Jana Small Finance Bank Ltd (NSE: JSFB) Q4 2026 Earnings Call dated Apr. 29, 2026
Corporate Participants:
Ajay Kanwal — Chief Executive Officer
Krishnan Subramania Raman — Executive Director and Head, Retail Financial Services
Analysts:
Sanjana Faujdar — Analyst
Varun Shivram — Analyst
Chaitya Shah — Analyst
Viral Mehta — Analyst
Rohit Rokde — Analyst
Suraj Shinde — Analyst
Presentation:
Operator
Sam. Foreign. Ladies and gentlemen, good day and welcome to the Jenna Small Finance Bank Limited Q4FY26 earnings conference call hosted by Nuama wealth and Investment Limited. As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Sanjana Fojdar from Nuama wealth and Investment Limited. Thank you. And over to you ma’. Am.
Sanjana Faujdar — Analyst
Thanks Yusuf. Good evening everyone and welcome to the Q4 and FY26 results conference call of Jena Small Finance Bank. We at Nirama sincerely thank the management team for giving us the opportunity to host this call from the management. We are joined by Mr. Ajay Kandar, Managing Director and the CEO Mr. K.S. raman, Executive Director Mr. Abhilash Sander, CFO along with the other members of the senior leadership team.
I would now like to invite Mr. Kanwar to share his opening remarks following which we will open the floor for Q and A. Over to you sir. Thank you so much.
Ajay Kanwal — Chief Executive Officer
Thank you so much. Good evening and a warm welcome to everyone. I will refer to the presentation which has been uploaded and I will be referring to specific page numbers so we can all be aligned. Let me start by page number three. Last quarter we had given specific guidance what to expect this quarter both on pad credit cost and slippages. I’m very happy to report that we have met all the guidances that we had given for Q4. When we had declared the Q3 results the first one was PAT. We said we’ll do PAT at 140 to 160. We have come at 140. Our net credit cost is at 156. The gross cost is at 192 which is pretty much there. And SMA we said will come below 4 and we are at 3.66% so all of them are met. Now let’s look at the Q4 numbers with a clear. Expectation of how the whole stress in MFI is behind us. We had signaled that very clearly in Q3 and you can see Q4 being a clear demonstrable quarter for that. So let me start with I’m on page three. The SMA for March 26 is lower than even March 2024 at 3.66% versus 3.99%.
So we are exiting the stress period with a better SMA book than when we started with the slippages roughly about 334 crores are the lowest since the first quarter of 2020 like April to June quarter 25. So in the last eight quarters this is the nearly the one of the lowest slippages. So again slippages back to where it should have been if there was no stress. We can see that in quarter four our net credit cost which was 0.79% for the quarter is down to 0.47%. Importantly received sustaining. So slippage is one of the lowest now among the last eight quarters. SMA lower than we entered the crisis and net credit cost sustainably at low. So I think from a what is the cost of credit? I think we’ve got a reasonably good handle now.
Now very importantly is to see how we’re doing on the growth side because the quality side is very clear. Assets have grown 23% year on year. Secured assets have grown 28%. We’ll go into the details later but 23% is very strong growth. Unsecured book under the guarantee program has grown as now is about 77% which being 77% of all future NPAs will be covered in terms of expectation of receiving monies from the CGMFU stroke CGT MSC programs. Our deposit book has also grown very healthy at 23% and the cost of deposits have dropped by 20bps in quarter four itself versus quarter three. If you take the full year the drop is about 50bps. Now as we all know quarter four is when the deposit pricing is amongst the highest and we have seen that quarter four we have obviously been pricing it lower so one should expect that quarter one of this financial year it.
Should probably see another moderation of cost of funds too. Up at 140 crores. And I would like to draw attention the right hand side because that chart is the right chart where you can see cost of funds is declining. The net interest margin is growing. It is growing more than the cost of funds decline purely because less interest in suspense. And of course a very strong and robust asset growth. I will now move on to page four. Now these are the key highlights. First like I mentioned, deposits now at 35,784 crores. 23% growth in FY26. Cost of funds down to 7.46. We began with 8.03% in quarter 4 FY25 secured assets. As we all know that we have been moving towards 8020 secured unsecured asset mix. That’s been our direction for the last eight years. We have grown 28% year on year. 9% in the quarter itself. Our secured book now stands at 72.6%. I will show you the assets in detail in the further slides. We were at the highest ever in our history of disbursements in quarter four. 5372 crores in secured disbursements.
Interestingly, while December we began what was the best December ever in unsecured. The best quarter in unsecured in eight years was this quarter which is quarter four portfolio grew 10%. It actually helped grow the year on year growth to 8.5. We did the highest ever disbursement in quarter four. Highest ever means highest ever in eight years of 25, 22 crores which is a 24% growth. Quarter on quarter. And as I mentioned slippages are down. Our strategy of ensuring that we put the book under credit guarantee program hasn’t changed which is why the total guarantee program is at 77%. I would also like to mention that there has been a growth in cost. These are specific areas where we have seen a growth. But we are primed for operating leverage because we have used last year to really grow some of the areas which will provide greater benefit this year. First one is of course the guarantee program cost has costed us 55 crores. It will result in benefit of a recovery from NPA from the guarantee programs in the future. Higher disbursement is less to a cost of 77 crores.
See when we give commissions for any disbursement whether it is a vendor payment for a valuation or a DSA commission or any legal cost, they are all born upfront. They are not amortized over the period of the loan. That cost is 77 crores. So yes cost is higher by 77 but we will see the benefit of interest income in the in this year itself some of the areas needed investment collections, used car growth that’s seen a 55% 55 crores sorry of cost growth. And of course the new wage code which is applicable to all has costed us 12 crores. So these are the big ones we have done this year so that we can build the momentum as we go into this year into the into the current financial year and we will see the benefit of these expenses. Obviously we don’t have the same investment expectation this year so cost growth will taper off significantly from the current the last financial year as compared to the last financial year. So this financial will be a much lower cost run rate. I’ll move on to page number five and this is the important page.
So first page was around slippages SMA followed by our growth in this in asset and deposits the strong Q4 and this is about the gross NPA. You can read here a credit cost for quarter 4195 less recoveries which is under other income starting this time. We’ve also started mentioning this specifically in A, P and L because I think when we do credit cost so that we don’t end up with different numbers we have specifically mentioned it right here itself. So Net credit cost is 156 at 0.47 at gross NP at 2.33% net NP at 0.87. Our additions to gross NPA has been at 334. The lowest was at Q1 FY25 before this which was about 324. So nearly about there. We are comfortable with how we are entering the new the current financial year with our credit portfolio health.
I’ll move on to page number six. It basically on the left hand side gives you the state which shows there is really a broad non concentrated distribution of branches. You will find the same true in the way we do assets and liabilities too on the expansion plans. We have finished 80 branches in the last financial year which is FY26. I just want to show you how we have spent that or how we built it. 12 branches are absolutely new split branches. Size of branch becomes big, we have to split them. Largely led by MFI growth. That’s 26. An existing branch is relocated to better spots to help liability growth as well as affordable housing. That’s 42 in terms of cost really it is a split branches and new branches which are really fresh. Cost relocations are incremental cost only because existing branches do have cost. Relocation makes costs higher but they’re not absolutely 100% new. Our FY27 plan is to take the same by another 78 branches. 40 will be relocation so they will not be addition to number of branches. 30 branches will split, 8 will be new. So 38 branches will get added. As we go to next year we are finishing at 822 so expect that to be at 860 branches next year. New products credit line on UPI being tested right now with staff loans against shares and mutual funds. Create an FX as we go live with our 81 license. That’s broadly the plan for product launches and branches for next year.
I’ll now move on to page number eight and you will see here our biggest product is affordable housing. 8174 crores. Average ticket size 12.7 lakhs. Second highest secured product is Microlab. 6006300 crores is 6.7 lakhs. Then MSME loans at 5281. Term loans to NBFC at 1935. Strong growth in vehicle loans which includes two wheeler and used cars which has been an addition last year which has grown at 79.6%. And gold loans just like the industry, Gold loan is doing extremely well. And now the book stands at 2,358 crores 140% growth from last year. Others basically is ODFD. Some DA, some employee loans. We’ve seen a drop in ODFD of a large customer which is why you can see others at negative 43%. But it has no real impact. From a NIM perspective our total secured loan stands at 26,332 crores. Our unsecured book really has 9,674 crores. As unsecured advances it has grown at 10% in the fourth quarter. That’s helped year on year growth of 8.5. We are very happy with the growth in terms of how it’s performing and we’ll talk about it from in the next page itself.
And it’s very good news because not only has the collections come back but we’ve also seen very robust disbursements it probably points out that there are less players in the market. Than they were before the stress began because fundamentally our branches haven’t changed number of people in sales haven’t changed in unsecured yet. We’ve seen such a strong growth which has been our highest ever. It does point out to some unmet demand and so the available players are obviously getting bigger benefit than they probably would have got if, you know, had all players come back. So that does point out to probably an advantage period till other players really come back. I want to go to page number nine is important page. It talks about our unsecured book. 77.1% of book is under guarantee program. I already told you that we paid 55 crores in FY26. They paid roughly about 2526 crores in the previous financial year where 77.1% is covered for any event risk which may arise. As of now, this book has a net NPA of 184 crores which you’ve highlighted there.
Out of the 184 crores of net NPA, 151 crores is under the guarantee program of which we will receive some of the sums in quarter three this year and some of the monies in quarter three next year. But fair to say that you should expect the 77% of unsecured book through this financial year cross the 90 95% range or rather come to the 19 95% range. The strategy won’t change and we should probably receive our first reasonable size check from the guarantee program quarter three this year. I will also want to Highlight that the BC book has started doing 99% since January 26th. Our own book has been doing 99% plus since December. We are sitting in April now. Tomorrow is the last day I can confirm to you that April will also be 99% for both the B.C. and the bank’s own books. So the trend continues to be healthy. I did want to make a mention of April because last April was a very bad one for us. We were ultra cautious this year and I’m happy to report that that challenge of April last year is not being seen at all in April this year.
I want to move to page number 12. This is our important slide. We always talk about this slide because this is why we do think that the bank has a competitive moat. This is where we will derive more operating leverage and this is where we’ll derive more loyalty farm customers as we. Show you here. Roughly about this is for all the affordable housing micro lab customers. Our average relationship which is active is 4. If you add the property insurance and life insurance you made a mention at the bottom it’ll be 6.3 active products so to say for FY26. And you can see there has been I would say good work across wherever we are short. So I did expect gold to get better from 2.2% penny to reach 2.9. I still think there is enough and more room to go there. We can see a pre approved business loan program at 20%. It’s moved from 18.5. That’s been a positive move. Tubular has gone up to 1.1. I would expect this to be between 5 to 7. So all round growth. CASA balances are lower at 23.8. And we need to do some work here to try and see how we can get a CASA balances higher because they were at 28,000 for the previous year. Key page for us because we do believe that this will stop the balance transfers out and this will really create the one stop shop which is our anchor bank position for a customer base which is the middle of India or as we call it the rising India. I’ll now move to page 14.
This is on cost of funds. So first it shows you our CASA book year on year 22.6 time deposit at 23. We did lose CASA in quarter four at 4.8% loss. Lastly they went through some of the government CASA we had where while we didn’t have any challenges, we were certainly we did see some withdrawals as part of an industry group. We are hoping to capture some of it back as things settle down. But it was a very short notice exit of some of the government led CASA which we couldn’t make it up before March end. Other things which is cost of funds continue to show decline. We would expect one more quarter of decline and then stability after that. Our CD ratio including refinance is at 82.9%. Again 83% of bulk deposits are 1 and above. As we all know our strategy always has been to take longer term deposits and not shorter term deposits. And as you know people who put one year deposits even though they are bulk in nature don’t have a fly by night or a quick exit approach in their mind. So these are very stable deposits for us. And of course 92% of our retail deposits are more than one year. Our LCD is very strong at 1,43%
. And on the right hand side you can see the distribution of geographies. We don’t have any concentration risk on the deposit side either. So on the funding side, we’ve got very good support from. From National Housing bank, from sidb, from nabad. We continue availing those as well as grew our CASA and TV book at a strong 23% growth. I want to move to page 14 next. Sorry, 15 next. And see, while this page is an important page, you’ll find that it’s very difficult to pick up one thing in this page and saying this is the most standout because everything shows how a digital bank is really making terrific progress across the board. So you take it on the left hand side you will see mobile bank registration up 114%, mobile bank transaction up 36% and everything is in large numbers. But for a bank which is an asset and a liability growth of 23% each, which is essentially focused on doing everything digital is normal to expect that this page every quarter will show great growth. And as a country we are blessed with a very strong digital platform. So Even you see UPI, it’s up 67% year on year. I would expect us to keep showing such very strong growth numbers in digital space every passing quarter. I want to now move to page number 16.
I think the important thing to see other than the. So our advances is at 36,289. These are gross advances. 35,784 crores is our deposit base. Our quarter four ROE is at 1.3. Our ROE is at 13% and it does show that this is more like a normal position of the bank. And our book value is at 424crores, 424rupees. That gives you a sense of what a normalized quarter would look for us. I would then move to page 23 so that I leave enough time for questions on page 23. You will see that. Sorry, Sorry. Okay, sorry. The guidance is page 22. So I really wanted to point out page number 22 and not 23 is the guidance for next year which is a gross loan portfolio growth of 19 to 21%, a deposit growth of 23 to 25 and pad year on year should grow at 80% plus. That kind of summarizes all that I had to say. I really want to point out page number 25 before I close. Because it’s just not about quantity and quality. Business Times along with KPMG Judge Jana is the best small finance bank. And that award was given to us in February 2026. And I did want to share this because while yes, we’ve been through a stress period as we are exiting, we are exiting in a very in a healthy position and we would try and make sure that we get this award next year too.
Thank you so much. And I would like to open the call to questions.
Questions and Answers:
Operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask question May Press Star N1 on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star N2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question is from the line of Varun Shivram from Choice Broking. Please go ahead.
Varun Shivram
Hello. Good evening sir. Thank you for the opportunity. So I have two or three questions sir. So first is looking at the name improvement in the unsupported business. So wanted to know does the bank expect any name expansion in the coming upcoming quarters?
Ajay Kanwal
So Varun, you want me to answer this question or you first? Then you will come with the second one. Is that okay?
Varun Shivram
Yeah, sure.
Ajay Kanwal
So. Okay. So see what’s happening on NIM is two things. One is we haven’t seen any customer pricing drop in any of our products. So what we were able to secure from customers as pricing whether it is a micro finance customer or a housing customer or a LAP or msme, we haven’t seen a dip in pricing. What has happened in quarter four is because the slippages have reduced interest in suspense has not increased. So that is one reason why NIM has got better. Second, we have seen a 10% growth in our quarter on quarter on unsecured.
That’s the reason NIM has improved. Now if you extrapolate that to quarter one of this year. In quarter two, we do expect unsecured to keep growing. So yes, that should help NIM grow. We don’t expect slippages to rise. So that should hold back because interim assessment won’t go up. It won’t go decline significantly because we are at a very good spot right now. But that that will not be the reason of NIM increase. We do expect at least one more quarter of cost of deposit decline. So yes, Q1 is. Deposit cost of deposit decline, improvement on Nim due to unsecured and then Q2 will be flattish cost of deposit and still slight improvement Nim because of unsecured growing. And you can expect the same behavior in Q3 and Q4.
Varun Shivram
Okay, sure sir. Thank you so much. So like you elaborated on slippages trend declining. So want to know in the MFI and the unsealed curve whether this trend will continue as well.
Ajay Kanwal
Great. So why don’t I ask Raman who is my rather who’s a banks ed and who runs the microfinance business and he has taken over April last year. He is the reason for this brilliant performance. I would let him answer this question. Thanks.
Krishnan Subramania Raman
Thanks Ajay. So just to give you a little bit of trends. So unsecured slippages were around 150 crores in the fourth quarter. It reduced by about 35% in the quarter and if I compare with a year ago it’s reduced by about 50%. Also the SMA book, if you looked at the first slide of Ajay Zondag decline in the SMA book. So the SMA book has also reduced by about 24% and therefore we do expect the slippages to trend lower during the FY27.
Ajay Kanwal
But I mean just so that we don’t expect to see the decline like deeply steeply because I think we’re reaching a point where it’s kind of steadied up. Correct. And you know, because at 99 plus percent that we collect is only so much growth you will get in SMA and slippages. And like I mentioned earlier, our biggest pump. I would say last year was not a great April. But Today sitting on 29th of April I can say we are very very different from last year. We will cross the 99% in our unsecured MFI business. Our secured businesses are doing very well again would cross 99% in all of those. We’re specifically focused on doing collections in April this year. So I can show slippage in sma. We are very confident now.
Varun Shivram
Okay, sure. Based on that like are we seeing any stress signals on segments like SME or Micro Lab or any housing portfolio side.
Ajay Kanwal
So listen one is the only slide worry we had was on Microlab and if you see a page, just give me a second. If you see our asset page which is page 8. So microlab varun last year grew year on year only 9.4%. It was the weakest growth amongst all our secured assets. So consciously we did some tightening across a few geographies, et cetera. We are very comfortable with it. We don’t see and I think because we went slow last year, we were able to kind of make sure that nothing that would possibly have slipped has arrived. And whatever we had to kind of collect harder we have done. We are not seeing any signs here. We’re very watchful on MSME on you know what happens with any spillover effects of the Middle east war. Nothing is visible to us, but it’s unlikely nothing will impact us right now. Impact is unclear. We’re very watchful, we’re very careful. But yeah, so that is the only thing on MSME I’ll be a bit more watchful. Other than that existing book, I can’t see any sign which should change our thinking on SMA or slippages.
Varun Shivram
Okay, so last question from my end. What is your outlook on the credit cost percentage for the coming year and do we see any additional provisioning requirement for the same?
Ajay Kanwal
So listen, we are not giving specific guidance on credit cost for next year but if you take a quarter four number of 0.47 which is a net credit cost which is on page number five, I think that should give you a good signal of what one should expect. I would probably urge you to view that you will be in the same range or slightly better at best.
Varun Shivram
Sure sir, thank you so much for the opportunity.
Ajay Kanwal
Thank you Varun.
Operator
Thank you. Next question is from the line of Chetya from Incred Equities. Please go ahead.
Chaitya Shah
Hello. Thank you sir, for the opportunity. I had just a couple of questions. The first one is like the gold loan book has seen good growth this year. So does the yield on the same is at par with the pure play gold.
Ajay Kanwal
See, our ticket size tends to be closer to 2 lakh rupees. So for that pricing, yes, our gold yields are as competitive as the similar yields in the market. So it’s higher than of course most nationalized banks I would say. But it’s not as high as the large NBFCs who are gold specialists because our ticket size is a bit more different. Secondly, I do think our opportunity in gold loans which we need to do more of, these are smaller ticket high yielding gold loans. I think we have been less focused on it because the large volume. Force of our microfinance business, which could have really cross sold gold in any significant way, has been overtly busy in collections. I think now that collections are steady State with 99% achieving much earlier before the month ends. Now I do expect that this year our yields will improve in gold as more smaller ticket customers essentially from the microfinance cross sell will make their appearance. So to answer your question, we are competitively positioned in terms of what customer yields there are. I would expect improvement in yields in gold in the coming financial year.
Chaitya Shah
Okay. Okay. So the next question that I want to ask is on the MFI segment, what is the percentage of growth are we expecting for the FY27?
Ajay Kanwal
I will let Raman answer that.
Krishnan Subramania Raman
Thanks, Ajay. As you’re aware, I think last few quarters there was a stress. I mean in the 24th of March we used to be at about 10,000 crores and that had come down to 9,700 crores in 8,900 crores in March 25th. Now it’s steadily gone up roughly about 10%. But as we speak we’re still below March 24th. Strategically, our focus continues to remain on growing secured faster. The secured book will grow by 25 to 30% and unsecured book is expected to grow by about 10 to 12%. So that’s really the expectation over the next year or so.
Chaitya Shah
Okay. The third question I want to ask is when do we plan to reapply for the universal banking and what are the chances of getting it approved this time and do we have any impact on evaluation and growth trajectory if it, if the application is delayed? Something like that. Yeah.
Ajay Kanwal
So yes, now that our results are out, we would get back to, you know, working on resubmitting the application. I think that is what was in our mind because we needed the audited results to be completed and we have maintained the gross NPA of 3 and 1% at least. These are not the approval criteria, but these are the gating criteria for an application. We are diversified. We continue diversified. So we do think we probably meet that criteria. But yes, the work to resubmit the application will start now. You know, the reason we wanted to apply for a universal bank was largely from a liability book position. We thought the velocity of deposits and the cost of deposit will improve as we change our name and drop the word small finance. We have not built that into our financials either. For this year for sure and certainly for next year because whether we get. Universal or not, we still think we have a strong business case in our numbers. So when we are giving you the guidance for next year, which is a 80% growth in PAT over this year, it doesn’t have an any, any impact of universal bank in the numbers.
Chaitya Shah
Okay. And the last question I ask is regarding CASA. So I any growth are we expecting for FY27?
Ajay Kanwal
See so CASA last year you know we were in like a real super position till Q3. Unfortunately for Q4, some of the government casta went away too short a time to recover. But if you just say even in spite of the quarter 4 hiccup, you know where we lost about 8% quarter on quarter, we still did a year on year growth in casa of 22.6%. Had it not been for the last quarter, it probably would be more like 27 to 30%. So I think we should expect around 27 to 30% growth this year in CASA. We’re very committed to get the ratio up and our retail business in deposits is doing well. As you probably may have seen the ads, we’ve been the official banking partner to rcb. We are also upping our marketing spends. So yes, CASA should do 27 to 30% deposit growth rate as we already signaled in our guidance 23 to 25% and without really taking up the number of branches high. We’ve already invested in the RMs and you can see that in the cost increase for FY26. So I do think we are fully invested for a 20 to 25% growth without any significant investments now.
Chaitya Shah
Okay, thank you sir. Thank you.
Operator
Thank you. Next question is from the line of Viral Mehta from RPML Capital. Please proceed.
Viral Mehta
Hi, good evening sir. Am I audible?
Operator
Yes, yes, please go ahead.
Viral Mehta
Yeah. So my first question is do you expect the same mix of housing, gold and two wheelers to drive next year or do you see the mix changing?
Ajay Kanwal
So easy ones first. Gold. Very easy, yes. Housing? Yes. Vehicles? Yes. I do think Microlab which just did about 9.4% will do better next year. So it’ll probably be the 12 to 15% range. And I do think that commercial banking which is done about 23.3 will probably be in the same range. So that’s what will happen. Really? So yes. Affordable housing, primary leader, vehicle loans, gold loans, all three won’t change. I do think you will see a little bit of a pickup in Microlab and which is why the. Total secure advantage which is looking like 27.6% year on year last FY in current financial we should be closer to 30%.
Viral Mehta
Okay, and my second question is, do you see any sign of Iran war impact on your portfolio? How do you intend preparing for a prolonged war?
Ajay Kanwal
This is a very tough one. You know there is no significant signs. We can see sporadic nature of customers. So I’ll give you a simple real live issue. So one of our customers owns a petrol pump and last thing, we would expect a petrol pump owner not be able to pay an emi. And he did say that the number of tankers he’s getting, which used to be 10 in the past is down to 2. So obviously he’s getting less fuel to sell. So obviously is feeling a bit stressed. So that’s one example. We have not seen more examples like this. But you know we have to watch out because there will be some impact. It cannot be zero impact. Now how significant with which customer class we have to keep our eyes open. Like I said, April collections are very good. They’re pretty much like March collections. So we haven’t seen any real impact in our business customers, even our individual retail customer as yet. We just watching for sectors you have to be careful of in MSME and fortunately we always have a secured strategy. So we do think we have to keep watching out. But right now nothing which worries us really.
Viral Mehta
Okay sir. Okay, thank you. So that’s it for myself.
Ajay Kanwal
Thank you.
Operator
Thank you. Next question is from the line of Rohit Rokde from Ambit bcg. Please go ahead.
Rohit Rokde
Yeah, hello sir. So first of all congrats on the good set of numbers. And so my first question is that how was the outcome of branding with RCB team during this IPL season? Did we see a major uptick in the number of deposits bdos? Yes, a growth in April.
Ajay Kanwal
So April we have seen a tick up in the CASA and the retail TD growth. I would, I don’t know whether it’s sustaining. So I don’t want to make a very strong case that this is the, you know, where we should look at it. But it did see a lift of about 15% in the month of April itself. I, I do think what I do think we will be investing more in our branding and marketing efforts as we go into this year. You can see that one of the reasons is, you know last year there was so many challenges, you know the distraction of trying to fix the unsick. Flow rates were so high that we kind of missed a few things. So yes, we will be investing more in branding and we think the RCB tie up has been a very good tie up for us and fortunately the team is playing well. So we hope that they continue playing well and we get as much advantage as possible from their good performance.
Rohit Rokde
Okay, my second question is actually that have we made any claims to CGFMU yet? What can we expect in terms of recovery from them during the current financial year?
Ajay Kanwal
So I’ll let Raman address that question.
Krishnan Subramania Raman
Thanks Ajay. We have not made any claim from CGMFU in FY26. The claim will start from Q3 of this financial year. So as for their process, no, I think July, August you kind of start loading the claims and around October you should expect the payout. So no claims can be made, but it shall be made in July. August, with October being the first month, we should probably expect some payment. Our rough and ready estimate is we should expect about 65 crores for under CGMFU in quarter three this year.
Rohit Rokde
Okay. Okay. So my third question is actually how’s the used car business performing now and any product launch expected during the current year?
Ajay Kanwal
Yeah. So used car for everyone’s information, we launched in October last year. We are now doing a strong run rate of 25 crores dispersal a month. We have a scorecard which has been tested. It’s a digital process tested. We’ve got hundreds of partners which are large distributors of used cars who are already signed up. Which is why we are doing 25 crores in March and we expect to improve that. We are operating 15 cities. 1, 5, 4. We expect to take that up to 35 cities by September. So used car touchwood launch has gone well. We should see some scale up this year and we like everything we see about that business.
Rohit Rokde
Okay, so my final question actually. So what was the reason for VA transaction which was landing in the year?
Ajay Kanwal
Yeah. So as you know we have a target to meet both SMF and agri. SMF is small and marginal farmers and then the overall target of 18% on agri, we comfortably meet the SMF target which is a small and marginal farmer because we do lot of. We have, you know, as you know we have 30% plus of unbanked rural branches and we do engage a lot of farmers with our MFI group loan and individual loan product. We don’t have much of corporate agribusiness. We have, we hadn’t developed it. So we tend to be short on agri assets and which is why we do some DA which is only about 284 crores as of March end to meet the agri criteria. It is for nothing else. As you know small finance banks can’t do any PSNT transactions unless they’re short or long in any particular subcategory.
And so this is just to meet that short requirement. We are starting to do agri supply chain. We had hired the team in last year. We have seen the first transactions actually start now. So I would still think we’ll do a probably a few days this year because you know the book is expected to grow, the asset book will grow about 21% or 19 to 21%. So we will certainly need to do our quota of SMF and agri. But I do think it’ll be not a big number at all. 284 crores in a, you know already a 36,000 crore book is not a big number.
Operator
Okay, thank you so much sir. That was really helpful and once again congratulations on the great success.
Ajay Kanwal
Thank you. Thank you. God bless you.
Operator
Thank you. Next question is from the line of Suraj Shinde from yes, securities. Please proceed.
Suraj Shinde
Hello. Am I audible sir?
Operator
Yes, yes, please go ahead.
Suraj Shinde
So congratulations on grid setup number and Good evening sir. So my first question is on the recovery side. So recovery from bad debt Is at around 120 crore. So does this stand seem sustainable to you? So or how do you see in the future as well the recoveries?
Ajay Kanwal
I mean if you look at our last few years we’ve seen similar trends in terms of recoveries. So these are primarily from accounts which are either fully provided or technically written off. And just from an accounting standpoint, some of it can be booked under the revenue line. But the bank’s credit cost is to be adjusted with these recoveries as if the recoveries were not made. And that’s really the key point. So, so I mean back to your question. Can we look at a similar trend going forward? I. I do believe so.
Suraj Shinde
Okay, great sir. And second question is on the cost of deposit have been sliding down. Do we know what is the incremental cost of deposit for the quarter? Given the tightness of liquidity, how do you intend to sustain that low cost of capital.
Ajay Kanwal
So listen, April, to be honest, has been there is not as much tightness of liquidity. I think the trend that is, you know, in the banking side is 84% of all new deposits in banking, not Janae. Is in time deposit only 16 is coming in CASA. So the real hard yard for certainly us and I guess a lot of our peers is to grow casa. Like I mentioned, you know, quarter four is when you kind of have the biggest price fight amongst banks for deposits. We have seen our quarter four pricing for deposits in FY26 lower than FY25. But because most of the deposits are really March maturities and maturities, you will see a full impact in quarter one this year. So yes, quarter one this year cost of deposits will fall. Are we seeing a significant tightness in liquidity? There is no tightness in liquidity which is visible, I think.
But do we expect interest rates to decline further? I don’t think so. I think we should see at least in our head from what we see customers doing and competition doing, you should expect flat interest rates. So no more decline beyond Q1 is how I would read it. So Q1 will probably be a lowest point of cost of deposit. Yeah. And you know, if we can do some better magic in growing CASA beyond the 27 to 30% that we are trying to, then our cost of funds could come down in the further quarters.
Suraj Shinde
Okay, okay, great to hear. So and one last question is on the borrowing in the Q4 have gone up significantly around 1500 crores raised from financial institutions. So what is the cost of this fund that we have raised and why we have raised this fund? So where do we see the utilizations coming from?
Ajay Kanwal
Sure. So first to answer the first part of your question, which is the rate, the cost, these are being raised from NABAD, CBA and NHV typically and these are longer 10 or 10 year sort of borrowings. And the blended cost of these borrowings is around 7%, 6.9 to 7%. That’s the range at which we borrow. So essentially what it does is it primarily the focus of these borrowings is to enhance our alma. So because these are 10 years, eight year and so on, so this helps in improving our alm. These are also long term borrowing. So long term stable borrowing, that’s the reason we raise it.
And also there is no CRR SLR impact on these borrowings. So combination of these three is why we do the borrowing and the rate which I explained is around 6.9 to 7%. So clearly, I mean the rate of this borrowing is lower than our cost of deposit. So that is one, the tenor is longer. And we are fortunate to have the refinance books available. So you know, you have to have an affordable housing book which meets the criteria of National Housing Bank. To get refinance, you need to have the MSME book. To get chid b, you need to get the agri book to meet. Sorry, Nabad, we have those asset books we could borrow more. Honestly, because it’s lower cost. And deposit. But we also want to be prudent. So we tend to have 12 to 15% of our total book funded through these long term quasi government financial institutions. And we intend to kind of remain with this percentage even going into next year or rather into this financial year.
Suraj Shinde
Okay, okay, so last question from my side. What is the guidance on the cost to income ratio for this financial year? Can this become, can, can this come down 60%?
Ajay Kanwal
We will make every attempt to do it and I can tell you what will be in its favor. First is like I said, you know, lot of the big investments that we made this year because the cost has been running hard relate to our revenue this year. I think that will show better results next year so we don’t have to spend so much in cost growth in current financial year. Secondly, our revenue will run much faster because obviously we have had a very strong quarter four. We are also seeing an unsecured growth which was a challenge last year. So if you take a combination of those two and of course lower cost of funds this year versus average of last year, we should see better revenue, lower cost growth and hence a better cost income. I just want to tell you and everybody else on this call that March 24th our cost income was 57%. As a management team, we always remember that number. It also tells us that where we could be if things settle down the way we wish it to be settled down. And yes, we would be working as hard as we can to bring this down more significantly as fast as we can.
Suraj Shinde
Okay, thank you for the detailed explanation and best wishes for the FY27.
Ajay Kanwal
Thank you. Sweet of you. Thank you so much.
Operator
Thank you. Thank you, ladies and gentlemen. We will take this as the last question for the day. I now hand the conference over to the management for the closing comments.
Ajay Kanwal
Thank you so much, folks. I think first is to all our analysts, investors who are on this call. I must thank you for your patience. It’s been a tough journey from April 25 to December 26. I think those seven quarters have been hard for us and thank you for your patience and belief. We did Signal that quarter 3 was our bottom quarter. And quarter 4, just to make sure that nothing was lost in terms of what people should expect. We had given a quarter for guidance. That’s the only time we have done it and that’s the only time we will do it. And we’ve met those guidances. I think we’re exiting the crisis in a much more solid. With SMA book lower, with secured book higher and with more diverse businesses because certainly we have seen, you know, the gold business become a real business of size in the last 18 months. We have seen used cars quickly, you know, ramp up and now become a contributor this year. I missed answering a question in the past. Now that I’m talking about, remember what are the products to be launched a credit line on upi. We’ve done all the work. We do expect that to have some solid results that will go live this year.
Our 81 license with FX opportunity along with trade will go live this year. So we do think that we are very conscious on one thing. We’ve seen a big cost growth last year. We don’t want to see that this year. So very measured in terms of what we will spend on cost and we’ll maximize our growth which we have seen in Quadrefloor and continue same growth through this year. And I really would try my best along with the team at Jannah to make sure that we more than meet our guidance. Thank you so much.
Operator
Thank you sir. On behalf of Nuama wealth and Investment Ltd. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.