RBL Bank Ltd (NSE: RBLBANK) Q3 2025 Earnings Call dated Jan. 18, 2025
Corporate Participants:
R Subramaniakumar — Managing Director and Chief Executive Officer
Jaideep Iyer — Head – Strategy
Unidentified Speaker
Rajeev Ahuja — Executive Director
Bikram Yadav — Head – Credit Cards
Analysts:
Mona Khetan — Analyst
Rikin Shah — Analyst
Piran Engineer — Analyst
Kunal Shah — Analyst
Anand Dama — Analyst
Lavish Kolwal — Analyst
Jai Mundhra — Analyst
Darshil Jhaveri — Analyst
Suraj Das — Analyst
Rohan Mandora — Analyst
Aditi Nawal — Analyst
Shailesh Kanani — Analyst
Shubhranshu Mishra — Analyst
Pranuj Shah — Analyst
Prakhar Agarwal — Analyst
Aditya Bagdia — Analyst
Presentation:
Operator
Please wait while you are joined to the conference. The conference is now being recorded ladies and gentlemen, good day and welcome to RBL Bank Limited’s Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr R. Kumar, Managing Director and CEO of RBL Bank. Thank you, and over to you, Mr Kumar.
R Subramaniakumar — Managing Director and Chief Executive Officer
Thank you, ma’am. Good afternoon, ladies and gentlemen, and I thank you for joining us for a discussion on our Bank’s financial results for the 3rd-quarter of the financial year 2025. We have uploaded the results along with the presentation on our website. And I hope you have had the chance to go through it in detail ahead of this call. I am as always joined on this call by Mr Rajiv, Executive Director of the Bank and other members of our management team to address any questions that you may have. Before coming to our results, let me take a couple of minutes on our take on the current macro-environment. We have witnessed a few headwinds, including some moderation in the overall economic growth, pressure on the rupee, a relatively tight liquidity conditions despite easing of CRR by 0.5% recently. All-in the backdrop of fairly uncertain geopolitical environment. This has clearly delayed the easing cycle that wasn’t expected, say, six months ago. In this backdrop, the environment of deposits remains fairly competitive. The other theme which has kept all of us concerned is some challenges on asset quality, though largely restricted to the unsecured segments, we will take you all through what we are seeing here in little more detail in few minutes. First, on what has worked well. Our wholesale and secured retail businesses which comprise of mortgages, business banking and wheels have continued to grow well, especially the build-outs in affordable space. The returns from all these businesses, despite the ongoing scale-up more in secured retail, has delivered yena to cover the increased credit cost in unsecured segments. We have seen a 13% Y-o-Y in advances this quarter with the wholesale growing 5% Y-o-Y and total retail growing 19% Y-o-Y. We were carrying low-yielding tactical balances in the wholesale same time last year, which have now given way to a better risk-rewarding exposures. Within wholesale, commercial banking, that is the mid and small corporate segment grew 21% Y-o-Y. The secured retail advances grew by 38% Y-o-Y, in-line with our plan to grow this as an identified focus area. Given our higher-risk focus in response to the market dynamics that JLG, the Joint Liability Group segment has been lower both Y-o-Y and sequentially. In credit cards, including personal loans, the growth was 8% Y-o-Y, but lower 2% sequentially. The deposit quality has continued showing strong trends, while I did allude to the general competitive dynamics relating to the growth on deposits, we are happy to see continued improvement in granular retail deposit growth. Our total deposits grew 15% Y-o-Y and were lower 1% sequentially. However, granular deposits grew 20% Y-o-Y and 3% sequentially. Similarly, while the — while period ended, CASA balances grew 12% Y-o-Y, but degrew 3% sequentially. Our average CASA balances grew 14% Y-o-Y and 4% sequentially. And what we are doing to navigate some near-term challenges. We have been taking active steps to tackle the headwinds — headwinds both in the rural, that is JLG loans and the urban consumer that is the credit cards that is over-levered. We have been cutting risk and increasing focus on recovery. In credit cards, the slippage was INR533 crores as compared to INR606 crores last quarter. We had spoken extensively on the transition impact last quarter. I’m happy to share that the team has now stabilized and we are continuing to see improved trends in both arresting slippages as well as resolution rates in delinquent pools. We had said in the past that improvement will be seen in Q3 and will become even better in Q4 and we continue on this track. In JLG, we have seen elevated slippages this quarter. The net slippages at INR521 crore as against INR231 crore last quarter. This was expected given high SMA one and two balances that we had seen as at September 30, 2024. In the JLG segment, the situation on-the-ground has been in a flux for most of the past months, but December has seen the first material uptick in collection efficiency and the recoveries of old NPAs. We saw a good improvement in bucket one collection efficiency in December 2024 at 98.4% as compared to September 2024, which was at 97.5 percentage. However, as October and November were relatively similar to September levels, we expect the slippages to be broadly similar in Q4 as compared to Q3. We expect to have a better resolution rates from delinquent buckets and also higher recovery from NPAs. The improving trend witnessed in December, which we believe should sustain and improve will result in material reduction in slippages Q1 FY ’26 onwards. We are monitoring Q4 and if the collection efficiency continues picking-up, we can feel a bit more confident of where this business will finally settle. This situation is being addressed through additional provisioning in this quarter. We continue to carry contingent provision of INR273 crores, which will minimize impact of higher-than-normal trend slippages. And this along with the steady PPOP, which we built consciously over a period of time will hold us in good stead. Also, we are observing weaknesses in the consumer segment, both rural and urban and therefore, we have started taking risk actions so that there is no outsized impact for us in FY ’26 and beyond. This includes taking risk mitigation steps such as CGFMU cover for incremental disbursals in JSG. We now have a cover on approximately 42% of disbursals in this segment, which was 25% in Q2. Now what does it mean for the growth? Our growth opportunities come from our wholesale and secured retail business, which continued to deliver growth, quality and profitability, and we continue to grow this steadily without impacting the financial dynamics. Our secured retail business grew well with a large focus on branch catchment area customers. The affordable finance business is still young, but talking good quarterly growth. This is more a medium and long-term play for us. And here we are not chasing just yield, but focused on reasonable ticket side with customers for whom we can be meaningful full-service bank in the future. Our PPOP this quarter plus the two one-offs that will discuss in more detail have given us enough resources to substantially provide for most of our JLG paying up to this quarter. Thus, we have lower NNPA of 0.53% and a higher PCR of 82.2%. We hope we can do the same in Q4 through our contingency reserve, which we haven’t utilized thus far. The primary objective is to establish clarity on focus area and ensure clear risk guardrails while recovery efforts continue. Lastly, to summarize, our objectives of strengthening the balance sheet on both the sides. Quality asserts and the granular deposits will continue and in fact increase in pace, notwithstanding the near-term challenges in unsecured lending, which in a measured way will continue to moderate as a proposition — as a proportion. As such, with these measures, we are minimizing any potential impact on the balance sheet stability. Our risk filters across the organizations have been strengthened in response to changes to the macro-environment around us. Our biggest achievement and priority has been to ensure coherence in whatever we do. While we started RBL 2.0 as a set of core independent business verticals with no material cross-sell and cross-leveraging resources. We have over the last two years, achieved a significant consolidation by way of operating synergies, cost, customer segments and most importantly, making customers part of the overall bank franchise. There is a long journey ahead of us on this. And this we believe is the strength that will stand us well not just in FY ’26, but years beyond and in some manner,
Operator
Excuse me, sir, I’m not able to hear you are not audible. Ladies and gentlemen kindly stay connected while we try to check the connection of the management.
Ladies and gentlemen, thank you for patiently holding. The line for the management has been reconnected. Over to you, sir.
R Subramaniakumar — Managing Director and Chief Executive Officer
Sorry for the disruption and this kind of disruption will continue to come, be it a business or be it a technology, we are very well-prepared to face and get-out of it successfully. Our biggest achievement and priority has been to ensure coherence in whatever we do. While we started RBL 2.0 as a set of four independent business verticals with no material cross-sell and cross leveraging of resources. We have over the last two years achieved a significant consolidation by way of operating synergies, cost, customer segment and most importantly making customers part of the overall bank franchise. There is a long journey ahead of us on this. And this we believe is a strength that will stand us well, not just in FY ’26, but years beyond and in some manner will ensure we help us in maintaining a strong PPOP. There has been a lot of discussion on growth. I would say for us, growth is important, but it is critical to have a profitable growth with appropriate risk. And we believe plenty of opportunities lie at this convergence for us. In my mind, there are four things that can give us sufficient lift besides growth. These being cost of deposit, cost of operations, cross-sell and cost of credit. I will now ask to take you through other financial parameters in detail.
Jaideep Iyer — Head – Strategy
Thank you, Mr Kumar, and good afternoon, everyone. Briefly touching on other aspects of our financial performance, on advances, we grew net advances by 13% year-on-year to INR90,412 crores and retail advances grew by 19% year-on-year to INR55,199 crores. The retail wholesale mix now stands at 6139. Our secured retail advances grew at 38% year-on-year. And as we have been saying, this remains a core focus area for us. Our total deposits grew 15% year-on-year to INR1,653 crores and CASA ratio now stands at 32.8%. Our granular deposits, which basically deposits below INR3 crores grew faster at 20% year-on-year and 3% Q-o-Q to INR53,719 crore and now stands at 50.3% of our total deposits. This has been an area of focus for us for the last several quarters and we are happy to kind of progress steadily on this front. Our net interest income was 3% year-on-year up, but down 2% sequentially at INR1,585 crores. NII growth was impacted on two counts, lower disbursals in the JSG business as well as increased slippages causing interest reversals. Our cost of deposits was 40 basis-points higher sequentially at 6.57% and similarly, cost of funds was up by 6 basis-points, at 6.63%. We expect this to be largely steady in this range for the next one or two quarters. Our net interest margin was down sequentially to 4.9% this quarter, mainly, as I said, on account of interest reversals and lower disbursals in the JSG business. Our total other income was at INR1,073 crores this quarter, 38% higher year-on-year and 16% sequentially. This other income had the benefit of gain from a one-time gain on-sale of an investment which we did in Q3. However, happy to report that core fee income grew 19% year-on-year and 6% sequentially to INR871 crores. Our total net income was up 14% year-on-year to INR2,658 crores. Without the specific gain on the investment we had, it was up 8% year-on-year. In a sense, despite pressures on margins, we’ve been able to offset some of the impact through better fee income performance. Our OpEx grew 7% year-on-year and 2% sequentially to INR16,662 crores. Our cost-to-income income ratio as a result was 62.5% this quarter as against 64.2% last quarter and 67.1% same quarter last year. Our PPOP this quarter was at INR997 crores, up 30% year-on-year. Without the one-time gain on investment that I mentioned, our PPOP was INR853 crores, which was up 11% year-on-year. Let me now briefly come to asset quality. We touched — we touched on the trend of slippages earlier when Mr Kumar — Mr Kumar’s remarks. In terms of NPA ratios, the gross NPA was at 2.92% and net NPA was at 0.53%. Our net NPA sequentially lower from 0.79% we had in September, primarily because of the accelerated provision that we have taken on the JLG book, JLG NPA book. Consequently, at the bank level, the PCR improved to 82.17% versus around 73% last quarter. I will give a little bit more details on this in a minute. Our net restructured advances stood at 0.32% against 0.38% as we continue to see paydowns by customers. So this has become now fairly irrelevant. We are — we are seeing improvement in trend in recoveries as well from NPA and technically written-off book in the unsecured segments this quarter. And I think with improving slippage trends that we’ve already alluding to, this recovery from NPAs and write-off written-off portfolio should also improve. On provisions, before we detail the provisioning charges, I just wanted to clarify on the benefits we had in this in this quarter from some one-offs. One was the stake sale that I spoke about, which was for INR144 crore gains booked in Q3 by the bank. In addition, we had a tax write-back of about INR150 crores in this quarter. And these two benefits we have taken substantially and more into provisioning for our JLG book. So in addition to the normal provisioning policy in JLG, which is 25% every quarter, which translates into INR259 crores for this quarter. On a prudent basis, we have taken an additional INR414 crores towards NPA in the segment. So totally, we provided almost INR680 crores or so. So this provisioning on the entire GNPA of JNG takes us to 85% coverage in the — in the JNG book. Yeah. And in addition, we continue to carry the full contingent provisioning of INR273 crores, which should help us in dealing with what we expect to be still about rent slippage in Q4 and the idea would be to carry as little baggage as possible into the next financial year-on this book. In credit card, we had a provisioning net of recovery of INR473 crores, in-line with our fairly aggressive provisioning policy. So in effect, in the unsecured segments, what we are saying is that we’ve seen asset quality challenges, but we have kept net NPA to fairly low levels and therefore carrying less baggage to the next quarter and we hope to do that even in the next quarter so that we start FY ’26 on a relatively clean slate accompanied by even fresh slippages becoming more-and-more towards normalization. As I said earlier, we’ve seen declining trend in cards. We’ve also seen — while we will see about trend slippages in JNG book in Q4, the early bucket resolutions as we had published for December ’24 makes us believe that we should start seeing normalization in this portfolio from Q1 or Q2 onwards. Our net profit as a result of the fairly high provisioning that we have taken stands at INR33 crores for the quarter. Briefly on capital, our total capital, including profits was at 15.4% and our CET1 ratio was 13.7% as against 15.9 and 14.2% at the end of September. This is after the change in risk rates for JLG book, which we had taken from 75% to 125% in this quarter. Excluding the JLG risk-weight change impact, our burn on capital would be about 10 basis-points in CET1 and total capital approximately. And I think this trend will also continue given the fact that the higher risk-weighted book is expected to grow slower as we go-forward. And therefore, we expect to be fairly well-capitalized for the foreseeable future. With this, we’ll open the session for question-and-answers.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin with a question-and-answer session. Anyone who wishes to ask questions may press star and one on the phone. If you wish to withdraw yourself from the question queue, you may press. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Muna Khetan from Dolat Capital. Please go-ahead.
Mona Khetan
Hi, sir, good evening. In fact, yeah, good evening.
Operator
So the audio is not clear. I would request you to use your handset, please
Mona Khetan
Is this any better?
Operator
Yes, ma’am. Please proceed.
Mona Khetan
Okay. So from on the collection efficiency. So the 98% number that we see for December, does it include both standard and delinquent book or just the standard portfolio? Yeah.
R Subramaniakumar
It is the current book which is due on that particular month.
Mona Khetan
It is the current book.
R Subramaniakumar
Collection, it will be more.
Mona Khetan
Sorry, this is just the current book.
R Subramaniakumar
Yes, it is just the current book which is falling due in that particular month. Out of INR100, we collected 98.4, which was 97.4 the previous month the trend is continuing the same way.
Mona Khetan
Got it. And I missed the broad slippage number on the MSR portfolio.
R Subramaniakumar
5 36 and the net will be
Jaideep Iyer
521.
R Subramaniakumar
521.
Mona Khetan
So INR536 against last quarter at about INR2.4 billion., INR40 crores. Got it. Okay. Thanks so much. I’ll come back-in the queue.
R Subramaniakumar
Thanks.
Operator
Thank you. The next question is from the line of Rikin Shah from IIFL Securities. Please go-ahead.
Rikin Shah
Hi, thanks for the opportunity. Couple of questions. So while we acknowledge that the collection efficiency has improved sequentially, but it is still only current standard — current bucket collection efficiency, which usually has to be well north of 99%. So it seems like while the trend is improving, there are still going to be significant forward-flows. And you already alluded that October, November was weak, but what gives us enough confidence that even 1Q the slippages will start kind of trending down? So that’s question number-one. The second question is on capital. So while the growth rate is still materially higher than the ROEs. We are still consuming capital. Of course, this quarter there was an impact of higher-risk weights. But how long do we expect that the current capital level will sustain our current growth ambitions? And when could we potentially look at a next round of capital raise? That’s point two. And third one is more data keeping question. If you could spell out segment-wise gross slippage and net slippage for wholesale cards, MFI and other retail, that will be helpful. Thank you.
R Subramaniakumar
Okay. I’ll just take the CE first. And if you look at it, I’ll just give a small background, which you might be well aware. When we were in the month of March, we gave a current bucket resolution of 99.47% that was the peak and the best. So which resulted in the Q1 to have the least slippages because of that particular entire trending. And it started moving down from the month of June, July and which started showing up in the month of — from the Q3, which is the impact which you’re seeing in Q3. So whatever the current end of 98.4% basis the local assessment and the field performance on a daily basis till the 15th, we are of the very firm belief and confident that this will never go below, it will move-up. Our assessment is that from next month onwards or by March, definitely, we will be in a position to reach the current bucket efficiency of 99.1. So whatever that October, November, which we saw it, which was in the old 97, this will have an impact in Q4, but the trending which we are seeing it from December onwards will show us a lesser slippages from the month of March onwards. So there will be a little smaller — lesser — slightly because of this March effect in Q4, but it will be more or less which we also said in my conversation — in my statement earlier, for which how we are prepared. One is the impact. Second is the impact preparation. We said that we still have the contingent provision of INR273 crores, which we are already holding it with that and our steady, which we have seen it all along will be in a position to consume it, leaving no baggage or very less baggage to that of the Q1. This is number-one. And how we are confident of Q1 is December is indication for the March and from January, February, March will be helping us to do in Q1. So we are sure that it will start trending down and reducing the slippages from Q1 onwards. With regard to the capital and segment, I’ll asked to respond to you.
Rikin Shah
So I can answer. Before that, if I can just seek one clarification on this, the tighter MFIN guardrails, which were going to be implemented from 1st Jan are now pushed out to 1st April. So isn’t there a possibility that once the titer guardrails get implemented from 1st April, the collection efficiency can potentially further dip down given specifically for the over-leverage customer profile. So how do we think about that?
R Subramaniakumar
See, let me just clarify two points here. As far as the MP guidelines is concerned, there’s two components. That is one in respect of the number of. Second in respect of the amount peak. Only the number of institutions which — from which they can borrow has been pushed from 1st of April. The other guardrail is already adapted by everybody, including us. We have already done in respect of the institutions also. So partly it has been adapted in this quarter itself. The second, if I look at my portfolio and other things, the initially was sourcing, we had around 5% to 6% of our borrowers were skipping this one plus 2% and whereas the portfolio today because of the overlay from others, it’s somewhere around 25% to 26 percentage. And going by the feedback what we got, that is one trend which is likely slip. Others are all-in a position to increase the current trend. So we feel even if the is going to be pushed down, it is going to improve the quality of the portfolio going-forward. This will not have an impact in respect to the existing portfolio. The existing portfolio only way to collect is only the collection efficiency, which we are seeing an upper trend and it will not get impacted.
Rikin Shah
Got it. Sir, sorry to harp on this, but on our current MFI book, what proportion of the borrowers would be four or more in terms of the lender exposure, both in the number of customers as well as the value terms.
Jaideep Iyer
About 10% to 11%.
Rikin Shah
This is on volume or value terms?
Jaideep Iyer
Both are similar.
Rikin Shah
Okay. Got it.
Jaideep Iyer
On capital, I can I think obviously, there is no question of looking at capital raise for the foreseeable future. I think we are bringing down our burn quite materially despite I completely understand the low ROE scenario. But we don’t expect given the mix change that is happening automatically that the burn is going to be more than 10 bps a quarter. So we are — we will be quite comfortable with up to 13% CET1 or thereabouts. And so we have easily a year and a half right now to go on this. In terms of your data points on slippage, basically X cards and MFI or X cards and JLG, there is hardly any gross or net slippage. On cards, the gross slippage was 567 and the net slippage was INR533 on JLG book, gross slippage was 536 and the net slippage is 521.
Rikin Shah
Got it. And sir, just one more question if I may squeeze in. With the higher additional provision on JLG now, I understand the portfolio is 85% provision coverage. Going ahead, what kind of provisioning policy will we be following for JLG book? Earlier we believe it used to be 25% on 90 DPD. Is there a fundamental change in the provisioning policy?
Jaideep Iyer
So Rake, no, I think we will want to keep provisioning high in Q4, given the fact that we will expect high — about rent slippages in Q4. After that, we would want to revert to our 25% and we will see any change in provisioning policy when things get steadied down in a few — in a couple of quarters.
Rikin Shah
Got it. Thank you very much for answering all my questions.
Operator
Thank you. The next question is from the line of Piran Engineer from CLSA. Please go-ahead. Please go-ahead.
Piran Engineer
Yeah. Hi, sir. Good afternoon. Just firstly, continuing on cards. Last quarter slippages were INR600 crore this time INR570 crores, what’s really the view here? Because last-time it was impacted because of the migration and collection responsibilities and we were of the view that in the next couple of quarters, we would go back to that 5%, 6% credit cost. So any outlook on credit cards would be useful.
R Subramaniakumar
So Kiran, I think we would expect, as we have said earlier, we would expect the slippage trend both gross and net to keep trending down, I think it’s a little premature to kind of really say when do you expect normalization because we still are in a slightly uncertain environment. But if you force me to make a guess, I would say somewhere in the Q1 to Q2 timeframe?
Piran Engineer
Got it, got it. Okay. That’s fair. Secondly, just on Rickin’s question, have you all started adopting the norms that come from 1st April already like proactively or did I miss misunderstand that.
R Subramaniakumar
Yeah, yeah. We have already adapted as a prudent measure of the MPL much earlier. It was in fact, we — our — we have a little extra — I’m over and above what has been said by MPN. One in respect of the family as a unit, we are looking at it in our assessment, which normally was not there by others also. The second is that they are talking about delinquent to 60 plus and we are talking about DPD also as part of our underwriting. This is over and above. You have seen 0.1 plus 2 and the 2 lakhs number has been adapted by us.
Piran Engineer
Okay. And just as per your assessment in the industry, has everyone started adopting this one plus 2 norm or are you one of the few people who are proactively doing it?
R Subramaniakumar
I may not be able to precisely confirm or otherwise, but based on what the market information I got is that plus 2 is getting postponed and which has not been adapted by many of them, whereas that the peak value of INR2 lakhs has been adapted to most of that.
Piran Engineer
Understood. Okay. And just lastly on MFI, sir, if you could just clarify if December has been better than October, November and Jan is also on a good trend, why are we saying that slippages will remain elevated in 4Q as much as 3Q?
R Subramaniakumar
We had October, November, the CE was not in the range of 98.5%, it was in the range of 1% less. So we feel that this will play-out in the month of January and February. In the month of March, which will play-out the basis that SMA zero, the collection efficiency of December where it will be slightly down. That’s why we said that it will be — ballpark figure will be that and will be slightly less also. Just as a matter of prudence, we thought that it will be in the same trend. So we are preparing ourselves to face eventuality so that no baggage carries forward.
Piran Engineer
Okay. But it’s fair to say that — yeah, sorry, please go-ahead.
Jaideep Iyer
And just to clarify, basically, bucket one efficiency is a leading indicator. So by definition, what you see in December will play-out in the 90-day time-frame.
Piran Engineer
Correct. So basically then at least in 4Q, the slippage into SMA-0 and SMA-1 will be lower than 3Q. Is my understanding correct?
Jaideep Iyer
That is correct.
R Subramaniakumar
Correct.
Jaideep Iyer
Which is why Q1 should come down in terms of slippages.
Piran Engineer
Okay. So it’s just seasoning that a Stage 2 loan moves into Stage 3 and that’s what will happen. Got it. Got it. Okay. That’s it from my end. Thank you and wish you all the best.
Jaideep Iyer
Thank you.
Operator
Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go-ahead.
Kunal Shah
Yeah. Thanks for taking the question. Firstly on LCR, so quite a sharp improvement out there. So maybe anything done with respect to the quality node out you indicated in terms of the granular deposit growth. But besides that in terms of the outflow rates and all, how are we seeing it and what has clearly led to this improvement?
Jaideep Iyer
So Kunal, yes, I think the outflow, both gross and net have trended down for us last couple of quarters and I think that’s a conscious trend both from a granularity perspective as well as from an individual balances perspective. So — and I think this is also in preparation to any potential, if at all, change in LCR guidelines. So yes, that’s a continuous effort. And hopefully, as that trend continues, our need for excess HQLA also keeps trending down.
Kunal Shah
Okay. And secondly, in terms of margins, so again, I think on MFI, looking at the overall operating environment, the growth could be lower. Credit card also, it will take some time before we see the entire transitioning towards the newer partners. So then maybe obviously there has been some element of interest reversals, but definitely, should we look at the overall margins being down even from the current level because of the pressure on yields and some maybe cost of funds also staying elevated.
Jaideep Iyer
Yeah. So Kunal, I think for Q4, we will expect margins to kind of trend down a bit given the fact that we will have — continue to have a standard — yeah, I mean proportion of standard advances in the JSG book and cards as a proportion to total standard advances will trend down in Q4 as well before it starts to stabilize in Q1. So yes, Q4 margins, my guess would be it should come down.
R Subramaniakumar
But it will start moving up.
Kunal Shah
Okay. Okay. Got it. Yeah. Thank you.
Jaideep Iyer
Yeah, we should start — the trajectory should change sometime in the — early to middle of next fiscal.
Operator
Thank you, sir. We’ll take the next question from the line of Anand Dhama from Emkay Global. Please go-ahead.
Anand Dama
Yeah, sir, thank you for the opportunity. Sir, you said that credit card slippage also could come down in 4th-quarter, whereas the microfinance slippages might remain elevated for that. So in 4th-quarter, if we continue to make these kind of provisions with no one-off gains being there, can we expect no that we might run into a net loss in 4th-quarter? And from first-quarter onwards, I think we are entering into a far better loan where we are largely done with the heavy-lifting in terms of provisions and microfinancial credit card and then we move on a basis a better biggest thing. Is that the right understanding?
R Subramaniakumar
And Kunal, I think — sorry, Anand, Anand, sorry, I think we are — while nothing can be certain, but it’s highly unlikely that we will want to go into negative territory on the — on the profit because we will depending on the discussions with the Board want to use the contingency provisioning as well. And along with that and the people, we should be comfortable in minimizing any carry-forward — material carryforward on MFI without going into negative territory is the starting estimate that we will have?
Anand Dama
And secondly, sir, talked about cost-control of CASA and credit cost. So I think the other factor certainly will take time. But on cost front, what exactly are you planning to do in FY ’26 to control it of that benefit on?
R Subramaniakumar
Anyway, you would have seen that our cost-income ratio is in 62%, which is what we saw it. It may trend 1% or 1% up or down depending on how it is going to pan-out. There are the cost-control is definitely a focus. There are multiple actions are being taken. Some of the actions, if you see that is suppose I’m going to have a lesser sourcing of the card that itself is going to be the lesser — that may be temporary in one. But there are consolidations, there are process simplifications, there are improvement in the systems which are less productive is being very productive, all those things are being taken, which will play-out as we move forward. It cannot give you an immediate result, but these are the ones which will be able to sustain the level what we are seeing it now. You would have seen that our opex is more or less holding at the same level for last three, 3/4. We will try to hold it, excepting for some investment in the capex which is required for so that depreciation will be definitely adding up to it. But more or less, we’ll be in a position to hold it at the same level.
Anand Dama
Any number do you have mind in terms of cost-income ratio or cost to asset ratio on?
Jaideep Iyer
Anand, I would prefer to give specific guidance here. I think we are in a little bit of uncertain territory for a quarter or so. So please bear with us to give guidance on this more specifically for some more time.
Anand Dama
We are actually talking about next two, three years. So can we get to that less than or closer to 55% kind of a zone?
R Subramaniakumar
I mean instead of throwing that kind of numbers, I would say try to say that the cost-income, which was high is being controlled now. We will continue to take the efforts and I would rather resist from giving any specific number now, which you can hold it, but you will see that effect in couple of quarters. Thereafter, be able to see precisely where we’ll move down.
Anand Dama
Sure, sir. Thank you.
Operator
Thank you. The next question is from the line of Lavish Korwal from Axis Bank. Please go-ahead.
Lavish Kolwal
Yeah. Just one question. If we come to Slide number 26, it shows credit cards have — credit card have fallen down basically Malakh, there are 2.6 lakh credit cards that have been issued during the quarter. However, the card put — card number of cards in-force have decreased. So what is the reason for that?
Jaideep Iyer
So we will always, Lavesh, have some attrition on cards, which is quite normal. So typically unless you originate a certain set of — certain cards, you know, unless you, let’s say, compensate for the attrition, the net book will go down. So even if you look at the previous quarters, you will see that the net accretion is less than the gross additions that we disclosed. So there is always attrition which will happen.
Lavish Kolwal
Okay.
Operator
Thank you. Okay. Thank you. The next question is from the line of Jay Mundhra from ICICI Securities. Please go-ahead.
Jai Mundhra
Yeah, hi. Good afternoon, sir. Thanks for the opportunity and thanks for the clarifications. Sir, I wanted to check on one thing, of our 10 million-plus JLG customers, there would be a certain amount of non-MFI retail loans as well, right? If you — if you can ballpark say do we offer non-JLG — non-MFI loans to these customers or we don’t? Industry data suggests that there is some INR1.5 lakh crore of non-MFI retail loans available to JLG customer. What is our practice and what could be that quantum ballpark?
R Subramaniakumar
Yeah. See, right now, this portfolio, we are only having JLG. We have not worked anything beyond that. We will just wait for an opportunity to come after the normalization takes place. Right now, it is only.
Jai Mundhra
Okay. So we don’t offer any two-wheeler or affordable housing or gold loan, et-cetera, to these customers, right, as of now.
R Subramaniakumar
At this point of time, no.
Jai Mundhra
Sure. Thank you. Secondly, sir, now you mentioned in your opening remarks that the growth will be driven by wholesale and secured products and the unsecured proportion may come down. But still if you were to sort of highlight the business growth overall — at overall basis for the next maybe two, 3/4 till the time we are out of this asset quality headwinds. If you have any commentary there.
R Subramaniakumar
So for the near-term, I can say that we will be holding at the same level of growth what you have seen into this quarter and the medium-term, we will revise it after we come out of this normalization one or two quarters.
Jai Mundhra
Sure. And lastly, sir, a small clarification. I think you mentioned 10% to 11% is the borrower who are four lenders plus. Did I hear this correct? And if you have the number — same number for maybe two or three lenders, I mean, because just to get a delta, if you know if the guard rails are going to get impacted, going to get implemented.
Jaideep Iyer
So four-plus, as I said, is about 11 or so and at and four would be about another 7% to 8%.
Jai Mundhra
Okay. So 3 plus is roughly 85%. Up to 3% is 85%.
Jaideep Iyer
Yeah.
R Subramaniakumar
Yes, yes.
Jai Mundhra
Right. And sir, if I may just ask a small clarification again, apart from three lender cap, all other MCN guardrails, right, the INR2 lakh rupees limit, I think you already mentioned, but this disbursement wherein partner lenders had stopped disbursement, anyone who was again — who was beyond a certain DPD, maybe 60 DPD customer that you have already implemented, right? And at the body — okay,
Unidentified Speaker
Never let two customers who.
R Subramaniakumar
So in fact, ours is little stringent than what you have seen it infin. Any one DPD also we are not lending it, our BRE will not consider anybody — not only Jim, we are looking at the family also, which is a — I mean, you may say that our risk underwriting standards are a little more stringent than what is to the MP and we have already adapted all the models, whatever is postponed also we have done it. Anything else you want to
Rajeev Ahuja
Just to clarify, keep aside the guardrails, we have never actually lend to any customer who is even one DPD in our own book or outside. And as Ms Kumar clarified, we also look into DPD at the family level. So I would be essentially pulling out bureau for the entire family member. And if there is any loan which is delinquent over there, we would not lend. So we have maintained this for quite a number of years now.
Jai Mundhra
But just a small thing, sir. I mean, how frequently does the data gets refreshed at the bureau level for MFI and maybe because I think there was a proposal wherein the bureau were asked to refresh the data or update the data more frequently. This is like real-time basis or how frequently does it gets refreshed?
Jaideep Iyer
And so we have moved from monthly — I mean, as in all lenders have moved from monthly to every fortnight basis RBI guidelines effective for Jan. So now it’s every 15 days.
Jai Mundhra
Okay. So this is MFI plus other retail also. This is only applicable to MFI.
Jaideep Iyer
All retail.
Jai Mundhra
Okay. Great, sir. Thank you and all the very best.
R Subramaniakumar
Thanks.
Operator
Thank you. The next question is from the line of Darshal Zaveri from Crown Capital. Please go-ahead.
Darshil Jhaveri
Hello. Good evening, sir. Thank you so much for taking the question. Hope I’m audible.
Operator
Yes, yes, please.
Darshil Jhaveri
Yeah, yeah. So I just wanted to know, could we like give any kind of guidance how we are looking to-end for FY ’26 in terms of the loan growth or credit cost or NIM for ROA, any of these factors that we want to look-forward for FY ’26.
R Subramaniakumar
At this point of time, I hold back the FY ’26 guidance, which will come back after this quarter is over.
Darshil Jhaveri
And sir, any — how do we see Q4 going? Like I think we said some kind of NIM pressure will be there. So what do we look at, like how do we look at the end,
R Subramaniakumar
So the Q4, Q4, you divide into two-parts, one in respect of the slippages of this unsecured part, other one is in other book, other book other than the unsecured, we don’t see any stress in the book at all and it is behaving properly and it is going to grow the way we have been growing in Q2 — on Q3. In respect of the unsecured, we have already told down our the muscle. You would have seen that we regrown card in personal loan and we have grown by 8% in card and in microfinance we have. That will continue in Q4 as far as because the current environment doesn’t make it to be expansion. And with regard to our slippages, we see that as you said that the car, the slippages we are seeing it trending down and in Q4, it will be further down. And in rest of the MFI, we have already said that it will be lower than the other Q3 or more or less equal to the other Q3, but Q1 onwards is going to be trending down. That is what we see in Q4. You want to add something?
Jaideep Iyer
Yeah. I think the focus for us would be to kind of clean-up as much as possible so that we carry negligible net NPAs in our unsecured portfolio for next year?
Darshil Jhaveri
Okay, okay, fair enough. Got it, sir. And sir, just a question regarding, like I think we said around you know like 20% of the book is like three lenders plus. So with the new homes coming, how would the industry work? Like so we will not be able to lend to these people or how would — so is it like a 20% of book is now like into — it will not be viable for us. So how would that impact our book and growth in that sector, sir.
Rajeev Ahuja
NPC is basically the basically the — I think the entire problem that we are seeing right now is because of over leveraging. And in any case, we would not want to lend to the lend to these customers who already have two loan plus three-plus. So basically, while disbursal might have looked simpler if we did not put this guidance, but we will again face a similar kind of a problem in the future.
R Subramaniakumar
So, and if I understand your question that what is an availability of the opportunity for lending? That is what you are
Darshil Jhaveri
Correct, correct, sir, because how would we grow that book because we are going to grow a lend to a lot of people and it’s an industry-wide phenomenon where a lot of people are over-leveraged. So I just wanted to know about that like in terms of how would be able to disburse? Yes.
R Subramaniakumar
Yes. First thing is that we had understand the financial inclusion is the first step for the formal induction of anybody into that financial sector itself. Moving away from informal lending sources to the formal lending. So there will be enough opportunity the NTC is available. The new to credit is new to the banking is always available, which is a fairly, fairly big number and which is also somewhere big number for us. And where the problem will come is that while doing a renewal, if suppose the person has been over-leveraged, you may be may not be in a position to link to those over-leveraged customers. So the first impact in my assessment, I may be wrong, I’m just making an assessment based on what you understood this industry. In our view, the renewal part of it may come down because of this over leverage. The NTC part of it, which is around 60% what we have seen, it is likely to be there and the ETB will also be there, which is going to move to that to the — because we have around 85% of the customers already there in less than 3%. So that pool is also available for renewable. So I don’t think that opportunity is taken away. But in my view is that we will be moving towards a situation where the common underwriting will be standard across. So somebody is giving more-and-more loan and then putting the entire ecosystem into the trouble may not happen because it will take couple of quarters for them to streamline and stabilize into this. Once it does, this industry will become a streamlined one.
Darshil Jhaveri
Oh, okay, okay. Great. Great. That’s great to know, sir. And sir, last question from my end, what is the price we expect for the ’25?
R Subramaniakumar
Can you repel a little bit?
Operator
Yeah.
Darshil Jhaveri
Credit — credit cost for FY ’25.
Jaideep Iyer
So credit cost for FY ’25.
Rajeev Ahuja
Overall look.
Jaideep Iyer
We’ve already published nine months, I think given the fact that we are saying that MFI slippages will be give or take similar to Q3, maybe marginally less card marginally less. So, but we will want to kind of, as I said, clean-up on whatever we can and take extra provisioning. So I think the bigger focus for us than looking at credit cost for Q4 would be to see that we carry next to negligible our net NPA position on our unsecured businesses. Cards, we already have a fairly aggressive provisioning policy where we take 100% to percent provisioning in 120 days. Microfinance, as you know, we have stepped-up in this quarter. I think we’ll have to do something similar so that we start FY ’26 on a relatively clean slate on these businesses and hopefully, we also have lower slippages given improved resolutions in both these businesses. So that would be the focus rather than looking at credit costs as costly as such.
Darshil Jhaveri
Okay. Okay.
R Subramaniakumar
So please summarize just simply to summarize for your clarity, we have four verticals as far as the asset is concerned, we have our wholesale banking and we have retail secured. Most of them are not at all consuming anything as far as-is concerned, even if it is done, it is consumed through the recovery also the world one. So that set-aside around 40% plus, 30%, 70% of my book. The second we are coming to that remaining 30% is the credit card microfinance. As JD very clearly explained, whatever the slippages we saw in the world the consumed through that one-off what we got. So that means this negligible is getting carried forward. As far as the credit card is concerned, it generally doesn’t get carried forward because it is being consumed through our PPOP itself. So our — our concern and focus will be that how to reduce the slippage in card, which the trending makes us to believe that it is going to be trend down. And coming back to the microfinance, as we said that next quarter is likely to have some little more impact than what we saw it in Q2 and Q1. That also we are preparing ourselves because we have something under the contingency provision and people both of them will be able to support and substantiate so that we carry a very leased baggage into that Q1. Q1 onwards, it is going to be — I mean, I can simply put it in a word business-as-usual.
Darshil Jhaveri
Okay. Okay. Fair enough, sir. That’s it from my side, sir. All the best. Thank you.
Operator
Thank you. We’ll take the next question from the line of Suraj Tas from Sundaram Mutual Fund. Please go-ahead
Suraj Das
Yeah, hi, sir. Thanks for the opportunity. I have three questions. The first one is a clarification. When you say that in the MFI, the provisioning policy is 25% every quarter, is this from one DPD or is this from 91 DPD?
Jaideep Iyer
It’s for MPS.
Suraj Das
Understood. Sure. The second question is, sir, on the collection efficiency, the improvement that you have seen in December, if you can give some geographic color in terms of where — I mean, is this improvement across broad-based all the states or how has been the situation across states? And also if you can just talk about bit more about Bihar, UP and probably Rajasthan, which would be your top couple of states.
R Subramaniakumar
Just your first comfort, I’ll say 10 states where we have 93 percentage of the coverage has shown an improvement in the collection efficiency in December over November. I’ll just over to him for…
Rajeev Ahuja
Hi. So to give you comfort of things, the large states that we have, Bihar, specifically is one of the states which is inched very close to 99%. Other than we have, there are five states which are — which have touched 99% or even crossed. The total number of states which are in the range of 99 now is about 55% of the total portfolio. And hence, that’s where the confidence comes from. And as Mr Kumar mentioned, there were only two states which were slightly lower than the November 1.
R Subramaniakumar
States are contributing only 7% of our entire book, 93% is showing a positive uptrend of the collection. And in fact, of course, 99% as you said
Suraj Das
Understood, sir. And the last one is on this SMA book, INR550 crores, what is the outstanding provision against this book that you have as of today?
R Subramaniakumar
No, unfortunately, we don’t make provisioning on the SMA book. So we have focused on taking significantly higher provisioning on the NPA book. Yeah. So we — so we are on in — we are on gap. So we effectively don’t have provisioning on SME book. Yeah.
Suraj Das
Okay, sir. Understood. Thank you so much, sir.
Operator
Thank you. The next question is from the line of Rohan Mandora from Equirus Securities. Please go-ahead.
Rohan Mandora
Good afternoon, sir. Thanks for the opportunity. Sir, just want to understand in the MFY, the 73% — the 43% disbursals are getting covered under CGFMU. So what is the thought process on which you choose asset cover? Why not 100% for incremental disbursements?
R Subramaniakumar
So it is CGFM, if I remember broadly, the eligibility criteria is depending on the purpose for which it has been disbursed as well as there are certain things which has not been covered. For example, if I remember very right, because I don’t have a complete answer to it, I’ll ask to answer them off, right. The — all the eligible accounts under the CGFMU are being covered. That’s one broad set and I can make it. Why that is not reaching the other one, I will ask Kingsh to reach-out to you and explain
Jaideep Iyer
Yeah.
Rohan Mandora
Sure.
Jaideep Iyer
I’m not carrying that right away.
Rohan Mandora
Sure, sure. Okay. Second was on the non-MFI non-cards book. Is it possible to give a sense on what kind of would that be contributing in 3Q? Just to get a sense that incrementally, how is that book contributing on profitability?
Jaideep Iyer
On retail or entire advances of —
Rohan Mandora
Either way, it’s fine. Just want to get a color of excluding these two segments, how is the growth on profitability shaping up?
Jaideep Iyer
So wholesale book is doing somewhere in the — in the 2.5% to 3% PBT range. And the secured retail is still not yet breaking even. We expect that to happen over the next few quarters.
R Subramaniakumar
But within secured retail, there are certain components who have become profitable. That is we — the tractor is profitable, it is just giving us a contribution. And in respective agriculture and VBG, they are positive. And only thing is the housing loan, which we started recently is just waiting for that to be breakeven and mortgage loan is also both of them are only waiting. All other things have come, more or less profitable neutral.
Jaideep Iyer
Sorry, wholesale is about 3.5%.
Rohan Mandora
3.5%. Okay. And sir, on the corporate — large corporate piece and the strategy we had indicated we’ll not grow that meaningfully because of the lower yields. But this quarter we have shown a 4% sequential growth. So just want to understand the thought process here.
R Subramaniakumar
So as far as the large corporate is concerned, we have already stated in couple of quarters before, it is not — it is not going to book building method we will not do. We will be doing that kind of business with those corporates who will be giving us allied business like the forex, trade finance or these kind of businesses. Those kind of business will continue to do because you could have seen that. You can easily see that the contribution is the other income, which is consistently growing at the rate of around 25% to 28%, we will be looking at those kind of corporates with whom we get a moderate return plus all additional businesses, like we get a liability business, we get our forex business, we get our trade finance business, we also get the salary accounts. There are multiple cross-sell opportunities are seeing those corporates where we are going it. The second, there are also some good relationships which we have been enjoying it since past where we have a good forex business and other business we are doing it. Those corporates will continue to give an enhancement as and when there is a need for it to come up. That is the thought process as far as the corporate book is concerned. And within the wholesale commercial, we are seeing that is something which is growing.
Rohan Mandora
Right. And sir, next one on this deposit piece. So if you look at a savings deposit, I think there’s a 12% growth in last six months. So just want to understand if there is any lumpiness or it’s all granular deposits and we have not grown term deposit this quarter. So despite we having a relatively higher rates, so what was the reason here? And associated question here was that cost of funds despite SAR mix sizing has gone up. So what was the average cost of SAR during 3Q and 2Q?
R Subramaniakumar
The cost of fun as far as the strategy of CASA as far as the TD is concerned, first, it is directly linked to my ability to deploy. And the second, it is going to be the decision of the granularity. You would have seen that my savings fund has moved up considerably, but around 12%, 13% or is more than that and it reached INR120,000 crores. Majority of them, I don’t think that we have anything which is a higher-rate because if you look at our rates which we give, we always give it to the better rate for the less than INR3 crores, which are mostly driven by individuals only. In TD, if you see that it is flat, it is mainly because that we are not chasing any bulk and wherever the reduction you would have seen, there is a bulk because granular CASA and granular TD put together, which we Call-IT less than INR3 crores, its ever has gone by 20%. So the granularity concept is just holding us well. And wherever you see the less, it is mainly because of that there is no need for us to raise the deposit. You would have seen the CDs also coming down.
Rohan Mandora
Sure. And sir, lastly, just want to reconfirm on the transaction. The average cost of — average cost of saw.
Jaideep Iyer
Yeah, we are at about 6.4%.
Rohan Mandora
6.4%. Okay. And just lastly on this the slippages in the cards portfolio, the transaction linked part was nothing in 3Q, right? It was all business-as-usual. All the business — the transition linked slippages because of that Bajaj thing and that is not there in the 3Q slippages. Most of the credit card slippies in 3Q were business-as-usual due to the economic environment — macroeconomic environment.
R Subramaniakumar
Right.
Rohan Mandora
Sure. Okay. Great. Sure. Thanks, sir.
Operator
Thank you. Thank you. We’ll take the next question from the line of Adity Naval from RSP and Ventures. Please go-ahead.
Aditi Nawal
Yeah, hi, thanks for taking my question. So I had a few questions with respect to the CC book. So one is, in the last quarter you provided a split of what is the credit cost for the credit card book. So I just wanted to know what is the credit cost for this quarter and also the split between the existing BSL cards and the non-BSL portfolio in terms of credit cost?
Jaideep Iyer
Yeah. So Adity, we are — we — we gave that information specially specifically in the context of transition. As we said that, that is largely settling down except for tail. So there is no need for us to now look at it separately. So we are not providing that data effectively and I’m not carrying that right now. Sorry, what was the second question? The book split should be approximately 60-40 or 61 39 between BFL coordinated book because BSL co-orginated versus other co-brand plus the core book, BSL book.
R Subramaniakumar
So BFL book would be about 55, other co-brands would be about for rest of it, it would be, you know a further 40% 60 between rest of it.
Aditi Nawal
And what is the direct sourcing number?
R Subramaniakumar
Yeah. So today whatever we source, about 55% is directly sourced by us.
Aditi Nawal
Okay, good. And just the credit cost for the credit card book overall?
Jaideep Iyer
Great. So we provided about INR470 crores on the cards book, cards plus the PL book.
Aditi Nawal
Okay. So okay, in the credit cost for the credit card book, you also include the PL or two credit card customers, just in that calculation
Jaideep Iyer
Because currently our PL book is pretty much only given to our existing card customers.
Aditi Nawal
Got it. That will be it from my end. Thank you so much.
Operator
Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go-ahead.
Kunal Shah
Yeah. Thanks for taking the question again. Just was broadly trying to understand in terms of the MFI provisioning. So now INR922 crores of slippages and almost INR540 odd crores of SMA bucket. So if we look at it closer to INR1,470 odd crores of this stress pool on which we are already carrying almost like INR790 crores of provisioning, okay. So I would say still even if I include SMA, then it still seems to be like 53-odd percent coverage from 85 on the GNPA. So just to infer maybe like the incremental provisioning which was done of INR414 odd crores, maybe that should broadly be absent in the — maybe if you look at it not too much of flows and the normal slippages, you are also indicating that at least Q4 slippages will be similar to that of Q3 at least not going up. But this entire 414 accelerated that might not be required and still we have 1% contingency buffer as well. So fair to assume that on the provisioning, it could be like at least INR400 odd crores kind of a delta in the next quarter or how should we look at it? Yeah?
Jaideep Iyer
Yeah. So Kunal, you’re right in assuming that the step-up that we did in Q3 will not necessarily be repeated in Q4 because we have to contend with Q4 slippages and I think about INR130-odd crores of GNPA that we are carrying in this book. And we have a contingency buffer of approximately INR280 crores. So it is — the outsized provisioning that we took on this book need not be repeated in Q4, but it will be higher-than-normal levels that we have seen in the past.
Rajeev Ahuja
Because to clarify, if we — given how our intent is not to carry any baggage into Q1, we — we would — so we would want to provide the 135 is a balance on the net NPA as we ended Q3 and as much as we can on whateverages we see in Q4. And if we have to dip into contingency, we will do that. So you will have some delta of contingency being used in the P&L if it comes to that. But I think fair to assume that if I’m saying my slippages are similar to where I’m seeing in Q3, they would ideally want to provide as much as they can in Q4. So you could see by slippages plus my net NPA, we to utilized. So if you assume my slippages are 450 to INR500 plus 135, that is the amount the provisioning as we do. What comes out of contingency will see as we get close to Q4?
Kunal Shah
Okay. And contingency, when we look at it, if I have to look at MFI, that will only be like INR65-odd crores, balance is still towards credit card and PL because generally we tend to maintain 1% contingency on the unsecured. So you are saying that it’s like INR290 odd crores of contingency, but that can be utilized for MFI could only be INR65-odd crores.
Rajeev Ahuja
The audit and go on this. But just to clarify, in our cards business, we provide fully at 120 days. So there is no real baggage we carry, which requires contingency per se, because whatever we see 90 we fully provide by 120. You microfinance, they provide 25% each quarter. So yeah, you’re right to say when we started it, we have the intent of doing both on cards and MFI. But given how our provisioning policy is in card, the pay was absorbed fairly quickly in cards on our own entirely BAU basis. So microfinance will have a discussion and we will see. But given that we’ve taken it up to 85% with the intent of absorbing as much as we can, that will continue to be intent in Q4 as well.
Kunal Shah
Yeah. So just the question was even contingency on credit card and PL can be utilized towards GLG.
Rajeev Ahuja
We will have to — yeah.
Kunal Shah
Okay. Okay. Okay. Yeah. So then we might not continue with 1% on credit card plus PL.
Rajeev Ahuja
Yeah. Great.
Kunal Shah
Okay, got it. Got it. Thank you. Yeah.
Operator
Thank you. The next question is from the line of Shailesh Kanani from Centrum Broking. Please go-ahead.
Shailesh Kanani
Thanks for the opportunity, sir. Sir, my other questions are answered. Just one question. On the MFI side, you said certain states are still underperforming in terms of collection efficiency compared to November and October. So can you highlight a couple of states which are still seeing some issues in terms of collection efficiency?
Rajeev Ahuja
Betterment is — 10 states are better now. So I mean just the southern states, Ralesh, just see two certain states are slightly lower than the previous month.
Shailesh Kanani
That’s right. So Karnataka would be one of them because Karnataka a 3rd-quarter was a little bit on the lower side in terms of collection. Karnataka would be one of the states.
Rajeev Ahuja
Yeah, one is Karnataka and Tamil Nadu. While AP Telangana of course is very early days for us. So we are 100% in the last four, five months.
Shailesh Kanani
Okay. And from North side, UP and BR both has recovered. That is that is right.
Rajeev Ahuja
Yeah, yeah.
Shailesh Kanani
Okay, okay. That’s all from my side. Yeah. Thanks.
Operator
Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go-ahead.
Shubhranshu Mishra
Hi, thanks for the opportunity. Just one question. When we look at the credit card piece, how many of the credit card customers have two-plus credit card, how many of them have three-plus? How many of them have four-plus and how many of them have five-plus? And what is the unique number of credit card.
R Subramaniakumar
The question, Vikram was the unique number of end card customers and how many of them will have two-plus three-plus, four-plus approximately.
Jaideep Iyer
You’re talking about our card you’re talking about yard
Shubhranshu Mishra
Overall card. Yes, RBL card, RBL card, not at the industry level.
Bikram Yadav
So number of customers who are having more than one card from us would be about 6%, 7% only. Like it’s not too many customers have two card products from us. But if you’re asking that if how many of them have card from other — other banks, so about 70% of our customers would have cards from other banks as well.
Shubhranshu Mishra
So like how many cards? Two, three, four, five, how many?
Bikram Yadav
I think this exact breakup of how many exactly — I’m giving you a ballpark number, so about, say, 50% of customers would have three or more cards and so whatever is less of 20% would have probably two cards. And the unique number of credit park number not to be at. Actually, yeah.
Shubhranshu Mishra
And what is the unique number of credit card customers we have?
Bikram Yadav
So 4.8 million I think is our unique credit card customers.
Shubhranshu Mishra
And okay, great. Thanks. I’ll come back.
Operator
Thank you. Yeah. Thank you. The next question is from the line of Pranuj from JPMorgan. Please go-ahead.
Pranuj Shah
Hi, thank you, sir. Just one question. Could you just provide the absolute interest reversal number for the quarter?
Jaideep Iyer
No, INR134 crores.
Pranuj Shah
INR134. Okay. Got it. Thank you.
Operator
Thank you. The next question is from the line of Prakhar Agarwal from Elara Capital. Please go-ahead.
Prakhar Agarwal
Hi, sir. Thank you. Just one question from my side. In terms of five book, when you say that you’ll probably start FY ’26 on a relatively cleaner base. Is there a thought process that you’ll probably carry-on a steady-state basis some contingencies on MFI say something like Par 30 that you’ll probably carry or maybe some sort of contingency that you carry-on MFI on a steady-state basis or probably you go into FY ’26, wherein you probably have utilized a certain set of contingent provision as earlier participants have asked and probably then again we are thinking about how FY ’26 in terms of outlook plays out.
Jaideep Iyer
So Prakhar, what we intend to do — what we mean by saying low balance is that normally we will provide 25% on the slippage in that quarter. And that is not the intent for Q4. The intent for Q4 is to provide like we did in Q3, a significantly higher provisioning so that the net NPA that we carry-forward for next quarter or next financial year is as low as possible. And in my judgment should not be more than 10% to 15%. So that’s the intent for which we may end-up utilizing the contingency that we have created on both cards and MFI. Incrementally from next year, should we build-up contingency, that’s something that we will look at over a period of time separate.
R Subramaniakumar
The policy decision will be taken after that Q4 is decided. I mean as we speak today, we wanted to carry as low a baggage or almost nil baggage for the next financial year. That’s we would have seen it now. So-far, whatever that baggage we carried to the previous quarters also taken into consideration and plus the first slippage also coverage is around somewhere 81% that the intent is that we don’t want to move on with that old baggage, so that the performance indicates your returns.
Jaideep Iyer
And sorry, I have got the answer to the question on the CG SMU that was asked if the caller is still on the call. Basically, CGSMU covers income generation activities where agriculture is not covered. So whatever portfolio we have where agriculture is end-used, there we cannot take. So what Mr Kumar said was that wherever we should and can take is where we have taken.
Operator
Thank you. Ladies and gentlemen, we will take the last question for today, which is from the line of Aditya Bagadia from Boyant Capital. Please go-ahead.
Aditya Bagdia
Yeah, hi. Thanks for the opportunity. If you can give any color on the recovery efforts and increased collection staff being deployed for the MFI pool. Also, if you can share any highlights on the sourcing in RBL versus other BCs, any sense on which portfolio is seeing highest stress in proportion
Rajeev Ahuja
So as far as collection efficiencies are concerned, what we’ve done is over the last two quarters, we’ve reduced the ACR as in the number of accounts per loan officer for collection. We’ve almost now brought it down to about a range of INR400 to 420, which — which was somewhere around 550 plus as far as ATR is concerned. So that obviously is helping in the SMA buckets and the zero bucket. And for the recovery buckets, so basically 90 plus and the written-off pool, we have put in a separate — separate set of people for recovery. This has been in effect for the last two months now. And we’ve already started to see some green shoots and better recovery numbers in the month of December itself. So roughly about 1,100 to 1,200 people have been deployed only for 90 plus pools. And I think in this coming quarter also, we will see an uptick in this number. As far as sourcing between RFL and the rest of the BCC is concerned, basically the rule engine is the same. We are flattish over the last two months. In any case, the RFL book is 90% of the portfolio. So that’s not much of a difference between the quality of sourcing, et-cetera, because ruling remains the same for all these
Aditya Bagdia
Helpful. That’s it from my side. Thank you. Thank you.
Operator
Thank you. With that, we now conclude the Q&A session. If you have any further questions, please contact RBL Bank Limited via email at ir@blbank.com. I repeat, ir@blbank.com. Thank you, you members of the management. On behalf of RBL Bank Limited, we thank you for joining us and you may now disconnect your lines. Thank you.
Jaideep Iyer
Thank you very much.
Operator
Thank you, sir.