Punjab National Bank (PNB) Q2 FY23 Earnings Concall Transcript

Punjab National Bank (NSE: PNB) Q2 FY23 Earnings Concall dated Nov. 02, 2022

Corporate Participants:

Atul Kumar Goel — Managing Director and Chief Executive Officer

Suraj Das — Investor Relations

Analysts:

Neil Mehta — — Analyst

Sanjeep Dawani — — Analyst

Anand — — Analyst

Priyance — — Analyst

Himanshu Taluja — — Analyst

Mahrukh — — Analyst

Bhavik Shah — — Analyst

Ashok Ajmera — — Analyst

Asley Sanjay — — Analyst

Ronak — — Analyst

Sathish — — Analyst

Daga — — Analyst

Presentation:

Operator

Good afternoon, everyone, and thanks for joining the call. On behalf of Batlivala & Karani Securities, we welcome you to Punjab National Bank’s 2Q FY ’23 Post-Results Conference Call. We have with us today the management team of Punjab National Bank, represented by MD and CEO sir, Executive Directors, and other senior officials of the Bank.

I would now request MD and CEO sir to start the call with his opening remarks on 2Q FY ’23 results, post which we will start the Q&A session. Thank you, and over to you, sir.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Good afternoon very much, Mr. Suraj Das from the B&K. And I welcome all the analysts who are attending this meeting. And I am happy to present the quarterly as well as the half-yearly result of the Punjab National Bank for the period ended September 30, 2022.

As far as business of the Bank is concerned, gross business of the Bank has increased by 9.33% on Y-o-Y basis. Similarly, the gross deposit increased by 7% on a year-to-year basis and gross advance increased from the figure of INR INR735,724 from September 2021 figure to INR830,212 crore, with a growth rate of 12.84%. [Technical Issues] at the time of the guidance [Technical Issues] credit growth, we are targeting in the range of the 10% for the whole of the financial year. Since we have already achieved the 12.84% Y-o-Y growth in the gross advances, we are revising our credit growth guidance. It will be within the range of 12% to 13% because now there is too much of demand from the credit from the market. Saving bank, there is a growth of the 5.84%, and CASA of the Bank stood at 44.91% as against the 46.35% in the June quarter.

Coming to the operating part, there is a robust growth in the net interest income of the Bank, 30.19% on Y-o-Y basis. In last September 2021 quarter, it was INR6,353 crore which has improved to INR8,271 crore with a growth rate 30.19%. Even if we compare with quarter-to-quarter, June to September, there is an increase of 9.65%. Similarly, the operating profit, there is a growth of 38.4% on a YoY basis, and if we compare quarter-to-quarter, it is a 3.5% growth. As far as net profit of the Bank is concerned, if we compare quarter-to-quarter, there is an increase of around 33.44% because last quarter profit was INR308 crore, which has increased to INR411 crore. But if you see year-on-year wise, definitely there is a dip in the — around 62%.

Coming to the assets quality. Assets quality, which I am comparing only quarter-to-quarter and I will give you the number of the last year also. 13.63% in September ’21 and which was reduced to 11.27% in June 2022, further reduced to 10.48%. And similarly, amount has also reduced of the gross NPA and net NPA also. Net NPA, it was 5.49% in September 2021, 4.28% in the June — last quarter, and further reduced to 3.8%. And last time we have given the guidance, our gross NPA will be in the single-digit by March ’23. So we are maintaining that. My purpose was telling to single-digit, it may be 9.98% or 9.90%. But since we have already achieved 10.48% and you have seen, every quarter, there is a reduction of around 70 to 75 basis points. So although I am maintaining single digit, but it will be further reduced, maybe whatever it is coming in the single digit. Similarly, the net NPA guidance, we have given it will be individual 3.5 by March ’23. This we are revising. Since we have already achieved 3.80 — 3.80 by the September quarter, so now we are confident — I am fully confident by March ’23, this net NPA figure will be 3% or less than 3%.

PCR has improved to 83.96%. And one more thing I want to tell you. Last time we have told, we have made a target of the INR32,000 crores of the total recovery in the full financial year. It means INR8,000 crore per quarter. And if you see the number of the — both the quarter, first quarter, June it was INR7,057 crore. And the second quarter, it is INR8,564 crores. This number, which I am telling you, it is including the technical write-off, as well as the part of the recovery booked in the recognized interest also, because the movement of the NPA, technical written off, and the income which we have booked in the interest, that is not reflecting.

And second point I have told you, our endeavor is like this, our slippage should be less than the recovery number. So if you see both the quarters, we have achieved that parameter also. In June 2022, total recovery was INR7,057 crore, whereas the addition was INR6,400 crore-plus. And in the current quarter, September quarter, recovery was INR8,564 crore, and the additional was less INR6,000 crore. So we have achieved both the numbers. There should be INR32,000 crore recovery [Foreign Speech]. Similarly, the addition should be less than the slippage. This is about the asset quality.

As far as capital adequacy is concerned, you may be interested in the capital adequacy result. As on date, my Tier 1 is 12.20%, as against the normal [Technical Issues] is 14.74%, as against the [Technical Issues] further raising of the capital, there is no immediate need of the — raising the capital, but definitely, we will raise the capital either in the current quarter or the next quarter seeing the market, what is the market expectations and whatever the rate we are going to get. So we have already got the approval from the Board for the INR12,000 crore. Out of this INR5,581 crores and INR6,500 crore is the Tier 2. Out of INR5,500 crore, we have already raised INR2,600-plus crore in the last quarter, [Foreign Speech] September quarter. So remaining we will see if the rate at which we want to raise the capital. Definitely, we will not mind raising the capital also, particularly AT1. And if there is a need of Tier 2 also, we will also raise the Tier 2.

Coming to the asset quality again. I reconfirm my statement which I given last quarter also, there is not a single big account as on date in my kitty, which we have to recognize. We are working for the big account already recognized. We are doing resolution as well as the recovery, but definitely there was issue in the small account [Foreign Speech] that we are addressing. Even as on date, whatever the addition is the — INR5,900-plus crore in the September quarter, highest single account is only INR178 crore. And even for the SMA2 figure, it was INR10,287 crore in September 2022. As on date it has further reduced to INR4,363 crore, and the highest account in the INR4,363 crore is only the less than INR100 crores, that is INR94 crore single account.

So, again, I am reconfirming, big account, we are not thinking as on date to recognize in the times to come. And one more thing, when we are talking the sales quality, I told there was a issue in the small account. [Technical Issues] both the [Technical Issues] as well as the collection efficiency. I am giving one very important data. From the — we have made the analysis from July 1, 2020 till date, September 30, 2022, [Foreign Speech] more than two years, what type of credit requisition we have made. So in that, more than two years — last two years, INR270,812 crore we have sanctioned, against which as on date outstanding is 190,756. Out of this NPA, 190,756, hardly INR945 crore, which is coming INR0.35 crore — 0.35%.

And further, I am giving breakup, because you may be interested [Foreign Speech] further for the segment. Agriculture only 0.25%. MSME, there is a little bit on the higher side, 2.14%. Retail, 0.38%. Others, means corporate, 0.02%. So it means it will give off the cushion, which type of underwriting we are doing, and which I told you there was issue in the [Technical Issues]. I think one or two quarter [Foreign Speech] everything will be cleared. So as far as NCLT account is concerned, as on date 560 account of 66,855 already admitted and 62 [Phonetic] account on the 4,869 is to be recognized.

And NARCL [Foreign Speech], we have already identified in first phase nine accounts of INR2,752 crore. Out of it, five accounts [Foreign Speech], we have got the offer from the [Foreign Speech] consortium offer for the very outstanding of the PNB is 1,099.

Yes, as far as dispensation of the fraud is concerned, entire amount, 651 was the pending in the last quarter, which was to be amortized in two quarters, half in the September quarter, half in the December quarter. But entire 6,051, we have already provided in this quarter itself. Nothing amount is pending for the amortization in the times to come.

So this is from my side. If you have any question also, I would like to answer your — all the queries also. I may confirm [Foreign Speech] Bank is on the very right path. Whatever the future guidance we have given, I think we have achieved all the guidance which we have given you the last time. So, Bank is on the growth path. Only there is also one or two quarters. ’23 or ’24, whatever that number I have given, I think it should be a golden period for the Punjab National Bank.

With this word, I conclude my [Technical Issues]. Now, floor is open for you. Suraj, you can take over the charge.

Questions and Answers:

Suraj Das — Investor Relations

[Operator Instructions] So we have the first question from the chat window. It is from Hersh Agarwal [Phonetic]. So the question is, why we still have very high NPA from agriculture and MSME sector?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah, I have already explained in my opening remarks also, there was definitely a legacy issue and which we are addressing also. So out of this INR6,000 crore number — around INR6,000 crore in the slippage, the Agri was 2,785. And this is the — not only in the Punjab National Bank. NPA in the agriculture is the issue of the banking industry. It is not only the issue of the Punjab National Bank, because some of the states, if the government has already announced the debt waiver also, the customer are not making the payment. This is the only reason I want to tell you. But I have already given the data for the last two years for agriculture also. Total amount, we have sanctioned in agriculture from July 1, ’22 to September 30, 2022. 35,485 we have sanctioned fresh loan, where NPA is only INR89 crores, which is coming 0.25% only.

Suraj Das — Investor Relations

The next question is from Neil Mehta [Phonetic]. Neil Mehta, I request you to please unmute yourself and go ahead with your question. Neil, your voice is very feeble. Can you come closer to the mic and ask your question?

Neil Mehta — — Analyst

Yeah. Am I audible now?

Suraj Das — Investor Relations

Yeah, you are audible now.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. Neil, go ahead. You are audible, yeah.

Neil Mehta — — Analyst

Thank you, sir, for the opportunity. So, sir, we posted a profit — Treasury profit this year — this quarter of INR102 crores, which was against a loss of INR532 crores in the last quarter. Just wanted to understand what was the reason behind us posting a profit in a rising interest rate environment, because our modified duration of the book, it actually rose back to 3.15, around. So if you can please explain what led to the profit on the Treasury front?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Treasury profit, it was INR160 crore. Point number one. It is INR160 crore, Treasury profit. And mark-to-market, we have to provide INR158 crore. So your specific question is the increasing interest rate, how the profit has come? Some of the security was already purchased in the — prior to increase of the rate of interest, which were in the profit we have sold. And this is profitable, not only to the G-Sec only. There is some profit also which is related to the trading in the equity also. So it is a combination of the sale of the equity, combination of the SLR and the non-SLR also. And sometimes there is a profit in the SR also. So, it is a combination of all the things.

Neil Mehta — — Analyst

Okay, got it. So you are saying it’s not just on account of dealings in government securities. This could also [Speech Overlap] on account of equity investments. Got it, sir. And if you could also give some color on what would be the guidance for the growth of the corporate book. I guess, currently, it was I think 14% Y-o-Y. So, if you can just throw some color on what do you — what rate do you expect it to grow at?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. If you see my credit growth, it is 12.84% in total and it will be [Technical Issues] composition of the 12.4%, it is 14.15% from the corporate sector, in addition to the retail, it was around 16.95%. If we go further for the retail [Foreign Speech] it was 35%. So, our focus is on the RAM side. I’m very honest to all of you. Our focus is on the RAM side, we want to increase the RAM portfolio because yield is much better as compared to the corporate book also. But we are also financing in the corporate also because [Foreign Speech] corporate there is a good demand in some of the sectors like there is a good demand in the road sector also. Infra, there is a good demand also. And the government PLI scheme — and the government is giving the thrust on the Infrastructure.

In the other — port, etc., also, there is also a demand. Even — one more sector, NBFCs also there is a lot of demand. As on date, we are having the exposure of around INR1,18,000 crore in the NBFCs. And we have taken a good exposure in the good NBFCs, and I’m happy to share you, out of INR1,18,000 crore, 97% exposure to the NBFC, either A or AA or AAA, externally rated. So, we will do financing of all these sectors, but RAM is the focus. And corporate, maybe, if we are getting good proposal also, we will not mind to go avail the opportunity which is available as on date.

Neil Mehta — — Analyst

Got it, sir. Thank you so much.

Suraj Das — Investor Relations

Thank you. The next question is from Sanjeep Dawani [Phonetic]. Sanjeep Dawani, please unmute yourself and go ahead with your question. Sanjeep, request you to please unmute yourself and go ahead with your question.

Sanjeep Dawani — — Analyst

Hello? Yes, I think — am I audible, sir?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes. Your picture is also — we can also — seen you also.

Sanjeep Dawani — — Analyst

Thank you, sir. Sir, actually just now you mentioned about INR6,500 crores, which is amortized. So amortized means it is already written off from the P&L account. Should I take it this way?

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Foreign Speech] I think — may I correct you? I have not told the figure of 6,500, I told you INR651 crore fraud, fraud which was to be amortized in two quarters, [Foreign Speech] 50% of the 651, a part we have to provide in September. So we have provided, nothing is the amount pending to the next quarter.

Sanjeep Dawani — — Analyst

So, it is written off from our P&L account. So to that extent, our profits are lower in this quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah, it is coming under the head of the provision, because as per RBI guidelines if any account has been declared fraud, we can take the dispensation and to make the provision in the four quarter. So INR651 crore was outstanding, which has to be amortizing in two quarters. 50% was to be provided in the September and 50% was provided to the December. But we have provided entire amount in this quarter. Yeah, you are right, by this amount profitability has been impacted.

Sanjeep Dawani — — Analyst

Impacted, and since it is a provision, this will carry on for next quarter. If it is recovered, then we can always take it back as profit?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Definitely. It is not an actual expenditure, I fully agree with you. It is not an actual expenditure, it is a provision. If we will make the recovery in the fraud account also, definitely there will be a reversal of the provision. Fully agreed

Suraj Das — Investor Relations

Thank you. The next question is from Mr. Anand [Phonetic]. Request you to please unmute yourself and go ahead with your question.

Anand — — Analyst

Yes, sir, thank you for the opportunity. Sir, first question was on — in this quarter, RBI auditor basically had asked a lot of banks to make some standard asset provisions on the public sector entities. First, whether we have got any instruction like this? And if yes, what is the kind of provision that we have made? Is it the INR170 crores that we have mentioned in the notes to accounts or is it more to — more of that?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Anand, actually, there is no [Technical Issues] communication, let me clarify. Normally, this type of provision is being [Technical Issues]. As on date, we have not received the report of the [Technical Issues], but we are aware, we are aware some of the accounts. The other banks already made the provision. And we are also having the exposure in those accounts also. So around INR900 crores — around INR900 crore, we have made a provision in the standard assets also in this quarter also.

Anand — — Analyst

Okay. So is it pertaining to that instruction itself or like is it on an ad hoc basis that we have done?

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Foreign Speech] I clarified you, [Foreign Speech] there is written instruction from the RBI to make the provision in this account. Point number one. Point number two, regulator is taking the holistic view. If there is a weakness in some of the account, not in a particular bank, if there is weakness in the other bank also, they are suggesting, I think it is the right approach also. So as on date because we have not received our AFI also, but we have got the information, some of the banks, they were required to make the provision. So we were also having the exposure. So we have made it. It is not an ad hoc basis, it is account-specific.

Anand — — Analyst

Okay. So you believe that this is largely done with, right?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes.

Anand — — Analyst

All the provision that we had to make, we already made it?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Around INR800 crore to INR900 crore, we have made a provision in three, four accounts also. Definitely, if we receive the report also, if — this account will already be there. So not required. If some other account will be there, then definitely we are required to make.

Anand — — Analyst

Okay, got it. Sir, secondly was the outlook on the margins from here on. One, is basically, I think you said that growth is going to be far better in the second half of the year, again, where you are basically focusing more on RAM. But even the corporate growth is going to come back. So what is the outlook on the margins in the second half of the year and then going forward?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Anand, I may clarify you, I have not told we will not do the financing to the corporate. There is no question of the Bank also. But corporate [Foreign Speech] suppose we are very cherry-picking; AAA, AA also, what yield we are getting. This is the reason I told you our focus on the RAM side because we are getting more yield as compared to the corporate. If you see my NIM also, in terms of the approved number, already I have told you 30% growth is there, and I have told in the last call also. I have given guidance of the two number. I have never given the guidance for the net profit, I have given guidance for the two number, [Foreign Speech] operating profit, at least there will be a growth of 10% year-on-year basis.

And similarly, I have given the guidance, 10% growth in the NII also. But in particular quarter, there is a very good growth, 30% in the NII and 38% in the operating profit. It is only for the one quarter. And I’m maintaining whatever the guidance I’ve given. NIM, last time, we have given the guidance, it was 2.9%, I’m talking about the domestic NIM, it was 2.90, which has improved to 3.11. So last time, we have given the guidance our NIM will be within the range of the 2.80 to 2.90. Today we are revising our guidance, we are giving the guidance our NIM will be in the range of 2.9 to 3. So, we are improving 10 basis points.

Anand — — Analyst

Okay, got it.

Atul Kumar Goel — Managing Director and Chief Executive Officer

And the absolute number, I am again telling quarter-by-quarter our NII should be increased.

Anand — — Analyst

Okay. Sir, third is about your staff cost. So for the past two quarters basically your staff cost was lower and again it spiked up in the current quarter. So is it more of a normalization of staff cost, because earlier I believe you were carrying excess provisions?

Atul Kumar Goel — Managing Director and Chief Executive Officer

No, Anand, it is only the one impact, because on account of the hardening of the interest, there was a reversal of the AS-15 provision in the earlier quarter, March quarter as well as the September quarter. But you maybe remember, last time what were the reversal of available, we have made the entire provision of the family pension. Total provision of the family pension was INR394 crore, and part we have provided in December and the March. The remaining we have provided in the June itself. So this is the impact of the — only on account of the AS provision, nothing more. Otherwise, there is no any increase in the salary cost, yeah.

Anand — — Analyst

This run rate should continue going forward, is it?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. But definitely, I am very honest to all of you, because November will be the time where the wage settlement is due for the next year. So, definitely, we would like to make the provision, whatever the provision we have to make from the November itself for the wage revision.

Anand — — Analyst

And sir, any increase in DA cost that you expect?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Any?

Anand — — Analyst

Increase in the DA cost, dearness allowance. So that also will have an impact [Speech Overlap].

Atul Kumar Goel — Managing Director and Chief Executive Officer

It depends on the inflation. That is — it is very difficult to presume also what will be the inflation. It depends on the [Technical Issues].

Anand — — Analyst

Sir, any ballpark figure as to what would be the impact on a quarter-on-quarter basis on the — because of the wage settlement that you would try to build?

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Foreign Speech] it will be very difficult to say. Normally if you see the past trend also. November 2022 [Foreign Speech] next wage revision is due. If you see the past trend also the wage revision was in the range of 12% to 13% also. So definitely, I think it will be within the same range, 10% to 12% also definitely will be there.

Anand — — Analyst

Sure, sir. Thanks.

Suraj Das — Investor Relations

Thanks. The next question is from the line of Priyance [Phonetic]. Request you to please unmute yourself and go ahead with your question.

Priyance — — Analyst

Hello, am I audible?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah, Priyance, you are audible. Please go ahead.

Suraj Das — Investor Relations

I think there is some [Technical Issues] from the line of Priyance. We will go ahead with the next question. That is from the line of Mr. Bhavik Shah [Phonetic]. Request you to please unmute yourself and go ahead with your question. Mr. Bhavik also seems to be unresponsive. So we will go ahead with Mr. Himanshu Taluja [Phonetic]. Request you to please unmute yourself and go ahead with your question.

Himanshu Taluja — — Analyst

Hi, sir, thanks for the opportunity. Just few questions at my end. Firstly is on the restructured pool of 14,000 OTR 1 and OTR 2. Can you just give a breakup where is this in the DPD buckets? Right now they are part of standard SMA 1, SMA 2. And how much is already the part of the NPA?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah, OTR 1 as on date, outstanding in the retail and the others, INR3,088 crore. And MSME, it is 479. If you make the total, OTR 1 outstanding is 3,567. It is a standard book. And you are also asking whatever the NPA also. So NPA in this INR1,930 crore in the OTR 1. And this OTR 2, outstanding as on date in the individual and small is 5,927 and MSME it is 4,446. If you make the total, so 10,373, which is coming in the standard book. And NPA, NPA was around INR1,850 crore — INR1,900-plus. INR589 crore was the NPA in the individual and small, and 1,384 was in the MSME.

Himanshu Taluja — — Analyst

Sir, what portion of your standard pool — standard restructured pool is out of the moratorium right now? And how much you expect over the — how much of this standard pool you expect to slip?

Atul Kumar Goel — Managing Director and Chief Executive Officer

I think two years is already over, because two years was the moratorium, two years has already been over as on date. So I think nothing is in the moratorium. Let me — still, because some of the availment was on the later side. So as on date, moratorium up to September 30, 2022, was around 3,558.

Himanshu Taluja — — Analyst

Okay, fair. So of the remaining of 13,000 standard pool, out of this moratorium is 3,500, how much you expect to — the restructured to slip basically in the coming quarters?

Atul Kumar Goel — Managing Director and Chief Executive Officer

As on date, we are not of the view any account will be slipped, but considering the — whatever the — out of the total restructuring, major portion which was to be downgraded, already downgraded. So whatever I’m trying to tell you in OTR 1, only 1,221 is the moratorium and the OTR 2 is around 2,329. So as on date I think there is no threat, as on date — because some of the account, even they are not coming in the SMA 02 book also. So I am quite of optimistic, whatever account to be downgraded already downgraded, because you see, number which you [Technical Issues], if you make the total, 1,925 already downgraded. Any further [Technical Issues] nominal amount will be there.

Himanshu Taluja — — Analyst

Okay. Sure. The second is, you have already given — since there are no big accounts which are under stress and you have already given the SMA 2 above INR5 crores. Since the pain is in the lower end of the accounts, can I get the number of the SMA 1 and SMA 2 which is below INR5 crore?

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Foreign Speech] I may correct you also. The number A — in presentation, they have given INR5 crore and above. But I am giving you total number, whatever the number I have repeated in my conversation, INR10,287 crore was the number of the SMA 2, it is entire. INR10,287 crore is not more than INR5 crore, it is the entire SMA 2 number, Bank as a whole, which has reduced to INR4,363 crore. And if you want SMA-012 number also, as on date, I am giving the latest number. SMA-0 16,183, and SMA 1 is the 9,553. Total SMA-012 as on date is around 30,000 only. There is no question of the INR5 crore and above and the less than INR5 crore. This is the — even INR1 account that is SMA-012.

Himanshu Taluja — — Analyst

Okay. Sir, now finally, ultimately, our phase of the recovery is healthy, but by when you expect the slippages, because still on the gross slippages we are on an elevated side. So by when you expect the slippages to normalize?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Himanshu, I think I have given you the answer of your question in my conversation also. [Foreign Speech] what was the issue? Issue was, if there is a stress in the RAM sector also, there was a major issue, what type of fresh underwriting we are doing. So, we have worked on both the — first the underwriting standard, another is the collection efficiency. I have given you the data of the last two years sanction also. And I have told you [Foreign Speech] NPA slippage is only 0.35%. So whatever your specific query [Foreign Speech], I think only by March ’23, maybe one or two quarter. So whatever the legacy issue of the RAM is there, it will be completely wiped out and 2023, 2024 as I told you earlier also will be the golden period, no slippage, no — only the recovery will come.

Himanshu Taluja — — Analyst

Okay, sure, sir. Thanks. That’s it from my end.

Atul Kumar Goel — Managing Director and Chief Executive Officer

And you see the GST collection also. GST collection has improved, INR1.40 lakh crore also. This is also giving one of the signal, there is a — economy growth is on the right track, consecutive from the last eight months.

Himanshu Taluja — — Analyst

Yeah, sure, sir. Thanks.

Suraj Das — Investor Relations

Thank you. The next question is from the line of Mahrukh [Phonetic]. Request you to please unmute yourself and go ahead with your question.

Mahrukh — — Analyst

Yes. Hello, sir. Good evening. Sir, my first question is can you please tell me the ECLGs slippages? And if you could please repeat the SME numbers?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. ECLGS, Mahrukh, around INR21,460 crore we have sanctioned, out of which INR12,868 crores is the outstanding, and out of which NPAs on date is INR840 crore, which is coming around 6.53%.

Mahrukh — — Analyst

Hello? Okay, sir, thank you. Can you please repeat the SMA numbers, please?

Atul Kumar Goel — Managing Director and Chief Executive Officer

SMA number [Foreign Speech] SMA 2 was 10,287 from the zero rupees. It is not a one quarter ago, two quarter ago. 10,287 was the entire SMA 2 in the Bank as a whole in the September 2022, which has drastically reduced to 4,363. If you want to ask the number of the total SMA 01 also [Technical Issues] and 16,183 for the SMA 0. Then SMA 1 is 9,553. 4,363 is SMA 2.

Suraj Das — Investor Relations

Thank you. Okay, we’ll go ahead with the next question, which is from the line of Mr. Bhavik Shah. Bhavik, request you to please unmute yourself.

Bhavik Shah — — Analyst

Hi, sir. Sir, thanks for the opportunity. So I have two questions. So first is, so what is your current liquidity coverage ratio?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Current?

Bhavik Shah — — Analyst

Liquidity coverage ratio.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Liquidity coverage ratiom it is 160 — it remains between 150% to 160%, as against the requirement of the 100%. So it is 150% to 160%, because we are in so many excess SLR. INR50,000 crore excess SLR we are sitting as on date.

Bhavik Shah — — Analyst

Okay. Sir, thanks for that. And sir, one more thing. Sir, what would be the outstanding deferred tax asset and when do we plan to consider shifting to the new tax regime?

Atul Kumar Goel — Managing Director and Chief Executive Officer

As on date, because we are already having the accumulated loss in our book, so we have taken the opinion of our consultant also. I think as on date, we are not getting any benefit to shift to the new tax regime. And we have given the disclosure in our note to accounts also. So, as on date, there is no plan. We will take appropriate decision when we are of the view, definitely it is the right time to shift from the old regime to new regime.

Bhavik Shah — — Analyst

Okay. And sir, we saw a couple of banks getting divergence report from RBI. Is that divergence done, as in, is it reportable material?

Atul Kumar Goel — Managing Director and Chief Executive Officer

As on date, we have not received our report.

Bhavik Shah — — Analyst

Okay. Thank you, sir. So that’s it from my side.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Thank you, Bhavik.

Suraj Das — Investor Relations

Thank you. The next question is from the line of Mr. Priyance. Request you to please unmute yourself.

Priyance — — Analyst

Yeah. Sir, my first question is that –with respect to our CASA growth, our current account deposit growth has been very, very minor. You can see that as of September ’21, we had current account deposit of INR71,958 crores, whereas as of September ’22, it’s only INR72,741 crores, hardly 1% growth. And you know, current account deposit is like free money, no interest has to be paid. So I would like to understand, and I would like to give you a constructive feedback that the Board must give a concrete target to all the CGM and GM and the branch managers to incorporate and to introduce additional number of corporate accounts, wherein we can get current account?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, we are aware whatever you are saying. It is really a concern area for us also. As you have told, there is a very nominal growth, we are aware of that, it is 1.09%, but if you compare from the June also. June [Foreign Speech] there is a good growth. It was INR69,332 crore, which has increased to INR72,740 crore — around INR3,000 crore. What we have done, we are targeting the corporate client where we can open the CMAC account also. And some of the large corporates, if they are having some other associate also, we are targeting those also.

And we have also provided the tab to our all 10,000 branches. After providing the tab, there is a lot of improvement in opening of the account, time has reduced, data has been reduced. But that is being done on the saving bank account as on date. We are [Technical Issues] to the current account. The time will come definitely, current account mobilization will also be approved, but I fully agree, whatever your concern you have shown, we are fully aware of it.

Priyance — — Analyst

So appreciate your positive feedback. I’m only requesting that you being the Chief of the Bank, from the Board level some solid guideline and instruction must be passed down to all the Executive Management of the of the Bank to mobilize additional number of corporate account and also salary account, so that we can have — like when the final bill will be there, automatically whatever money will pass through. Bank will make some money out of this. So I think this is one of the niche area to be tapped into with a constructive implemented strategy.

Atul Kumar Goel — Managing Director and Chief Executive Officer

You are right, Priya, already part of the advice has already been done. We have already instructed to our — all the zonal head who are in the state capital, because current account normally you can garner big account in the state capital also. This instruction has already been passed to the zonal heads [Technical Issues] they should garner more and more current deposit accounts [Technical Issues] operation.

Suraj Das — Investor Relations

Thank you. The next question is from the line of Mr. Sunil Mehta [Phonetic]. We request you to please unmute.

Ashok Ajmera — — Analyst

Yeah. This is not Sunil Mehta, he is my colleague. I’m Ashok Ajmera [Phonetic]. Good evening, sir. I met you in the morning also.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Ajmera ji, good afternoon. Yeah, please.

Ashok Ajmera — — Analyst

Yeah. I was waiting for a long time. Most of the queries have been answered. But I just need to ask a few questions and some observations. Now you see, with the interest rate hardening up and inflation going up, we feel that even in the RAM book there can be some pressure. So though your SMA 2 is INR10,287 crore, going forward, especially in this quarter, September-December quarter, do you see some pressure coming in SMA 2 book, if not, the NPA finally?

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Foreign Speech] as on date, there is no much pressure also, because Ajmera ji, I have given two data also. 10,287 figure which I have given to you that is standing of the SMA 2 as on September 30. But we have taken the data of the — current data also. So it has reduced to 4,363. So it means there is not a pressure, there is reducing, because all our machinery, all our machinery in the field — we are having 10,000 branches. Main focus of the Bank is on the recovery because profit has to come from the recovery. And the INR90,000 crore, it has reduced to INR87,000 is the recovery — the gross NPA number. And in addition to the 87,000 is the technical write-off.

So each and every employee of the Bank is for the recovery. When they are making the recovery of the NPA, they are also making the effort to recovery in the standard account. But definitely whatever your specific question, because interest rate has started harder and the MCLR has already been changed. Even the RLLR has also been changed, because as per the RBI guidelines, all the retail and the MSE loan has to be linked with the external benchmark. When external benchmark has already been increased, naturally there will be an increase in the EMI or they have to make the more payment. But as on date, we have kept our watch open for this also. We are seeing how to attach this. As of yet, we are not seeing any pressure.

Ashok Ajmera — — Analyst

Okay, sir. Now, sir, in case of this NARCL, you said the nine account of INR2,752 crores, they have been considered now and out of that five you have got already the offer from NARCL for INR1,099 crore. So this is our portion in the consortium or the total consortium amount?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, I have earlier clarified also, out of the nine account, five account [Foreign Speech] we have got the offer from the NARCL. 1,999 is the outstanding, it is not the amount also, it is outstanding in my book because in some of the accounts, the other bank is the leader of the consortium. So it is only my outstanding, my share. 1,099 is my outstanding.

Ashok Ajmera — — Analyst

So you expect approximately a realization of about 20%, 25%, because in one account we see only 5%, in another account we are seeing about 35%. So in this five account, you must have by now calculated that how much percentage of it, especially with NARCL we are getting, forget about the cash recovery and the SRs. But what is the total recovery you expect from this five account, sir?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah, Ajmera ji, it will be finalized only after the completion of the processes. I may tell you in one account. We were the leader of the consortium, sir. And we have got the — it is in the newspaper also. It is the newspaper also, where we have got the offer from the NARCL, around INR238 crore. [Foreign Speech] I can take the percentage what is my share also, but where we have gone to the Swiss challenge method, so we have got around more than INR400 crore. So it is very difficult to say what will be the actual recovery, it is under process. The final outcome will be in — we will be in a position to give what will be the actual recovery.

Ashok Ajmera — — Analyst

Okay, sir. My next question is, sir, on the treasury front, how are we placed, like so far you’re managing it well. But going forward, if we expect about 50 to 60 basis point still rise in the interest rate depending on the Fed rate today, late night coming in, so how much we are cushioned for any treasury mark-to-market losses and also the trading income point of view?

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Foreign Speech] My Treasury is very active. My Treasury is very active and they were making very good profit also. But on account of the increase in the interest rate, this is the function of the interest, not the function of the Treasury person also. So as on date whatever the requirement of the mark-to-market provision, we have already provided in June and September also. So we are immunized. So whatever you are saying, if there is a further increase in the rate of interest also, so naturally we have to make the provision — additional provision we would require to make also. But if you see, it is keeping on changing also.

Why I’m saying keeping on changing, that if you see the 10-year G-Sec, it was 7.45 in June 2022, and in between also it has reduced to 7.11 also. So Treasury — it is a function of the Treasury, they must have taken any provision also to make the profit also, but as on date we are immunized, we have provided, but definitely there will be further increase in the rate of interest. So we have to make the provision also there.

Suraj Das — Investor Relations

Thank you. The next question is from the line of Asley Sanjay [Phonetic]. We request you to please unmute and go ahead with your question.

Asley Sanjay — — Analyst

Hi, sir, just one question from my side. Can you explain what is driving that 27% Q-o-Q increase in staff expenses this quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Asley, your voice was breaking. Can you repeat your question? Asley, can you repeat your question, your voice is breaking?

Suraj Das — Investor Relations

Sir, I think the question was what is the reason behind sharp increase in the staff cost on a Q-o-Q basis?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Okay. Already I have explained to the [Foreign Speech]. Last quarter, on account of the increase in the interest rate, AS provision in the June quarter as well in the March quarter, there was a reversal. But in this particular quarter, there was some provision also. That was the only reason, because if you compare from June to September, it has reduced, because it was 7.5 in the June quarter and 7.45. There was a difference of 5, 6 basis point. On account of this, we have to make the provision for AS-15, otherwise my employee cost is flat. That is — whatever increase you are seeing, that is on account of the AS-15, because last time there was a reversal. And whatever the reversal was there, we have not utilized. We have made the entire provision of the family pension, which was supposed to be in the three, four years.

Suraj Das — Investor Relations

Thank you. The next question is from the line of Ronak [Phonetic]. Request you to please unmute yourself and go ahead with your question.

Ronak — — Analyst

Hello, am I audible?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. Yes, Ronak ji, please.

Ronak — — Analyst

Sir, good evening. I wanted to ask what is the segment-wise slippages breakup for the quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. Segment-wise slippage, the bifurcation of the 5,978 is 2,785 in the agriculture, MSME there is 1,597. retail 623, and others 296. And remaining 378 in the existing account. So it is coming 5,979.

Ronak — — Analyst

Okay. Thank you, sir. And one more question was, what is the guidance on advances and deposit growth?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Advances growth last time we have given the target of around 10%, because we have already achieved 12.84%. So we are revising our guidance. Current year there will be at 12% to 13%. But deposits, I think there is no need any guidance also. Deposit is the function of the — how much you require. Whatever the incremental growth is there, either we can raise the fund. If fund is not available at a cheaper rate, we will also try to redeem some of the SLR, if we are in a position, considering the movement in the interest rate. Otherwise, need based, we will raise the deposits from the market.

Ronak — — Analyst

Okay. And what will be the cost-income ratio and slippages and the credit cost for the next quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Credit cost, if you see, it was reduced to — last quarter it was 2.46% [Technical Issues] 1.76%. So we are giving the guidance, it will be around 2% for whole of the year. [Technical Issues] cost to income, I think it will remain in the same [Technical Issues]. There is no much [Technical Issues] as I told you we have to provide for the wage revision also. So a little bit there may be an increase also. But we are trying to increase the NII and also the other income. So whatever the ratio, ratio should not be impacted.

Ronak — — Analyst

Okay. Thank you, sir. Yeah, that’s it from my side.

Suraj Das — Investor Relations

Thank you. The next question is from the chat window. So, the question is on the loan book breakup by benchmark that you present on the presentation. Share of FCI and other currencies loans — other variable rate loans seems very high at around 27% while your overseas book seems to be only 5% of the overall loans. So, can you give some color that why the share of FCI and other [Speech Overlap].

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. I can give you the breakup of this also. Actually, 26% we have given the — which is in the foreign currency and the others. The major portion of this in the — which is apart from the RLLR or the MCLR. The maximum portion is coming in this particular bucket is the TBLR. So all of the loans which we have given is 26.48%, it is basically on the floating side also. So I can give you the further breakup of this. TBLR 9.07%. ELITE is 12.43%. ELITE another category of the repolling rate. And the foreign currency is 4.98%. It is floating– I’m confirming it is floating. Your worry will be whether it is a floating or fixed. As on date, my fixed rate is only 7% to 8% only.

Suraj Das — Investor Relations

Okay. And a related question to that is regarding the overseas book growth. So, that book has — saw a healthy growth this quarter. The question is, if you can just give us some color on the — from where the growth is coming. Is it local credit or bias credit or linked to Indian corporates or any other refinancing or I mean what it is?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Major portion is from the — to the banks also. Major portion in this is the exposure to the bank.

Suraj Das — Investor Relations

Bank, as in, sir, I mean is it related to Indian corporates or bias credit or…

Atul Kumar Goel — Managing Director and Chief Executive Officer

No, India — some portion to the Indian corporate also is there. But major portion in the total exposure in the loan to the banks, where we are getting some spread.

Suraj Das — Investor Relations

Okay, understood, sir. Okay. The next question is from the line of Mr. Sathish [Phonetic]. Request you to please unmute yourself and go ahead with your question. Sathish, request you to please unmute yourself and go ahead with your question.

Sathish — — Analyst

[Foreign Speech]

Atul Kumar Goel — Managing Director and Chief Executive Officer

Sathish ji, please go ahead. Sathish ji, please go ahead. [Foreign Speech]

Sathish — — Analyst

[Foreign Speech]

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Foreign Speech]

Suraj Das — Investor Relations

Thanks. The next question is from the line of Mr. Priyance. Request you to please unmute yourself and go ahead with the question.

Priyance — — Analyst

Yes sir. Sir, like, in February ’22, Mr. Tushar Mehta, Solicitor General, has submitted to Honorable Supreme Court that INR18,000 crore have been recovered from the three defaulter — big defaulter; Nirav Modi, Choksi, and Vijay Mallya. So, sir, how much is the sale of PNB, proportionate share of — out of that recovery and when that one is going to come to our Bank?

Atul Kumar Goel — Managing Director and Chief Executive Officer

We are trying in the process of the recovery also. So it will take some time. We are taking — because some of the amount has been — which have been taken by the [Technical Issues] given to the government, some has been released to us also. So we are taking up the matter. It will take some time. But I think [Technical Issues] around — maybe around INR800 crore to INR1,000 crore [Technical Issues] another six to nine months. That is our estimation.

Priyance — — Analyst

Hi, sir. A few questions, sir, from my side. Sir, you’ve mentioned this SMA 2 number, which has come down from INR10,000 crores to INR4,600 crores, this is from September to as on-date, right, one, two days before?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah.

Priyance — — Analyst

Right. So, sir, this INR30,000 crore is actually corresponding to this INR4,600 crores of SMA2, right, on that basis? If you can share the SMA-012 number as of September number, sir. So that would have more quarter-to-quarter [Foreign Speech].

Atul Kumar Goel — Managing Director and Chief Executive Officer

No, it is not 40, it was 91,000-plus in this September. It was 91,000-plus number because SMA-0 own account if there is one day, 71,614 was the number, which has reduced to 16,183. I may tell you, it is not a — sometime it is not a actual SMA-0, please try to understand, I’m trying to explain that is an accounting issue also. Suppose we have given some loan, we are working on that, we are trying to address that issue also. Suppose we have given housing loan, their installment is due on the second of the month or the third of the month or the fourth of the month. So whatever as on date — suppose we are debiting the interest on the last day the of the month, so system is generating the demand of the interest. It is included in the EMI. So very next day it is coming in the SMA-0, but moment we are receiving the EMI installment, it is brought down immediately. So we are trying to change the system also. So it is an accounting issue. Sometime on account of the zero-day default, it is not an actual SMA, but it is coming.

Priyance — — Analyst

Understood, sir. Understood. And secondly, sir, is there any NPA recovery that goes through interest income in this quarter, or in general also that if there is an NPA recovery, how do we apportion that towards principal, interest and fee?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah, definitely [Foreign Speech]. I told you INR8,564 crore was the total recovery. And if you see my movement of account, total cash recovery and upgradation is 6,497. It means 1,705 has come either in the recovery in the written off account, and either in the recovery in the interest. So I have the number of the recovery in the written-off account is 1,053. If you reduce 1,053 from 1,705, remaining is in the interest income.

Priyance — — Analyst

Understood, very well explained, sir. So the principal or the order would be NII, fee and then lastly in the provisions, right? Is that the way to understand, because that is what most of the banks still got?

Atul Kumar Goel — Managing Director and Chief Executive Officer

It is our — as per the Board policy. It is our Board policy. This I can tell you.

Priyance — — Analyst

Sure, sir. And last thing, sir, because you would have seen a lot of questions on staff cost, it would be easy, sir, if you can bifurcate either now or maybe from next quarter onwards, the proportion into cash, salary and AS-15 provisions, so that there is more clarity that [Speech Overlap].

Atul Kumar Goel — Managing Director and Chief Executive Officer

I may tell you, this particular quarter, around INR300 crore was the AS-15 provision. The remaining was the cash-based provision. Whereas there was a reversal in the last quarter, because I told you, last quarter because there is a gap of the 5, 6 basis point in the G-Sec yield. September it has reduced as compared to the June.

Priyance — — Analyst

Right, understood, sir. Yeah, that is very well explained, sir. Thank you so much.

Suraj Das — Investor Relations

Thank you. The next question is from the line of Mr. Bhavik. Request you to please unmute yourself and go ahead.

Bhavik Shah — — Analyst

Hi, sir. Taking this question further — hello, am I audible?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah, yeah. Bhavik, please go ahead.

Bhavik Shah — — Analyst

Yeah. Taking this question further, so the recovery which is apportioned to NII, sir, what was the amount last quarter? I understand this quarter it was INR650 crores.

Atul Kumar Goel — Managing Director and Chief Executive Officer

INR650 crore? It was on the [Technical Issues] hardly difference was the INR1,500 crore. So you cannot say NII has increased only on account of this count, because there is hardly difference [Technical Issues] INR75 crore.

Bhavik Shah — — Analyst

Sir, will this sustain over the coming quarters? I guess, this will be a function of recovery, right, the traction of recovery or how do we look at it?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yeah. Definitely, recovery, you see in this [Foreign Speech] plus, and we have the target of the 32,000 the whole of the year. This will remain same also. And even in some of the accounts, which is sub-standard also, if they will be upgraded also, the entire money which is overdue, it will come to the interest income only.

Bhavik Shah — — Analyst

Sir, next year, what would be the recovery target then?

Atul Kumar Goel — Managing Director and Chief Executive Officer

I think first we should be in a position to recover INR32,000 crore, then we will set a target for next year also. But next year, I told you, because slippage will be very less, recovery will be the only focus area. So that would be the golden period for the Punjab National Bank.

Bhavik Shah — — Analyst

Okay. And sir, last question from my side. Sir, for example, if repo hike happens today, the reset is on T-plus one basis, or it happens after a quarter [Speech Overlap].

Atul Kumar Goel — Managing Director and Chief Executive Officer

Same. Very next day.

Bhavik Shah — — Analyst

Okay, thanks a lot, sir. That’s it from my side. Good luck and all the best, sir.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Thank you, Bhavik.

Suraj Das — Investor Relations

Thank you. The next question is from the line of Mr. Daga [Phonetic]. Represent you to please unmute.

Daga — — Analyst

Yeah, sir. Thanks for taking my question again. So wanted to ask what is the reason for decline in core fee income quarter-on-quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Fee-based income quarter-to-quarter, if you see, that is on account of the — some exchange income also, some of the processing fees also. Normally the processing fees, we are mostly recovering in the first quarter, that is the major reason. Otherwise not. And if you see the year-to-year also, September 2021 it was 1,162, and it has improved to 1,370. Year-to-year it has increased. But quarter is on account of accounting policies also.

Daga — — Analyst

Okay. Thank you, sir. And another question was that why there is a depreciation on investments in the second quarter despite some moderation in 10-year yields quarter-on-quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

No, that was not the — that was — two type of provision. One is the INR551 crore was in the provision side on account of the NPI — NPI, that is not in the mark-to-market, that is not in the mark-to-market. So whatever the provision is there which you are saying that is we have taken some position also. We have taken some position, because I told you, please remember my sentence also. The 7.50 was the yield in the June and in between 7.19 was also the — it has gone to 7.19. Maybe some position must have been taken. This was the reason of that also.

Daga — — Analyst

Okay. Yeah. Thank you, sir. That was my questions, and all the best. Thank you.

Suraj Das — Investor Relations

Thank you. Couple of questions from the chat window. Question number one was, sir, last quarter you mentioned some 25 billion of restructuring for the earlier restructured scheme, which is CDR, SDR and 5-25 etc. So if you can just provide the same number for the corresponding this quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Number we are restructuring, now CDR etc., is not — as of date, all the account of the CDR, SDR, has already been turned to the NPA also. As on date, only the OTR1 and OTR number is relevant. We have already given. As on date — CDR, SDR, I think we don’t have any outstanding as on date.

Suraj Das — Investor Relations

Okay, understood. One more question from the chat window is relating to your food credit. So if the food — I mean, if we see the RBI data of the food credit growth, that growth is coming down for the last couple of months. And related to that is that one of the larger government, semi-government kind of account has larger exposure, you have some something like INR14,000 crore, INR15,000 crore related to food credit of India. So if you can just provide us what would be the total exposure of Punjab National Bank to FCI and are there any concern in that particular account?

Atul Kumar Goel — Managing Director and Chief Executive Officer

I may tell more thing also, particularly. There is a two type of the food credit. Like you have raised the specific question for the [Technical Issues], some part will be coming under the food credit, some part they are [Technical Issues] from the market which is not coming under food credit. I may tell you, we were having very good exposure on the FCI before September, but as on date, September, apart from the food credit, we are having the nil exposure. Whatever food credit that is there, but apart from the food credit, it has become paid by them.

Suraj Das — Investor Relations

Okay. And sir, how would the exposure to FCI would be divided amongst many lead bankers, like including you and other PSU banks?

Atul Kumar Goel — Managing Director and Chief Executive Officer

That is based on the data. Every year they decide how much share, based on your total exposure to the balance sheet size basis — that is on the base of the balance sheet size of each and every bank — on the basis of the assets of the particular bank it has been divided, yeah, on the same proportion.

Suraj Das — Investor Relations

Okay, understood. And one last question from the chat window is what is the strategy for gold loan business? What is the target for gold loan business going ahead?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Gold loan, if you see the gold loan as compared to other bank, our portfolio was very less. We have revamped our gold loan scheme, which is at par with the industry also. And we have given a good target, around INR4,000 crore, INR5,000 crore for the Bank as a whole for this current financial year.

Suraj Das — Investor Relations

Okay, understood. And I think that was all. I mean that was the last question from the investors side. So I think we can now close this question-and-answer session. I hand over the mic to MD, sir, for your closing remarks.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Thank you. Thank you very much, Suraj Ji, very live interaction with all the analysts also. And whatever — I think whatever their worry and the question also, we were in a position to reply you all the question also. We have noticed some of the suggestion also. One or two, three there was a good suggestion also. So we will try to implement those suggestions for the betterment of the country. So I may I tell only the bank is on the right path — Bank is on the right — why I’m telling Bank is on the right path? Operating profit is increasing, net interest income is increasing, recovery is increasing, slippage is declining as compared to the recovery number, gross NPA is reducing, net NPA is reducing and PCR is reducing.

Only concern, you may be aware also, only the net profit also, because we are addressing the earlier issues also, RAM, because there was a lot of delinquencies with them. So time will come in the — after one or two quarters. I think we will be in a position to show the decent net profit also. So this is my assurance to all the investors also. Nothing more I want to add. I want to conclude.

Thank you to all the persons who have joined this meeting of the announcement. Thank you. Thank you very much.

Suraj Das — Investor Relations

Thank you, sir.