shared 12% to 13% growth, so that is plus-minus 2% that is on RAM or that is on entire portfolio.

Shanti Lal Jain — Managing Director and Chief Executive Officer

That is on entire portfolio.

Unidentified Participant — — Analyst

Okay. Got it.

Shanti Lal Jain — Managing Director and Chief Executive Officer

RAM, we are continuously — RAM, we are continuously growing 12%, 13%.

Unidentified Participant — — Analyst

Right. And in terms of like wage dividend from December onwards, Mike start making some provision. So assuming like a 10% kind of increase in the wages, so what kind of absolute provision we might have to make each quarter.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So that calculation we have yet to do [Indecipherable] because some part is the retirement benefits, some are known part. So that every calculation will be depends on the demands and what can be the sentimental demands.

Unidentified Participant — — Analyst

Okay. Got it. Thanks a lot. Thank you, sir.

Anand Dama — Emkay Global Financial Services — Analyst

Yeah. Thanks [Indecipherable]. Next question, we have from Jack [Phonetic]. Jack, please unmute yourself.

Unidentified Participant — — Analyst

Yeah. Hi good afternoon sir. Sir PCR so we have seen a sharp increase from 75% to 80% this quarter. Is this due to some aging provisions or we have done some accelerated provisioning in this quarter. And how should one look at the PCR going forward do you intend to keep it at 80% or it can actually decline.

Shanti Lal Jain — Managing Director and Chief Executive Officer

That our PCR 91% and for the — other than the PWA it is 75% to 80%. I agree with you. In some of the projects, road projects and all, we have better provision because some of the road projects have gone into arbitration, where the securities — security maybe the issue from the auditor’s point-of-view, in some of that account, we’ve made 100% provisioning. So this is based on the security dilution in the particular [Indecipherable].

Unidentified Participant — — Analyst

Right. And sir, related question is you mentioned in your opening remarks that you are fully compliant on RBI maybe directions on standard assets provisioning, but do you expect any more standard assets provisioning on some of these quasi sovereign — sovereign civil supply discom kind of an account, which have been provided at accelerated basis at other banks.

Shanti Lal Jain — Managing Director and Chief Executive Officer

It depends on in which account, you’re in, what is the position of your account, whether account is performing. And suppose, if it’s a big account what happen, when 1,500 account, current [Phonetic], these are with the various banks — various bank, where the account is SMA 0 or 1 and it has not been, no resolution [Indecipherable]. On those accounts basically 7, June ’19 circular triggers right. So that based on particulars bank’s position, where we are there or not there, we will take the call, sir.

Unidentified Participant — — Analyst

Yeah. So sir you would be knowing right sir, these — that these are five, six accounts and is there any additional standard assets provisioning required for Indian Bank.

Shanti Lal Jain — Managing Director and Chief Executive Officer

No. My point is that you see from the Indian Bank perspective I can tell you, we’re in 62% of retail book, sir, we are RAM book. So we are not having much exposures on bigger accounts that way, that we are a retail bank. So any provision because I will — whatever it comes now, it will not, we will not have undue worry on account of that.

Unidentified Participant — — Analyst

Understood. And last question sir, if I look at your regulatory retail deposits that number as per last quarter is the lowest of all PSU bank by wide margin at around 45%. So have you looked into that, that why is your LCR compliant deposits are such low at 45% versus 60%, 65% at other banks, other PSU banks.

Shanti Lal Jain — Managing Director and Chief Executive Officer

[Indecipherable] CFO, you can answer that. Otherwise, we’ll go — we’ll provide your detail.

Unidentified Participant — — Analyst

Sure, sir. Thank you so much, sir and all the best.

Anand Dama — Emkay Global Financial Services — Analyst

Yeah, Next question, we have from MV Mahesh [Phonetic]. Mahesh, please unmute yourself.

Unidentified Participant — — Analyst

Sir I had just one question. In Slide 6 the foreign loans that you are — that you have in your portfolio if you could just kind of give us a breakup of that particular loan book sir, and the reason.

Shanti Lal Jain — Managing Director and Chief Executive Officer

You are talking about the international book.

Unidentified Participant — — Analyst

Yeah, sir.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. So international book basically around the INR26,000 crores. We are having branches in Singapore, GIFT City and Srilanka. These are the three places. And the credit is basically the syndicated credit, which is a ECB credit, is a trade finance credit and loan to banks for institutions. These are four major credit category, where these loans have been given.

Unidentified Participant — — Analyst

Out of this how much would be let’s say credits given to institutions, which are based out of India sir?

Shanti Lal Jain — Managing Director and Chief Executive Officer

That number we’ll calculate and we’ll provide you, but these are the major four categories.

Unidentified Participant — — Analyst

But just to kind of extend this question any reason why we have chosen to grow this book given that it’s anywhere low-margin business to begin with and if domestic demand is reasonably strong, why bother growing this book.

Shanti Lal Jain — Managing Director and Chief Executive Officer

No. Actually, there’s is margins available on that particular book. That is the reason of growth of this book. So suppose, we are getting a good margin there, they will grow.

Unidentified Participant — — Analyst

But the domestic margins usually are much stronger as compared to the international margins even if you adjust for the cost at which you operate in those branches, just trying to understand, why do this business in the first place.

Shanti Lal Jain — Managing Director and Chief Executive Officer

No. You know what because some of our customer too are having business in India and ours [Indecipherable] as well. So some of the business are to the client here booked in the domestic business and some of the business is booked in the international.

Unidentified Participant — — Analyst

Okay. Perfect. Thanks, sir.

Shanti Lal Jain — Managing Director and Chief Executive Officer

We are — somewhere — somewhere, we’re also giving to some other, suppose we have given them a — as SBLC unit, so that will can discount, so we [Indecipherable] SBLC commission here and we’ll aren’t there also put together it is a good margin.

Unidentified Participant — — Analyst

Okay.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So some margins we are getting on account of commission, some margin you are getting on account of income. So that is a — that what put together give you a good margin to take about.

Unidentified Participant — — Analyst

Maybe just one clarification. What would be the duration that you are running on this book?

Shanti Lal Jain — Managing Director and Chief Executive Officer

So duration maybe less than one year for a major part of the book because trade finance and institutions are less than one.

Unidentified Participant — — Analyst

Okay, sir. Thanks a lot for that.

Shanti Lal Jain — Managing Director and Chief Executive Officer

But indeed — but syndicated credit and — was slightly three years. They are slightly three years syndicated and ECB.

Unidentified Participant — — Analyst

Perfect, sir and useful. Thanks, sir.

Anand Dama — Emkay Global Financial Services — Analyst

Thank you, Mahesh. Next question we have the from Amal [Phonetic]. Amal, please go ahead.

Unidentified Participant — — Analyst

Yeah. Hello sir, hi. Thanks. Sir I just had one question that one of your peer bank CEO said that for state-owned banks the CD ratio peaks at 74% and 75%. So do you agree with that, as in that do up, I mean would this be your peak ratio and beyond this it will be faster deposit growth.

Shanti Lal Jain — Managing Director and Chief Executive Officer

My point is that CD ratios, we are at 70% to 75%, but you see SLR 30%. So ultimately your overall liquidity has to be seen. So if we’re able to grow in a deposit in a — at a competitive pricing, then we can increase our CD ratio. But when you’re having invested book at 30% and the CD this — and the advanced 74%, 75% then ultimately how you manage the balance sheet, are you continue — will you continue to have borrowings. So generally we’re a stable type of banks. So borrowings generally, we take occasionally and we’ll take against the SLRs and all.

Unidentified Participant — — Analyst

Okay. But would you like to increase your CD ratio from your own or how do you view your CD ratio from current levels or would you like to maintain it at this level or it’s not a parameter you would track as such.

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, no. We are tracking. 72% to 74%. We can go even 1%, 2% higher because what happens then we are expecting a credit growth to be 12% and deposit growth to be 7% [Phonetic]. Naturally 1% or 2% it will increase in that situation.

Unidentified Participant — — Analyst

Got it, sir. Thanks a lot. Thank you.

Unidentified Speaker —

[Technical Issues].

Unidentified Participant — — Analyst

No thanks. Thank you. Thanks a lot.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Thank you, Amal [Phonetic].

Unidentified Participant — — Analyst

Thank you.

Anand Dama — Emkay Global Financial Services — Analyst

The next question we have [Technical Issues].

Unidentified Participant — — Analyst

Yeah. Thanks, sir. Couple of questions. So what would be the share of your wholesale deposit in the overall term deposit. The reason I’m asking this question is because if I see your TD number that is on a flat on a o Q-o-Q basis, while CASA has grown, but again, your cost of deposit has increased higher than the peers. So I just wanted to get a sense what would be the share of wholesale deposit in the overall term deposit.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So the cost of deposit is around 4.05 [Phonetic].

Unidentified Participant — — Analyst

Sir, your voice is not clear.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Our cost of deposit is under control. so because just a minute.

Unidentified Participant — — Analyst

Sir, your voice is breaking actually.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So there is not a increase — measured increase in the cost of deposit 3.85 to 4.02 [Phonetic] because the interest rates have Increased, we’ve increased the deposit rates, I told you from March level to this level around 110 bps to 140 bps. So that impact will come, sir. And for sure [Phonetic], the major part of our deposit is in basically a stable deposit.

Unidentified Participant — — Analyst

Okay. What could be the wholesale share in this — in this — in the [Speech Overlap].

Shanti Lal Jain — Managing Director and Chief Executive Officer

Exactly, I don’t know but will not — should not be more because — should not be more because INR70,000 [Phonetic] crore to…

Unidentified Participant — — Analyst

Sir, your voice is not clear.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Maybe — maybe INR70,000 crores. So maybe around 10%, 11%. So INR70,000 crore, so you can say 12%, 13% because INR6 [Phonetic] lakh crore of deposit we’re having.

Unidentified Participant — — Analyst

Okay. Okay, sir.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Are you getting my voice.

Unidentified Participant — — Analyst

Yeah. Yeah, sir. I am getting. Understood, sir. The second question is sir, on the restructured book. So I mean out of the INR16,000 crore, how much of the book has come out of moratorium and how much is still under moratorium, if you can mention that?

Shanti Lal Jain — Managing Director and Chief Executive Officer

No, major part of it has come down, sir, and come out of moratorium.

Unidentified Participant — — Analyst

Okay. Sir then…

Unidentified Participant — — Analyst

And then the recovery — recovery percentage and everything.

Unidentified Participant — — Analyst

Understood, sir.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Right, sir. Already one year is passed. One year is passed.

Unidentified Participant — — Analyst

Okay. Understood, sir. The question is then on the Slide number 33, where you have given the disclosure on the restructured book here in the column it is mentioned there is some additional funding to this restructured book. So if you can just explain what is the additional funding, that would be great.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Sir what happens, we’re having term loan, we’re having cash credit and yield [Phonetic] as well. So what happens based on the availment on that particular day, it is a part of — it is a part of additional availment or anything our interest, and sir, their interest also debited on the last day, the servicing of interest. So all these factors, considering this, this is a major position, as on particular day.

Unidentified Participant — — Analyst

Okay. Understood. Last two questions, sir. If you can disclose the ECLGS number what will be the total outstanding ECLGS and how much NPAs you have on that book.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Okay. We in fact, but we have INR11,004 crore of ECLGS we have given. Current outstanding is INR6,500 crores and the NPA number is around 300 [Phonetic] only. So you get 3% of the total ECLGS we’ve given is a NPA in that.

Unidentified Participant — — Analyst

Sorry, sir, I missed the NPA number if you can repeat?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Around 300 [Phonetic] exact amount 300 [Phonetic] something, which are 300 some amount — 370 [Phonetic] or some amount, 360 [Phonetic], 363 [Phonetic].

Unidentified Participant — — Analyst

Okay. Okay sir. I understood.And then last question sir, you mentioned couple of interest reversal during the call, one is on the average slippages; one is on the restructured loans and all that. If you can mention the cumulative total interest reversal in 2Q and the similar number for 1Q. That would be great. Yeah. that is all from my side.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So my CFO, will tell you. What is the total interest reversal in the second quarter.

Unidentified Speaker —

There is a total reversal of INR230 crore that [Indecipherable] interest reversal of which is kind of INR115 [Phonetic] crore because of COVID moratorium.

Shanti Lal Jain — Managing Director and Chief Executive Officer

What is the total reversal that is the point?

Unidentified Speaker —

Total is about — to my mind 4 into [Phonetic] 260 [Phonetic] plus 115 [Phonetic], plus others, so around INR400 odd crore should be around 260 [Phonetic] plus 115 [Phonetic], 375 [Phonetic] plus spot. So it should be around INR400 crore.

Unidentified Participant — — Analyst

Okay. And the similar number for 1Q would be, I mean approx ballpark number.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Similar number of the last quarter can be INR100 crores. It cannot be more than that. Last quarter, it is INR100 [Phonetic] odd crores.

Unidentified Participant — — Analyst

Understood, sir. Thank you so much.

Anand Dama — Emkay Global Financial Services — Analyst

Yeah. Thank you, Suraj [Phonetic]. Next question, we have from Mr. Ashok Ajmera.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Yes, sir, thanks for giving the opportunity again. Sir in our non-SLR book, INR37,199 crores. There is INR1,034 crore of security receipts, SRs. So I believe that SR is 100% provided for.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. It is [Speech Overlap].

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

So is it, it would be gross figure, net figure or net of provided for.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Super [Indecipherable]. The SR guidelines from Reserve Bank of India, when you take an SR and whatever provision, you are having in your book is to be netted off and remaining you have to do mark-to-market on a invest treasury book. So this INR1,034 crore remaining amount is fully provided, sir.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Fully…

Shanti Lal Jain — Managing Director and Chief Executive Officer

Provided. Because in the notes to the account we’ve mentioned that we have 100%.

Unidentified Speaker —

It is fully — SR is fully provided. All this account, big, big account are now fully provided here. Pension is fully provided.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay. So it is net-net…

Shanti Lal Jain — Managing Director and Chief Executive Officer

And the bank is — bank is not amortizing the forward provisioning [Indecipherable] and everything. Everything is taken care here.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

And one item of the share of PSU corporate and other, shares means, it is equity shares because that’s a share of PSU corporate and others in the non-SLR. Does it mean that equity shares?

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. It is equity shares. Because there is — in treasury, we keep on purchasing.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Yeah. I mean, only little. I mean it is misnomer, share of [Speech Overlap] shares or equity shares or…

Shanti Lal Jain — Managing Director and Chief Executive Officer

Our share of can be in our three RRVs. If I can tell you three RRVs and all three RRVs are having net NPA zero, sir and a profit of INR359 crore in the six months. So all my RRVs are basically NPA free that way. So that share can be there. So I can tell you in the half year ended, these RRVs have put together have a profit of INR394 crore as against INR283 crore of the last and growth of 39% [Phonetic] in profitability. And all the three RRVs are doing good.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

And what about [Speech Overlap] what about your two major subsidiaries, they are also doing well.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Yeah. This sorry — Universal Sompo has given dividend to us [Phonetic] as well and doing good profit.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay, sir. So now — sir, is there any guidance on your — our credit cost is little higher at 2.01 [Phonetic] as against 2.03 [Phonetic].

Shanti Lal Jain — Managing Director and Chief Executive Officer

So yeah credit cost should come down from that — is less than 2% sir.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Less than 2% or less than 1.5%.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Less than 2% includes less than 1.5% as well.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay, sir.

Shanti Lal Jain — Managing Director and Chief Executive Officer

It will be less than that.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Sir, Our NBFC portfolio exposure is around 14% as I see. What are our views on the lending through NBFCs through onward lending as well as co-lending and a tie-up with the NBFCs for increasing our reach to the lower strata of the society, sir.

Unidentified Speaker —

So what — our NBFCs — 99% of the — our NBFCs is A and above. So that is the one part. Second we had done tie-up with number of NBFCs for co-lending and we are having co-lending exposures as well. We have done co-lending for education loan. We have done co-lending for MSME loan. We have done co-lending even for the gold loan, wherever we are not having access or there is NBFCs are doing gold loans or — and deposit it in gold with us at the end of the day. So the securities is with us. So we have done number of co-lending tie-up with NBFCs.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

And I believe that is the 20-80 [Phonetic] proportion.

Unidentified Speaker —

Right. [Indecipherable].

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

And what is the total approximate exposure there in co-lending.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Maybe around — maybe around 1,000 [Phonetic] plus, sir, because cyber-SMEs also there, retail is also there, exactly should be that 1,000 [Phonetic] plus.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

INR1,000 crore. Okay, sir. Now, sir…

Shanti Lal Jain — Managing Director and Chief Executive Officer

Thank you.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Going forward, sir, you see, I’ll start with my first question on the — that overall in India the things are looking good, most of the public sector bank for the first time in the last quarter and this quarter have done comparatively better than what was originally expected from them in spite of all the pressures and the global turmoils, Ukraine-Russia war. And so according to you, you are a very senior banker forget about only business of your bank, your size, but otherwise you handled very, very big, I mean bank like Bank of Baroda also. So I mean, what is your opinion sir, or — on going forward especially for Indian public sector banks that where are we going from here. I mean is there any still, there are some hiccups, there can be some problem, there can be some chunky accounts coming in again, are there can be some pressure on the recoveries, SMA-2 number going up or slipping to NPA or here onward, we will have a comparatively smooth sailing, sir.

Shanti Lal Jain — Managing Director and Chief Executive Officer

So from the public sector bank space, I can tell you that all banks are first adequately capitalized. Second, adequately covered also. The PCR of the all public sector banks are ranging between 85% to 90%-plus. So that’s fully, fully covered. And whatever recovery will come, come either will come as a part of PWR recovery or major recovery. So capital wise they are fully covered. Then that provision wise, they are fully covered. This is the second part.

And the third one, what with this size you see the all public sector banks are growing, are growing in double-digits, are growing in double-digit, are having good franchise, getting good CASA. So that their cost of deposit will continue to build a war [Phonetic]. And then, you’re not having a provisioning, but naturally really your spread will be higher and cost of all banks are controlled and all down there [Phonetic], they are doing lot of digitization. Each bank is doing digitization. Government of India is also having the easy reforms, where number of things are improving, best practices are coming, whether it is in HR, whether it is in the technology, whether it is in MSME, all sectors look basically all banks are improving their performance, productivity and all.

So then their cost will be under control, provisioning risk is not there and they also learn from the experience as well. You’ll see the corporate book of any of these public sector banks, hardly any stress or stress is a very — now [Phonetic], which is manageable. So going forward, this as a group, they should perform better, sir.

Ashok Ajmera — Ajcon Global Services Ltd — Analyst

Okay, sir. Thanks. Thank you very much, and even your treasury is also doing comparatively better in fact in spite of all these pressures. Congratulations and compliments to all of you and all the best for future, sir. [Indecipherable] really the chartered accountant and you’re definitely handling this bank very well and thank you, Anand for giving me opportunity twice for such a long time. Thank you.

Anand Dama — Emkay Global Financial Services — Analyst

Thank you, sir. Yeah. Sir — sir, last question and I have is basically touching up on the same standard asset provisioning stuff. So what is our exposure to FCI, that’s Food Corporation of India.

Shanti Lal Jain — Managing Director and Chief Executive Officer

No. It is account specific. Anand ji, we don’t discuss account specific issues, unless it becomes NPA and otherwise all standard accounts.

Anand Dama — Emkay Global Financial Services — Analyst

Okay.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Account specific discussion.

Anand Dama — Emkay Global Financial Services — Analyst

Sure, sir. That’s it from our side. You have any closing comments to make.

Shanti Lal Jain — Managing Director and Chief Executive Officer

No. Thank you. Thank you all the investors, analysts for your insightful discussions, and your discussion will help us and will in fact, guide us for taking a better decision. Thank you, once again. And kindly continue to support us, Thank you.

Unidentified Speaker —

Thank you.

Anand Dama — Emkay Global Financial Services — Analyst

Yeah. Thank you, all. Thanks for participants. That’s it. We will close the call now.

Shanti Lal Jain — Managing Director and Chief Executive Officer

Thank you.

Unidentified Speaker —

Thank you.

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