Punjab & Sind Bank (NSE: PSB) Q1 2026 Earnings Call dated Jul. 22, 2025
Corporate Participants:
Unidentified Speaker
Swarup Kumar Saha — Managing Director and Chief Executive Officer
Ravi Mehra — Executive Director
Analysts:
Unidentified Participant
Ashok Ajmera — Analyst
Sushil Choksey — Analyst
Presentation:
operator
Good afternoon, ladies and gentlemen. I am Ganesh Ankarnavar, the moderator for today’s earnings call. I welcome and thank you each one of you for joining us today for the Punjab and Sindh Bank’s earnings call for Q1FY26. Please note that this conference is being recorded. All the participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the opening remarks by the management. Should you need any assistance during the conference call please raise your hand on the Webex Panel or press Star 3 on your phone. I repeat, should you need any assistance during the conference call please raise your hand on the Webex Panel or press 3 on your phone.
I would now like to introduce the management of Punjab and Sindh Bank. We have with us today Sri Swaroop Kumar SA Managing Director and Chief Executive Officer. Sri Ravi Mehra, Executive Director. Sri Rajiva, Executive Director and Sri Arnab Goswami, Chief Financial Officer. I would now like to hand over the conference to Sri Swaroop Kumar Sahasar, MD and CEO of Punjab and Sindh bank for the opening remarks. After which we will have the forum open for the interactive Q and A session. Thank you. And over to you, sir.
Swarup Kumar Saha — Managing Director and Chief Executive Officer
Thank you, Mr. Ganesh. Good afternoon and I welcome all the participants for this Q1 column call of Punjab and Sindh bank which was declared in this board meeting on 19 July. The presentation has already been uploaded. I am very sure most of you must have been able to go through the presentation and the key highlights of our bank’s performance. But I’ll just set to set the context. I’ll just mention a few of the salient features of the Q1 results of the bank. The bank’s total business grew by 10.94% and stood at 2,31,132 crores which comprised of business growth of 8.78%.
And the total deposits was 1,31,182 crores. And the advances were just approximately 1 lakh crore showing a growth of 13.92%. The focus of the bank continues to be on Ram advances. So our Ram advances grew at 17.18% out of which the retail credit grew at 29%. In terms of the profitability numbers, the operating profit for the quarter income increased by 70.35% and stood at 540 crores. For the Q1. The net profit also showed a significant improvement for the quarter and increased by 47.80% and for the quarter the figure was 269 crore. In terms of asset quality the gross NPA has been reduced further sequentially to 3.34%.
The net NPA also was reduced sequentially to 0.91%. The slippage ratio was at a very moderate level of 0.21%. The provision coverage ratio of the bank continues to show sequential increase and it stood at 91.77% and the bank was well capitalized at 17.90%. The CD ratio of the bank stood at 76.19. In terms of the deposits, we all know that the banking system is undergoing challenges on deposit mobilization on the CASA front particularly and our CASA grew at 5.24% yoy. However the return term deposits of the bank is showing considerable traction and it sequentially grew by 5.18% and on a YUI basis it grew at 11.43%.
The ramp share marginally dipped in terms of percentage and in view of the corporate group book lending growing at more than 10.31%. However, this is a temporary blip and I think we will be in line with the overall guidance of having 56 to 57% ramp by the end of the financial year. In terms of the other numbers that we have, the recovery has been robust for us. The bank recovery continues to be robust and we are, we expect that this traction will continue. The core fee income has also grown by 18.03%. We are showing good traction in the core finger.
We have stressing quite significantly in our other third party income and other commission based income. The treasury also has done significantly well in the current quarter and treasury profit for the quarter was 208 crores. That also boosted our operating profits and net profits. The strippages continue to be on the downward side trend. In fact the slippage ratio of 0.21 if if you see the seems to show downward trend in the quarterly slippages and the slippage ratio has been and been contained and and many of the and capital. As we already said the capital adequacy ratio was at 17.90.
We are 17.90 which is a healthy capital in terms of the expansion of the bank’s network and delivery channel. We are expanding and we have created four new zonal offices in this quarter in Q1 quarter at Agra, Moga, Patna, Varanasi. We also have a plan of opening more than 200 branches in the current financial year. We’ll be also expanding our BC network. We have 2,282 bcs. We expect to increase it to at least 4,000 by the end of the year. And the branch expansion will be primarily in the southern part, Central, eastern, northeastern and the western part of the country.
In various new initiatives have been launched during this period which have been highlighted in the bank’s presentation. And I think we can of course on the digital lending side we have taken a lot of new initiatives of. We already had declared that we had taken digital housing and digital vehicle loan. Now we have also introduced the digital ACC. The digital MSME loans which we have started with 25 lakhs. We intend to take it to 1 crore very shortly within 2 to 3 months time. Very various value new added products have been launched both on the liability and on the asset side.
And yeah so that’s. That’s all from my side. We are. I’ll be happy to take the questions.
Questions and Answers:
operator
Thank you sir. We will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. I request the participants to limit their questions to two per person and please rejoin the queue for any additional questions. Anyone who wishes to ask question may raise their hand by clicking on the raised hand icon on your webex panel. For those who have joined us via audio call and wish to ask question please press star3hash. If anyone is having connectivity or audio issues you may share your question on WhatsApp to us at 77-386-88746.
I repeat, if anyone is having connectivity or audio issues you may share your questions on WhatsApp to us at 77386 88746. Before asking the question, I request you to please introduce yourself and your organization. So first question is from the bottom line of Ashok Ajmera. Over to you sir.
Ashok Ajmera
Good evening sir. Sir, of course the June quarter has been a little difficult quarter for I think entire banking sector. It’s a little bit of slowdown is there. But in our. If you look at the profitability, our operating profit because when we compare the numbers we mostly compare with the last quarter. Because if the corresponding quarter of the one year has already gone and within a lot of development has taken place. So the operating profit has gone down from 816 crore to 514 similarly. Hello, can you. Am I. Yeah, yeah, we can hear you.
Swarup Kumar Saha
We can hear you. Please tell. Carry on.
Ashok Ajmera
Similarly, sir. Corresponding. I mean consequentially the net profit has also gone down. The profit after tax also has gone down. And even the business growth though there is a little growth in the advances of 0.35% in this quarter. But out of them I think 533 crores are the purchased or acquired accounts. So in real sense there is no credit growth at all in this in this quarter. Rather I would say you have just maintained it. And similarly sir if you look at the SMA numbers the SMA2 has increased from 120 crore to 558 crores which also is a little bit of a cause of concern.
And the recovery from written off account has also gone down substantially. If you compare with the last quarter from 369 crore to only 109 crores. And real recovery and upgradation has also gone substantially down to 350 crore from 891 crore. One more observation is sir, our AAA advances have gone down from 7,400 to 6,400 almost thousand crore, 950 crores and almost similar amount or 500 crore out of that is increased in AA. Is it because of rating downgrade of those companies or there have been a change in the composition of our credit. These are some of these listing and I I would also like to know about this MTNL account.
I think we have got about 18485 crore of outstanding. So how much has already been provided for because it became NPA in the first question. These are the few questions.
Swarup Kumar Saha
Yeah, thank you Mr. For your questions. I’ll try to answer them one by one. First of all we all know that we work in a financial ecosystem where the first quarter has its own share of challenges and is normally a quarter where we are show slowdown. That’s a historic way of looking into things. And when we look into profitability, I think from my experience what I have gathered over the last so many years is that normally when we look into the operating profit numbers we look it into a YOY basis because profitability is with the business growth and as the business grows overall from quarter on quarter the profitability comes back into the system.
So we should appreciate that the bank has shown in spite of the slowdown that is happening there’s a 70 growth in operating profit I think is a significant number that we can all highlight. And also the profitable net profit numbers which has gone up by 47%. Now of course in terms of the actual understanding of things in terms of the Q4 when most of the things crystallized one of a big chunky recovery had happened in Q4 which also helped the numbers of Q4 so these things happen when the bank progresses during the year and many of the resolutions of credit growth comes back slowly and slowly.
In terms of the business growth we again we like to say tell that the business growth has shown we are not growing in double digits again. It’s a YUI growth. We are nearly touched 11%. We intend to continue with this growth. And as you have seen in the current context credit growth is muted overall in the entire financial ecosystem of various reasons which you are all aware of. In spite of that we have been able to maintain a YUI growth and maintain the growth maintain the numbers as of Q4 which we will which we will take it forward.
In terms of SME2, one of the basic reason was one of the state government we have mentioned in the in the presentation also the rise is due to one of the state government guaranteed account which has moved to SME2. But it’s a state government guaranteed account and and it’s off and on it comes to standard and SMA category. So as of now we don’t feel any any big threat from that from that account recovering right of accounts. You have mentioned sequentially it has gone down. Yes, I have told you that Overall in the Q4 there was one chunky recovery from the NARCL transaction which helped the recovery.
In Q4 we continue to keep a guidance of having a healthy recovery and upgradation for the current year. Similarly your the same logic goes for the recovery upgradation. What we should appreciate is that we have been able to maintain what the sequential point which I like to tell you is that in terms of asset quality we continue to maintain a sequential improvement both in gross and net NPA and that doesn’t include any write off during the quarter. So I think the point needs to be appreciated also that when we talk of sequential improvements or sequential deterioration, this point also needs to be kept in mind.
In terms of the aaa there’s nothing to be worried about. It is fundamentally because. Because the we are. We all know that the income is also very important for the bank. We have been talking to the analyst on the investors that how we will be rejigging our portfolio between the AAA’s A’s and the double A’s. And this is exactly what we find that in the AAA’s we will. We will be able the pricing war that is going on in the ecosystem. We get a better bargain in AA. Ultimately profitability if you are looking out you will appreciate that the profitability comes from the AS and the double A’s.
While the asset quality is important. We’ll also like to see that how we maintain our margins and that’s why we are rejigging our portfolio and moving towards AAS and AS which gives us a better pricing margin and MTNL. The exposure that we have, we have around 180 crores of exposure. It was fully provided out already in September 24 itself sir.
Ashok Ajmera
No thanks for all this clarification and definitely I, I agree that the, the positive things are there. Also the asset quality has a little bit improved and yes you have compulsions of the June quarter being a very slow quarter especially this year. It has been witnessed in some other banks also. Having said that sir, then we can visit the the targets or the guidance for FY26 like you have given the credit growth advances growth of 15 16% deposit growth of 8 to 10% and so whether now in the remaining three quarters or say eight and a half months achieving this 15 to 16% credit growth is still, I mean the target is still intact.
Yes, similarly for the recovery upgrade, the thousand crore recovery and upgrade. So all those guidance which are given for FY26 remains intact?
Swarup Kumar Saha
Yes, yes Mr. Ajmera, it all remains intact and we are very confident we will achieve them. Sir.
Ashok Ajmera
Now coming to this rate cuts and you know the impact of that. So, so what is the composition of our book in EBLR and MCLR and is there any other like small fixed rate and how much, how much of this has been both sides income side and expenses side has already been factored in and the the remaining load is still there of the revising the mclr.
Swarup Kumar Saha
As far as the data point that you are asking for we have 46% of our book in the EBLR component so that remains and we have also some of the. We have started in a short way in repro in the MCLR cut but that is very not significant at this point of time. We still have sufficient room to work on it slowly. Therefore you see that is what exactly I have been also telling in my past interactions with all of you is that we knew about this situation would come of three quarters ahead before and when we were going into the market to raise capital, whether it was bonds, whether it was equity, we were telling that how we are going to combat this threat on the margins do a possible rate cut and we were contemplating also 100, 100bps cut quite early.
So we have been able to restrategize our book and that’s how the concept of moving towards the AAS and the AS came In that’s how the concept of increasing more and more increasing the advances in the high yielding assets like Gold loan, personal loan, Education loan, Agricultural loan. So those are the strategic thinking that we have already put in place. And this, this will play out slowly and slowly. We all know as the, as the deposit. We have also repriced our deposit products. Now we have been. We have cut our deposit rates in savings. We have cut our deposit rates in our.
The. The fuse deposit, retail term deposits. We have brought them considerably down and therefore our cost of deposit has also gone down. And we feel that these things will pan. This will play off in the next two, three quarters. Of course there will be a impact on the margins immediately for the next two quarters. It will continue to happen. And after that, maybe from the Q4 quarter when things even out in a much better form and when the growth comes back in the last two quarters to the level which we expect the margins will get, will get mitigated.
The set of the margins will get mitigated in that respect.
Ashok Ajmera
So, so does it mean, sir, that with the future two rate cuts are expected of 25 bips? 25 bips means about 50 pips more. And still some of this have to be factored in the previous ones. What, what kind of a NIM on annualized basis for FY26 can we expect? Can we go back to that 2.71, 2.78 or we will remain at 2.5, 2.4?
Swarup Kumar Saha
Sir, it’s a too early call at this point of time. Maybe we’ll observe for one more quarter. But in terms of our aspiration, I would like to say is that we would like to reach that level, whatever number you just said. But to tell it exactly whether we will reach or not. I think I’ll be in a better position when I interact with you after the Q2 result.
Ashok Ajmera
All right, sir, if I get some time again, I. I’ll come back again. Let others have the chance.
Swarup Kumar Saha
Thank you. Thank you. Thank you Mr. Thank you.
operator
Thank you. We will now move on to the next question which is from the line of. Choksi, over to you.
Swarup Kumar Saha
S. Good afternoon, Mr. Choksi. Hello, are you there? Mr. Chokshi, are you there?
operator
Hello?
Sushil Choksey
Hello, can you hear me?
Swarup Kumar Saha
Yeah, I can hear you now. Yeah, please go ahead.
Sushil Choksey
I think my call was muted. Sir. You raised equity and you raised infrastructure bond. You have strategized the bank to transition in the low interest rate regime. First is can I know what kind of initiatives we’ve done in the bank in terms of Product co lending how to increase ram what strategies have we done to increase our TAT on visibility? Because our ram is at 57, 58, corporate is at 42. The thing is that to improve yield and specifically our visibility on a sustainable basis on a quarter. On quarter basis rather than a rush at the month ends only.
What have we done that the bank would be visible in terms of client size whether it’s corporate or retail?
Swarup Kumar Saha
Yeah, thank you for the question. I know this is a very important question that you have raised in terms of post the. Our raising of funds from the market. So the bank has taken various initiatives to. To re brand our liability and asset products. Some of them are indicated in the presentation. I’ll not go through them. But the point is that innovation is important to. To be in the market. So therefore we have been able to. We have now customize various liability products both from the savings and the current side and also trying to reach out to the customers so that we.
We don’t miss out on the. On the retail liability base. We. We know that the CASA is a challenge and that’s a challenge all the banks are themselves facing. And you will find that in terms of. Though it’s nothing very significant but still I just make it a point of mention here is that if you observe the degrowth in the CASA ratio of many of the banks we have been at least we have also degrown. But our. Our growth or de growth was a shared lesser than some of the banks which have grown at a fast which has de.
Grown at a faster rate in the CASA ratio as such. So there is a challenge in that. But on the overall side we feel that while that is a challenge we have to do outreach to the customers. So we are trying to hold on with the CASA plus retail term deposit overall portfolio. And if you see that on a sequential basis the retail term deposit has grown by 5% and that is quite significant in terms of the overall liability resources by. And this is happening because of our various initiatives that we have taken to rejig our.
To re. Customize our. Our. Our salary products, our parivar accounts, our special accounts for students, special accounts for the farmers. So these things will all play out as we move forward. In terms of the. In terms of the lending, you raised the issue of the tat. Yes, we have also gone into the digital mode. Now 2/4 before we had declared that we are doing vehicle loan and housing loan which can be sanctioned between 15 to 30 minutes. In principle. Sanctions can be given to a customer even on a holiday so now we have taken that forward and now we are in the MSME segment also and the agriculture segment also.
MSMEs we have opened up up to 25 lakhs. You just like to understand on a pilot basis maybe by September we’ll open it up for, for the entire bank and take it up to 1 crore by the end of the Q3. So there again the, the. The issue of the turnaround time would be taken care of in terms of our products also within the asset side have customized lots of products. Whether it is agriculture, whether it is mse, MSME cash flow based. We are also now venturing into a supply chain management. I think the, the integration is going on with our vendor and very shortly we’ll be announcing it will happen sometime in Q2.
So that will again give a good range. One of the important product amongst the entire bouquet of the products we have also tied up with various car manufacturers. We are also on the digital, on the digital car loan we have a tie up with one of the biggest manufacturers, car manufacturers in the country and which is also slowly taking traction and we’ll continue to do do it with other car manufacturers also. So we are in a, in a situation where innovation is being taken very seriously. You mentioned about co lending. Yes. We are already having a portfolio around 3000 crores plus in co lending amongst the various NBFC partners.
We are looking into it by expanding and we have taken a call that we will be increasing this portfolio quite significantly in the next 2 3/4. As of now the experience of the co lending both in the retail and the MSMEs are excellent. We don’t foresee any challenges. We think we have a lot of room where we can increase it further and get a better pricing on those products. So overall on the initiatives that we have taken we think that we’ll be able to manage the expectations of all the stakeholders.
Sushil Choksey
So in the core lending, how many partnerships have done for 3000 crores and how many partnerships are visualized over a period of this year in next nine months?
Swarup Kumar Saha
Mr. Mehra will answer that.
Ravi Mehra
Good afternoon sir. We have around 12 partners in the present scenario for co lending and we are, we are expecting to add around 8 to 10 more partners going forward.
Sushil Choksey
Can we assume that this 3,000 crore book can be heading towards 10,000 crore by March end?
Ravi Mehra
May not be that that number may not be there but definitely substantial grades will be there.
Sushil Choksey
And are we working with approximately 9% yield on coal ending?
Ravi Mehra
Yes.
Swarup Kumar Saha
Yeah.
Sushil Choksey
Okay. Second thing sir, you have rolled out all the digital products where consumer Finance whether it’s car home loan. As you said it, every quarter we see DLF and some of the large developers in Delhi NCR sales selling thousand crores worth of flats. When you look at luxury car market there’s no better market than Delhi and NCR or northern India even better than Bombay. In such scenario what kind of market share we are likely to target where home loans are concerned or car market is concerned? Third is we are one of the unique banks among peer who do secondhand car financing via NBFC or directly.
Are we likely to target some hilding portfolio where the second hand cars are concerned?
Ravi Mehra
Yeah actually with regard to the. You can say the vehicle loan portfolio we have grown by approximately 40% yoy if you see the numbers and more importantly just want to add what MD sir was saying that the digital journey for retail loans particularly towards the home loan or vehicle loan just in the last six months when we started in December we have added around 10,000 customers, onboarded 10,000 customers of home loan vehicle loan through digital journey approximately 1500 crore rupees was the amount of loan that was sanctioned to them. Going forward definitely we are into this second hand car loan, vehicle vehicle loan as well and we’ll be tying up with the major dealers for this and we’re also bringing up more products into digital spectrum like gold loan, personal and other things as well.
So definitely your market share for at least vehicle loan is going to increase substantially.
Sushil Choksey
Sir where NCR and Delhi housing market is concerned which can be like a 5000, 10,000 crore pocket for you in a year for this 1020 crore flats. What kind of tie ups have we done for that?
Ravi Mehra
Sorry. Yeah, yeah definitely
Sushil Choksey
for the larger houses.
Ravi Mehra
Yeah we are in the process of approving housing projects in Noida, Gurgaon and other areas as well for Delhi ncr.
Sushil Choksey
I’m not talking about sir, I’m not asking from financing, construction, finance but are we having a builder tab that the home loan.
Ravi Mehra
That’s what, that’s what I’m saying. That’s what I’m saying sir. Builder types are also being increased and we can say that housing societies wherever the already constructed flats are there we also tying up with them and particularly Noida and Guang because major market share is there and definitely going forward maybe within next two quarters you’ll see the. Results in this
Sushil Choksey
in co lending if I assume let’s say we are a 10,000 crore portfolio over a period of 3/4, 4/4, 5/4 what would be the mix between gold loan Lab, MSME or. Housing
Ravi Mehra
as of now, as of now my gold loan out of this, my total coal lending portfolio 50% is housing and 50% is lab. That is MSME. I don’t have as of now that golden portfolio. Once we adopt that platform for co lending because for gold one we need to have some platform for this. So definitely you can say if you target the number of 10,000 crore rupees maybe home loans will be somewhere around 4,000 5,000 crore rupees and MSME 4,000 gold only 2,000 crore rupees.
Sushil Choksey
So right now co lending will be via platform soon. But sooner or later will we integrate the same with our core banking solution too?
Ravi Mehra
Yes sir. Yes sir
Swarup Kumar Saha
is in a very advanced stage.
Ravi Mehra
Very advanced stage Very shortly will be like.
Sushil Choksey
But that is a app based so not a core banking solution.
Ravi Mehra
No, basically platform base is that the account gets opened automatically in the system.
Sushil Choksey
I get your point. I get your point sir. Now understanding where treasury is concerned. Sarup sir, you’ve been quite handy where the subject was concerned. I yesterday on one other peer bank call the ed in charge said that he SEES repo at 5% by March end and 10 years G SEC below 6. What is your view first on the outlook of the Treasury?
Swarup Kumar Saha
Yeah I am not an astrologer first of all so I don’t know but I can still personal my view is this that in view of the market situation I still feel that a room is being created for a further cut between 25 to 50bps. But I my own personal perspective I feel that this should, this should evolve post December.
Sushil Choksey
Yeah second half I mean in last quarter if it comes through what would be our treasury gains and how are we positioned to garner? Because you are visualizing at a personal level or a bank level how are we visualizing our treasury operations to function by margin?
Swarup Kumar Saha
Yeah, yeah fine. So you see my Q1 numbers. If you see we had. We had. We did, we did. My Treasury Department did pretty well at 208 crores of treasury that we have and that was the result of the movement that has happened over the last one quarter and a half going forward we feel that of course there has been a post April summon the announcement the ails moved in a bit in the wrong direction. But if we predict if we see that if what I just envy told you if I envisage what has happened, what if it happens the way I’ve envisaged it I think we’ll have a sufficient good traction in our treasury income.
We’re all prepared for that and we are all Prepared for the waiting for the opportune moment to encash on the movement that can happen. But the if, if it is of any significance contribution I think it will be post Q3 and maybe Q4, not before that.
Sushil Choksey
Are we taking some benefit out of corporate bond market because of the treasury benefit advantage what we are getting today?
Swarup Kumar Saha
Yeah, we are. As per our appetite we work on the bond market also.
Sushil Choksey
Okay sir, the next question is India is in a transformation journey that whether it’s the present government or some corporates who are leading to a large manufacturing base coming in India be it Apple or the Korean shipbuilding yards or GCC centers which can be a big employment and Delhi NCR figures in that list because of certain positivity. Similar is like Bangalore and other educational hubs. What kind of capabilities are we creating when transformation of India is happening and PSB wants to transform how would we capture whether it’s a customer at a consumer level or such manufacturing destination which are emerging in India?
Swarup Kumar Saha
Yeah. See as we go through our own transformation journeys on our product we have also created a strategic, a pan India strategy for a pan India strategy for how we will tackle this. This expectation. So there are manifold. You know I don’t know whether I have the time to speak on the entire thing today but just in a brief I would like you to tell. I like, I like you to tell you is that suppose one of the biggest things that we are doing is of the. We are spreading our mid corporate branches far and wide.
You know yesterday I was in Trivandrum designating a branch in that branch as a NRI branch before two months before that I was in Trissur in same belt opening a branch and trying to capture the business in the. In the state of Kerala. So down south we have a lot of focus. We have. We have created various branches across the country where we find whether it is Bangalore, whether it’s Hyderabad, Vijayawada, Orissa, Bwar, Chhesgarh, Raipur, Mumbai, Thane, Nasik, Nakpur. Everywhere where we look into we have created specialized branches whether it is an MSME potential area through cluster based approach or a mid corporate branch through the manufacturing hubs that are prevalent in those areas.
So we have created those branches. We have posted senior people, skilled fours and fives in these branches where we were not there hitherto because we were not there in those areas Significantly so and 200 branches out of the 200 odd branches that we have planned more than 160 branches would be in these areas which I just mentioned. So a Lot of focus will be on this branch expansion. And according to that those as we move along with the branch expansion initiative we’ll be able to cater to the requirements of the localized business there. We have also done tie up with warehouse development regulatory authority for the e for the financing e warehouse receipts.
That’s attraction. That’s an area like Bhopal and Nagpur gives has a lot of potential there something in the north we have also created the bank has also thought about in the agriculture segment in the food and agro processing. So there again we are giving focus on food and agro processing units cash flow based lending for the MSMEs. And so it’s. It’s a manifold increase creating new zones that again gives a lot of impetus to the local administration. I mean in terms of bank administration general offices who develop much more deeper into the unpenetrated markets. So now we have at Moga we have Agra, we have Varanasi, we have Patna.
We are looking forward which is still the aspiration but we’re looking forward for Bhuvaneshwar, Bangalore and Raipur. So these will be our three areas of focus in the. In the next one year or 18 months or so. So we are creating and as we move along we will be able to tell you what we are doing.
Sushil Choksey
Sir, my next question is what is unavailed credit and what is a credit sanction pipeline looking for the quarter.
Ravi Mehra
Somewhere around 7,000 crore rupees going forward?
Sushil Choksey
Unavailed credit or unavailed and sanctioned?
Ravi Mehra
Unavailed and sanctioned both.
Sushil Choksey
And what is the credit pipeline? What is in the system looking like.
Ravi Mehra
Credit pipeline will be somewhere around.
Swarup Kumar Saha
So what if what you know that you know we are reading every day the stress. Not the stress the. The challenges of credit growth and we will. And in. In terms of the liquidity that is happening many of the big corporates are still going to the market for raising bonds and not availing limits from the banks. They’re sitting out in lot of cash. So availment of from the corporate segments is a challenge which we have to. We have to face. In fact in view of the huge liquidity that is in the system the alternative modes of funding is.
Is available to the corporates and they are resorting to having them. So but we still get in terms of the sectoral areas of where we look into. We are looking into the refinancing of whether it is real estate, whether it is road projects, renewables segments under the PLI segments. So it is some manufacturing units. So the overall demand is muted. But within that muted demand. We feel that we are working very cautiously and trying to build up our portfolio but the demand of course is muted.
operator
Thank you sir. I request all the participants to kindly limit their questions to two and rejoin the queue for follow up question. We will now move on to the next question which is from the line of RAN s over to you sir.
Unidentified Participant
Good afternoon. So so I have some of the questions that I have incorporated in the chat box if you can because there is some kind of a network issue on my sides. Just can read and just answer to them if you can.
operator
I’ll read out the question.
Unidentified Participant
Sure sir. Thank you.
operator
The first question on behalf of Riyan Syed can you share updates on the progress and traction of the PSV unic app and the recent WhatsApp banking integration over to you sir.
Swarup Kumar Saha
Yeah, we are focusing on the digital journeys. Our digital transactions has crossed 90% overall and therefore the there’s a lot of traction. The registrations have also started increasing. We are over active users are over 10 lakhs now. So we are giving a lot of focus on on the digital journeys. WhatsApp banking is also in a. In a it is. It is live and I think we are. We are also getting good traction on on how the customers are interacting on the WhatsApp. In terms of the CASA ratio I can read the questions now. I think we have already answered that question in our form CASA ratio dropped to 30.6% are the initially yes we have we have taken a lot of initiatives customizing our products asset liability products.
We have strengthened our app to market CASA mobile app. We have also good salary account packages. Our teams are on the ground whether it is the defense account, whether it is teachers accounts, whether it is municipal corporation accounts, whether it is administrative office civil servants accounts. We have good traction there and we will we are getting good results ultimately is ultimately how we do outreach for the for the CASA and brittle products. In terms of in terms of the infrastructure book there is no conscious de risking strategy. It is just that first quarter normally is a is a slow quarter in terms of infrastructure business.
We are in the process of we have a lot of in principle sanctions and unavailed sanctions on the infrastructure roads particularly and renewables. So there is no conscious decision of de risking the strategy but it is just a slower offtake as I said that there is a muted demand in the market and in terms of the name that you said ask that 1:1 of games are there any similar items equal that should be or no there is no such similar item for Q1.
operator
Thank you sir. We will now move on to the next question which is from the line of Nikhil Takur over to you sir.
Unidentified Participant
What was the slippage ratio of Q1FY26 and is the bank on track to maintain full year slippages below 1.25% and the second question is post QIP what is the CRR in CTT1 level in Q1 and do you foresee any need for further capital raising in FY26?
Swarup Kumar Saha
If I heard there was some disturbance on the audio but if I. I can understand the principal question that you are asking in terms of the slippage ratio as I said it is. It is at 0.21 for the quarter the overall slippage ratio has got sequentially moved downward. It is on a downward trend on a positive trend. In terms of just if I see the yoy numbers in March 24 quarter the slippage ratio was 0.47 and if and if you go through it quarter on quarter from June then September, December, March and again June here we have reached a level of 0.21.
So we expect that the slippage ratio will be our guidance on the slippage ratio. We will be able to attain our guidance on the slippage ratio and the annualized is 0.84 at this point of time and we will be able to meet that target. In terms of the other question on capital the capital adequacy ratio stood at 17.90 post the raising of the the capital and the CET one was at 16.02. I. I just missed that part of the question. If I answered it correctly please let me know or I can take a follow up question if I have not answered it properly.
operator
Thank you sir. We will now move on to the next question which is from the line of Bhaviksha. Over to you sir. Hello Mr. Bhavik.
Swarup Kumar Saha
Hello. Good evening Mr. Bhavik.
operator
We will continue to then move on to the next question which is from MB Mahesh. Over to you sir.
Unidentified Participant
Hi, just two questions which is on slide number 12. If you could just kind of give us a understanding on this reduction in cost of deposits from 5.74 to 5.66. What would be the contribution of term deposits versus any reduction in SA for the quarter.
Swarup Kumar Saha
The see the deposit. As I said during my submission of some previous questions we were forcing the the possible red cuts maybe two, three, four months ago and we were conscious of when, when, at what time we should reduce our deposit products. So we were in a early movement. Our bank has Moved early. In terms of the reduction of the first of all I will reduce the savings. Then we reduce our retail term deposits. Some of the flagship deposit products that we had which were giving we were providing for at the range of 7.45%. Also we brought it down to 7.25 and now we have brought it down to 6.90.
So that is a gradual reduction we have done and that’s how this, this is impacting. This has positively impacted the reduction in the cost and we also have shared a bit of bulk deposits and that also has evened out during this quarter. So overall our deposit cost has come down.
Unidentified Participant
Sorry, if you could. Can you just kind of give us numbers as to what was the average CASA rate or SAR rate for last quarter and this quarter and what was it on the term deposit side for last quarter and this quarter in terms.
Swarup Kumar Saha
Of interest rates or in terms of the.
Unidentified Participant
Yeah, in terms of what. At what the. What is the portfolio carrying at the.
Swarup Kumar Saha
Savings rate and 35,000 crores. Actually you want the average carry that my team will be able to tell you I don’t have it at this point of time, but I’m giving you a range. Our savings deposit is rate is now at 2.5% and our little term deposit is at 6.90, the highest rate that we have.
Unidentified Participant
Yeah, but that will be slabs, right? It’s not the.
Swarup Kumar Saha
We have slab wise. Yes, we have slab wise that my CRO will be able to. My. I’ll tell my CFO to share with you separately.
Unidentified Participant
Perfect. And second question is this same slide. Your yields have declined from 8.63 to 8.47 by the end of this quarter. This 8.47 goes where based on the current decline in yield
Swarup Kumar Saha
this quarter. This Q2.
Unidentified Participant
Yeah, in Q2.
Swarup Kumar Saha
Yeah, this will move in the reverse direction now means the positive.
Unidentified Participant
Yeah, but in the sense what, what is the quantum that you’re. That you are expecting this to be?
Swarup Kumar Saha
As I said that this is very. In terms of quantifying the number, you know, it’s very dynamic now in the market so we have to see very careful in how we, how we pace ourselves in this. But the bottom line which would be important for all of us to understand is that we will. This will have an uptick as my advances grow and as my advances on my mclr linked loans also grows, this will continue to move in the positive direction. At one point maybe I’ll be able to tell you as I talk in another reply to another question a few moments earlier, maybe A much more firm figure I can quote after Q2 but as of now I can say it will move on the upward trend.
Unidentified Participant
Okay, just one question. This 2.52 net interest margin still where are you comfortable that it declines before you need to start taking far more serious action on the deposit side?
Swarup Kumar Saha
Yeah. I think at this point this is the level where we are. We have been below this also. Now I think this is the optimum level where we. We think if. If anything is it doesn’t work out we of course will take further action. But I don’t think at this point we are in that situation.
Unidentified Participant
Okay. Okay. Done. Thank you.
operator
Thank you sir. We will now move on to the next question which is from the line of Bhavik Shah. Over to you sir.
Unidentified Participant
Hello. Hey. Hi. Hi. Apologies, some technical error earlier. Yeah. Just two questions. One was on movement of SMA 1 and 2 book. So last quarter we had SMA 1 of 623 crores and SMA 2 of 120 crores. This quarter we have SMA 1 and 2 of 572 and 558 crore. So understand there would be two lumpy accounts. One would have moved from SMA 1 to 2 and second as in would have come into SMA 1.
Swarup Kumar Saha
Yeah.
Unidentified Participant
Any broad color of what these accounts are, what’s happening there?
Swarup Kumar Saha
We have already made it in the clear in the presentation.
Unidentified Participant
Yeah, it just says one corporate account. Any other color would be really helpful with sector. And any nature of what’s happening we.
Swarup Kumar Saha
All know is all the names are in the public domain.
Unidentified Participant
Okay, okay, okay. Answer. Just want to check on nbfc. Is there demand? How are you catering to demand? What are the incremental yields you are charging?
Swarup Kumar Saha
Yes, NBFCs are always. Their demand will always be there. We also have a lot of demand and we will be pricing our product and our exposure. We are already at 14 odd percent. I think we like to keep it at that level. But there is a lot of scope for churning within the NBFC exposure that we have. But to answer to your question pointedly is that yes there is demand.
operator
So as we are running out of time we can take one last question. So we will move on to the next question which is from the line of Ashok Ashmira. Over to you sir.
Ashok Ajmera
Hello. Can you hear me sir?
Swarup Kumar Saha
Yeah, yeah. Please, please carry on.
Ashok Ajmera
Sir, I have just one some observation and discussion on with this RBI relaxation on taking the collateral from the farmers for the agriculture is for the lower loan amount of below 2 lakhs to take collateral gold so that becomes now little easier for the banks to lend money small loan amounts. So have we prepared any, any kind of our plans on that to increase our agri loan portfolio?
Swarup Kumar Saha
Yes, we have. Yes that is a positive development for the banks and we will, we will be taking full advantage of it.
Ashok Ajmera
And any, any kind of like some numbers or something that in the coming quarter or two how much money can we disperse or can, can we lend?
Swarup Kumar Saha
Yes, with the. The guideline has just come. It is. I think we are working on exactly what, what is a portfolio. We can build on this. The color will be shown after Q2. Okay sir.
Ashok Ajmera
Ed regards, our MSME loan book or even little bit of corporate. What kind of inquiries we are having. I mean from where this, this requirement is coming and what is the status of our already sanctioned book or sanctions in pipeline? Any number can be given on that so that we can have some idea about this achieving 14, 15% of the target. That which are the segments from where the demand is coming.
Ravi Mehra
Yes sir. With regard to the pipeline definitely as I told somewhere around 7,000 crore rupees of pipeline is there sanctioned and unavailed. And the segments in msme you can say cluster wise segment we are also looking at specialized trading and this manufacturing as well specialized sectors like sports in Punjab, Aussie. And with regard to the corporate. Yes. MB sir told that infrastructure, road development and this energy that is going to be our main focus.
Ashok Ajmera
This renewable energy like solar as per our experience there is a lot of demand because the overall basic capacity for the basic thing like the sale capacity is also increasing. PV module capacity, manufacturing is also increasing. So downstream there is lot of opportunity in this particular segment which even in our own experience, in our own office, I mean there are a lot of such inquiries in the proposals. So as a bank I think we also must be focusing on this because there is a lot of scope in renewable energy. And the loan amount you know like can vary from small 1 megawatt to so maybe around 3423 crore rupees to maybe 20, 25 crore for those small.
And many of them are under the government schemes also. Like in Maharashtra there is a Kusum scheme where lot of such projects are being put up. People are getting the contracts for 5 megawatt, 10 megawatts, 20, 30, 40. Similarly in Rajasthan also there is lot of scope. We know a few parties like they are getting from Rajasthan government to set up the cluster based renewable energy plant. So I think we can we should focus on those kind of projects where even the government is involved. PPAs are signed. And there is good opportunity there, sir.
Ravi Mehra
Yes, definitely sir.
Swarup Kumar Saha
You’re right. You’re absolutely right, mister.
operator
Thank you sir. We will now conclude this conference. So should you have any further queries please reach out to Mr. Ganesh Shankarnawar at 77738688746 or Ganesh at the rate conceptpr.com Details are mentioned in the webex chat and the analyst invitation sent to you earlier. On behalf of Punjab and Sindh Bank I thank each one of you for joining the conference today. You may now disconnect your lines. Thank you. Have a good day ahead.