SBI Cards and Payment Services Ltd (SBICARD) Q4 FY22 Earnings Concall Transcript

SBI Cards and Payment Services Ltd  (NSE:SBICARD) Q4 FY22 Earnings Concall dated Apr. 29, 2022

Corporate Participants:

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Nalin Negi — Chief Financial Officer

Girish Budhiraja — Chief Sales and Marketing Officer

Aparna Kuppuswamy — Chief Risk Officer

Analysts:

Anuj Singla — Bank of America — Analyst

Dhaval Gada — DSP Investment Managers — Analyst

Bhavik Dave — Nippon India Mutual Fund — Analyst

Nitin Agarwal — Motilal Oswal Securities — Analyst

Param Subramanian — Macquarie Capital — Analyst

Nilang Mehta — HSBC — Analyst

Mahesh MB — Kotak Securities — Analyst

Karthik Chellappa — Buena Vista Fund Management — Analyst

Ravi Singh — Motilal Oswal Asset Management — Analyst

Prakhar Agarwal — Edelweiss — Analyst

Piran Engineer — CLSA — Analyst

Shubhranshu Mishra — Systematix — Analyst

Rahul Shah — Bay Capital — Analyst

Rohan Mandora — Equirus — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to SBI Cards and Payment Services Limited Q4 FY ’22 Earnings Conference Call. [Operator Instructions]

I now hand the conference over to Mr. Rama Mohan Rao Amara, Managing Director and Chief Executive Officer of SBI Cards. Thank you, and over to you, sir.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Thank you, Stanford. Good evening, everyone, I extend a warm welcome to all of you. Thank you for attending the earnings call for Q4 FY ’22 and financial year 2022 today. We are grateful for your presence and continued support. I hope you and your loved ones are safe and healthy.

As you are aware India’s GDP grew at 8.9% in FY ’22 which points toward the sharp economic reforms. It is also important to note that RBI’s consumer confidence survey for March ’22 shows continued recovery with contact intensive activities, including travel regaining traction. Domestic consumption also improved over the previous year.

Owing to many factors, digital payments have been a substantial growth and along with growing digital payments, credit card adoption and usage has also increased. This is evident from healthy growth witnessed by the industry in credit cards volume and spends over the past one year with some new milestones we achieved.

In February ’22, credit card base for the industry reached 71.7 million. The month marked the highest growth in past 21 months on year-on-year basis at 16.3% when it comes to new card addition. Card spend also saw healthy growth, crossing the pre-COVID-19 levels during FY ’22. In October ’21 itself, spends crossed INR1 trillion mark, which was the first in terms of monthly spends. As per RBI, in February ’22, card spends stood at over INR86,000 crores.

Despite the strong growth shown by the credit card industry, the penetration in the country still has immense growth potentials, knowing fully well [Indecipherable] very low-penetrated as of now. In fact, the year was marked by several progressive steps introduced by the regulators to further increase the penetration of digital payments and enhance safety for users. For example, extending digital payments to feature phone, using card on file tokenization to enhance security and convenience.

Now, let me take you to the business overview in FY ’22. I’m happy to share with everyone that even amidst uncertain environment, SBI Card was able to emerge with the robust business performance and stronger financial health in FY ’22. Please allow me to take you through just three important aspects of our business to corroborate this. In terms of consistent performance, I will read out a few, which will corroborate consistency in the performance.

Our new accounts registered 33% year-on-year growth in FY ’22 as we added over 3.5 million new accounts. In Q4 FY ’22, we added one million new accounts with over 27% growth over the corresponding period last year. SBI Cards cost imports has grown to over INR13.7 million after having crossed INR12 million mark and INR13 million mark during FY ’22. The market share in terms of cost imports stood at 18.9% as per the February data. Overall, cost spends reached INR1,86,353 crores [Phonetic], having seen increase of 52% year-on-year. In Q4 FY ’22, cost spends grew by over 50% versus Q4 FY ’21 standing at INR54,134 crores.

Retail spends at INR1,46,457 crores have seen a growth of 43% year-on-year in the financial year FY ’22. Last quarter retail spends reached INR41,872 crores, with a growth of over 40% versus Q4 in FY ’21. Corporate spends have also grown by 99% year-over-year, standing at INR39,895 crores in FY ’22. Last quarter, corporate spends were at INR12,263 crores, which is 100% growth over the corresponding period previous financial year. Online spends have also shown — grown significantly in FY ’22, and its proportion in the overall spends is well over 54%.

Some of the following things will demonstrate that the growth attained by SBI Card is sustainable. Our profitability has consistently grown in each quarter throughout the year, financial year. In FY ’22, our receivables have grown by 25%, GNPAs, gross NPAs remained low at 2.22% as of the end of March ’22. With sustainable growth as the goal, we have been calibrating our credit filters for new customer acquisition to address the uncertainties of the time.

In terms of leveraging the changing consumer trends to strengthen our portfolio, we have undertaken several initiatives. So our customer-centric approach has always been our guiding light. In line with this approach, during the year, we introduced products like SBI Card Pulse and Fabindia SBI Card that have been designed keeping in mind consumers’ changing lifestyle spend requirements and interests. We also partnered with Nature’s Basket to rollout first of its kind credit card for garment [Phonetic] levels, a segment fast growing in India. Further, I’m pleased to inform you that we have also strengthened our presence on a RuPay platform with the rollout of our popular cards BPCL SBI Card and Yatra SBI Card in FY ’22.

Lastly, as a responsible company, we ensure to be complaint with the new regulatory changes here, a couple of major changes are like, we have successfully switched to the new mechanism for recurring payments as per the deadline mandated by RBI. We are also ready with Card-on-File tokenization implementation and we’ll roll out the same as per RBI deadline of 30th June ’22.

Now, a few core financial performance highlights. The company has achieved net profit of INR1,616 crores in FY ’22, a growth of 64% over previous year. For Q4, the PAT stood at INR581 crores, which is 231% higher than Q4 of previous financial year. Similarly, receivables stood at INR31,281 crores with a growth of 25%. Revolver balance as of March ’22 is at 25% of overall NEA, partly it is also an account of elevated spends what we have seen in the month of March to the extent of around INR3,000 crores over February ’22, which haven’t got the opportunity to get converted into revolver.

Our total revenue stood at INR11,302 crores and has grown at 16% in FY ’22 over the previous year. In Q4, our total revenue stood at INR3,016 crores with 22% year-on-year growth. On asset quality, the gross NPA has come down to 2.22% as compared to 2.4% in terms of sequentially, as compared to the previous quarter and 4.99% as of March 2021. Net NPA for the period is at 0.78% as compared to 0.83% in Q3, and 1.15% at Q4 FY ’21. Overall, RBI RE book stands at less than 1% of the total receivables as against 2% in the previous quarter.

Return on average asset for the quarter is at 7%, which is higher by 192 basis points as compared to 5% for Q3 in FY ’22. ROAE is over 30%, which is higher by 914 basis points as compared to over 21% for Q3 in FY ’22. Our liquidity position continues to be strong, capital adequacy is at 23.8% for the period ended March ’22.

On the way forward, the Indian economy seems to be in a gradual recovery path as of now. The road has not been without hurdles and the situation remains volatile with several external and geopolitical factors coming into play now. We continue to closely track the prevailing environment and fine-tune our strategies accordingly. One of the key regulatory changes that will be — that we’ll see, we will see starting from 1st July 2022 is the implementation of Master Detection of RBI on credit cards. It is a welcome move in the direction of ensuring customer protection and transparency, and as a prudent and progressive organization, we are well covered with most of the aspects.

Let me reiterate that at SBI Cards, we have built a robust, reliable, and resilient business that has stood the test of time over the past two decades. Going forward, too, we are committed to keep creating value for our shareholders, employees, and customers as we pursue sustainable growth.

So now, we are open for questions. Stanford?

Questions and Answers:

Operator

[Operator Instructions] The first question is from Anuj Singla from Bank of America. Please go ahead.

Anuj Singla — Bank of America — Analyst

Thank you for the opportunity, sir. Sir the first question relates to the asset mix. We have seen revolver declining to 25%. Every quarter we believe that the revolver has bottomed out and we see a decline in the next quarter. So how should we see this number? Is this more structural in nature? And secondly, is this a SBI Card specific phenomena or do you have any feedback other portfolio or maybe the bank side, they are seeing the same things happening in their portfolio as well?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Yes. I think, you are right. The revolver, which was at 27% as of December, came down to 25%. But when we look at the internal analysis when we did, the revolver rate has been marginally increasing from October ’21 to February ’22. That is the amount of spends that get converted into revolver. Of course we have a payments in the revolver, etc. Overall that rate either stagnant in some of the month or otherwise slightly increasing couple of months. But when it comes to March ’22 we did run some special campaign, which has resulted in around INR3,500 crores of incremental spends as compared to February and these spends will take some time, some part of it may converted get converted into revolver. But it’s an industry phenomenon.

We know like a lot of customers who have revolved in the past. I’m talking about the vintage customer, bulk of it got restructured. And then that portfolio, most of it is recovered and our portfolio is hardly at 1%. Only a few of them have actually evinced interest to take the card and again start using the card. Bulk of them have been very circumspect in terms of again activating the card and last two years of course the first year I mean 2021 if I talk about, it was more of a containment. ’21, ’22 obviously we have recalibrated the credit filters. We have been slowly allowing a kind of segment like a self-employed and cash free kind of customers in a calibrated manner. As and when we are confident about the credit cost declining, we were doing it. And this we are not again doing it blindly.

We are also considering some alternate data and with that benefit only we are doing. In fact in terms of the sourcing, when we look at I think the self-employed sourcing has increased at least by two percentage points quarter-on-quarter, which shows our increased appetite for the segment. But it will take some time. It will definitely take. It’s taking longer time than what we have expected, but it’s an industry phenomena. Everyone is looking at it and making it helpful to improve the revolver.

Anuj Singla — Bank of America — Analyst

I get it, sir. Sir, the second question relates to opex, there was a sequential decline in opex. Is it more seasonal in nature or we have taken some steps consciously to cut that. And if I may the third question is on Master Detection of credit cards. Is there any impact on the, our relationship with the co-brand partners, given the new maybe stricter data sharing regulations around that?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

I will answer your last question that is Master Direction. As I reiterated, this is more in terms of improving the enhancing the consumer protection, etc. And our internal preliminary analysis indicates that we are largely complaint. Obviously some changes will be required in the system to exactly comply with it and anyway we’ll be complying it by the deadline. In terms of co-branding partnerships, our partnerships are exactly in compliance with the guidelines. So we don’t anticipate any impact or anything. Because there is no sharing of data in a robust way with co-branding partner.

Second one, in terms of opex, yes, you are correct. Typically, Q3 opex is higher because of spend based cost when we launched a lot of marketing campaigns during the Q3, the spend based cost will be higher marketing cost, cashback kind of component will be higher. That has reduced in Q4. But, Nalin, would you like to add any other color?

Nalin Negi — Chief Financial Officer

Yes. So, Anuj, as Rao said one is obviously the spend based cost on a quarter-on-quarter basis has come down and that is typically the seasonality factor and associated with the spend based cost because as I said during the festival time, this cost tends to be on the high side. But we’ve also been taking steps on the other side. We are looking at our acquisition costs and other costs. And sequentially all other cost base are coming down. And there is greater focus on the acquisition cost side as well. And going forward as well, we’ll be focusing a lot more on the digital initiative to improve our cost of acquisition. So, yes, it’s both the things. One is the seasonal factor and companies are also taking steps to ensure that the costs are coming.

Anuj Singla — Bank of America — Analyst

Okay, thank you very much, sir. All the best.

Operator

Thank you. The next question is from the line of Bhavik Dave from Nippon India Mutual Fund. Please go ahead.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Yeah, hi. Good evening, sir. Sir, thank you for the opportunity. Sir, a couple of questions. One is similar to the previous participant on the cost of acquisition, right. And when we see newer players cost of acquisition wherein they go digital is almost half or 60%, 70% of our cost. How do we — is there a line of sight that we can improve our cost of acquisition materially over a period of next two or three quarters or a year. Wherein we become equally competitive in terms of cost of acquisition. That is question number one.

Question number two is, sir, on the active 30-day active card rates where like we were at 52, now it’s 50. What is changing here? How do we make it like back to that 52. Somewhere around 53, 54 that we were before COVID? How do we reach there? What are the steps that we are taking to keep the customer more active? That is question number two.

Last question is, sir, on the Tier 3 customer segment, where we’ve added like reasonably a higher number of cards in that geography. If you could explain how the economics work there like how does the spend behaviour will pan out, how much time does it take to maybe breakeven or when does the inflection point come in those customers on the spend front? These are the three questions. Thank you, sir.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

I think with regard to cost of acquisition, we have been taking a number of initiatives, particularly we have shared during the last analyst meet also around having a end-to-end digital journey for existing customers. We’re showing one upgrade or otherwise somebody is asking for additional card. Their journey is completely end-to-end. And that’s only just a fraction of normal acquisition costs. And we also showed like we are also working on the creating the digital journey for new to FDIC customers and the pilot has been completed. So we are actually rolling out on a full-blown way in the production, but it will be calibrated, only a few prototypes will be available initially and then we will be ramped up because we need to fine-tune the consideration etc., but this entire thing is expected to stabilize by the end of the current quarter that in the June quarter.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Sure. And that will get the acquisition cost like down reasonably like good…

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Yes, yes. I think we have seen — in fact as compared to a completely manual process as and when we digitized certain journey is actually part of the journey, if we were actually able to get the benefit. So the moment is a completely end-to-end digital and that too originated by the customer, definitely, the cost of acquisition will be much lower. With regards of Tier 3 customers, I think broadly the segment we acquired through the bank channel and mostly through the Shikhar kind of program which you are aware like it’s a pre-approved and pre-qualified kind of program where the cost of acquisition the bank is generally lower than the open market. But I think nowadays when we look at the customer behavior etc., I think Tier 3, Tier 4 customers are also equally savvy on par with Tier 1, Tier 2. [Technical Issues] online. The share of basement is actually more than 50%.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Sure.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

That way I think they are more different. Slightly, yes. So if you’re giving a card to a NTCP kind of customer or NTTP customer, it will take longer time for them to start using the card and accelerate the spends. To that extent, there can be a kind of a delta in terms of the breakeven period, etc., but otherwise not a very great difference between Tier 1, Tier 2 customer, and a Tier 3 customer.

Bhavik Dave — Nippon India Mutual Fund — Analyst

And on the activation rates, yeah.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Yeah, Girish?

Girish Budhiraja — Chief Sales and Marketing Officer

Yeah, on the activation rate. What you see here is the number is the average of January, February, and March. January was impacted minorly for some period of time by Omicron. 28 days a month. But by March the number is around 51% plus again back again on a net basis. Because March spends, if you see, the total rate is spends were almost INR15,800 crores plus, which essentially means that this was the highest that we have done during the — in the lifetime of the organization. So it was even higher than October. So March was a very strong month coming back. A couple of reasons further were that travel which was picking up in Q3 was suddenly got activated, impacted in the month of January.

And again came back in the month of March. While the fact is that active rate is at 52%. There are some steps that we do essentially in three buckets reiterating the product value propositions for people who are not using the card, giving them the right credit line or the right product as for their requirement. Thirdly the kind of offers that we do which is either in terms of cash back offer or segmented offer. So the customers in their categories where they are spending or where we want them to spend, we get special offers. So these are some four, five steps broadly that we take for keeping the customers active. So for example, if a customer is in active with us for 90 days, we will give him a offer after looking at his past area. So that the customer starts spending on the card. If I look at a 365-day period, more than 90% of our customers are either spend or balance active.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Sure, sir. Sorry, just one last question is and we give out the card. And this is RBI guidelines talks about activating the customers within 30 days. How do you think about that clause in that guideline for us because we have like cards where we are taking an annual fee. How do we incentivize them to start activating or is there an area that we need to work on or you think that it doesn’t matter because we already the customer generally start activating the card online 30 days within 30 days. How would you think about it?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So, you are right. We will have to do certain set of changes. First point is in terms of the definition of activation, which we will have to work with the regulator because that is not defined because activation can be when the customer comes online and switches on. The online spending switches or international switches or does some other activity, okay. However, as you are right, because typically from the date of the issue, on an average, it takes anywhere between 5 to 10 days for the customers to receive the card.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Correct.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So two days is a very less period of time. However, we will have to and this is across the industry.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Correct.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So from a definition perspective work is required. I think RBI here is looking at the safety and security of the customer that it should not happen that the customer is having the feel where the customer has not, do not have, does not have any intent of using the card.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Sure.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So that needs to be work with RBI in that sense. Even if present state, what we do is that we are giving the customer as soon as the card is approved. [Technical Issues] set of segments where we see paper, we give, send e-cards to the customer, which are utilizable from [Technical Issues] itself.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Okay.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So that is one initiative, which is very much in progress and where we have seen that the activation rates are very high because customer delight is there, but you can’t do it to all. You have to do it with safety and keeping certain measures for the customer.

Bhavik Dave — Nippon India Mutual Fund — Analyst

What percentage of INR1 million if you could read the gross additions that we have for the month, sorry, for the quarter. What percentage of it would be the e-cards rough, a broad range will be helpful.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So the details of e-card we issue for all the customers now. So the only fact that we do is whether the mobile and the email is validated. So by default an e-card is sent as soon as the card is generated on the link is sent and using that, the customer can generate the e-card online. And then subsequently physical plastic is also dispatched. So we do this as a norm in our business.

Bhavik Dave — Nippon India Mutual Fund — Analyst

Okay. Thank you, sir. Thank you so much.

Operator

Thank you. Our next question is from Dhaval Gada from DSP. Please go ahead.

Dhaval Gada — DSP Investment Managers — Analyst

Yeah. Hi, sir. Congratulations on a good set of numbers. I had three questions. The first one is for Aparna. So on credit cost this quarter we’ve seen that reverse of INR76 crore provision that we created last quarter. And if you look at the annualized credit cost, it’s around 6.5%, give or take, three percentage point. So should we expect this level to sustain and improve in FY ’23? This is a similar level that we used to see pre-COVID. So just trying to confirm that part.

The second question is for Girish. So on the revolver book, I mean, if I look at the incremental sourcing in the last two quarters. Directionally it’s moving towards more customer segment where the revolver rate should be much better compared to the stock and even the self-employed segment share is increasing. So just trying to understand when one should expect this incremental sourcing to get reflected in a better revolver rate and revolver book growth being much higher. So any like two quarter down the line three quarter just I mean indicatively how much time it could take?

And last question is for Rao, sir. In terms of ROE for the year, we’ve ended up at about 23% odd ROE in FY ’22. Do you think 25% plus ROE for next couple of years on a sustainable basis. Is it doable or any challenges that one should be cognizant of. Yeah, those are the three questions. Thanks.

Aparna Kuppuswamy — Chief Risk Officer

So let’s start with the credit cost first. So specifically the INR76 crore for the discretionary provision we had taken last quarter. Just to be able to see there was any impact of [Indecipherable]. Since we did not see any deterioration in our collectability of low rate or whatever. We have released that provision. Now as far as the overall credit cost. So if you see the number for this quarter, the number is 5.2%. On a full year basis, we are at 8.3% and like we’ve been saying in the past you are seeing a sequential decline of that number. And even with like I said basically we’ve not really seen any impact. So as far as the credit card issue is the majority of that has gone. If you look at us, you see the rate also. We are, if you remove the existing INR51 crores of management jobs that we still carry, we are at a 3.3%, which is broadly in the range of where we used to be pre-COVID in fact slightly lower than pre-COVID level.

Girish Budhiraja — Chief Sales and Marketing Officer

Dhaval, on the revolver, as MD sir was mentioning, we have seen from October in the month of November, December, January, February, both the revolver rate as well as the percentage of asset remaining at around close to 27% obviously. In the month of March, we did a program with Flipkart and we have done some other — we have seen very good spends coming back in the month of March. And that too in the nature of discretionary spends, which is essentially travel, lodging, restaurants coming back. This spend February versus March the difference was almost INR3,500 crores, which has got added into the denominator, but that spend has not got an opportunity to decide whether to revolve or to pay back or to get some part of it has already got converted to EMIs and that trend we are already able to see.

Regarding the new customer sourcing, yes, you are right, we have already started moving towards some of those segments where we had seen better revolver rates in the past. Those segment percentage in the new acquisition mix has increased. However these segments take as we have mentioned earlier also anywhere between nine to 12 to 15 months to mature and some of these segments are only three to six months because the earliest that data that we have is from November month onwards. We see a slight uptick compared to what we were doing earlier in those segments, which is a very minor thing, but it has to be on a weighted average basis. We will have to see the total as to how much impact it will have on the overall asset, revolver asset balance. So that is where the status as of now, we will, as we see more data and information around these segments and how they are behaving now, we will keep everyone posted.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Dhaval, with regard to your query around ROE. What will be the level in a year or so. I will not be able to give a number. But the philosophy wise we will be looking at sustaining a core performance. I mean by core performance what I mean is knocking over for any extraordinary items like they were kind of end of year and what we got during the year or otherwise the kind of credit cost reversal what we have seen. Whatever is the core operating performance I think it is to continue and sustain that operating performance. But one thing, one or two things we need to really look as things pan out, funding cost wise, we have seen the bottom side. No way it can go down further, rather the bias is upward.

Actually like given the kind of interest rate environment what we are seeing and the kind of inflation going up, the funding cost is likely to increase, particularly when we are also increasing our share of long-term sourcing sorry long-term resources to reduce or address a kind of interest rate sensitivity. Obviously, that will also can elevate the funding cost etc., but we will be like the way we have increased the share of EMI loans or closed, ended loans quarter-on-quarter. The attempt will be to improve it further to the extent possible. I’m not factoring in any positive benefit on account of revolver or anything, but these things actually overall will help us. And of course the second lever will be the acquisition cost. As I said earlier, definitely increasing the percentage of digital sourcing is the target area. And to the — in that initiative we have lot of a couple of strategic initiatives are already there. We are hopeful of actually reducing the cost of acquisition, which can compensate for any other [Indecipherable]. So at minimum, we will be attempting to sustain the core operating performance.

Dhaval Gada — DSP Investment Managers — Analyst

Got it, sir. Thanks, and all the best.

Operator

Thank you. The next question is from Nitin Agarwal from Motilal Oswal Securities. Please go ahead.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Thanks for the opportunity. Couple of questions. Firstly, this is on Slide 11, spends across apparel and jewellery has come down sharply and probably due to the volatility you [Technical Issues]. And, at the same time, the revolver rate has also dipped. So just trying to understand if there is a correlation here.

Operator

Mr. Aggarwal, your voice is not very clear, maybe we request you to use your handset, please.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Is it any better now?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Low now.

Operator

Sounding low.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Okay. Am I audible?

Operator

Yes, now, you are. Thank you.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Okay. So my question is around the composition of spends. If I look at slide 11 across apparel and jewelry there is a decline, sharp decline and probably due to the volatility in gold prices and at the same time the revolver rate has also dipped. So just trying to understand if there is a correlation here as on the customers who spend on jewelry typically have a higher propensity to revolver, is that the case?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

No, no, no correlation.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Okay. And, okay, and sir secondly, on the ECL provisioning. Now for stage two we are seeing a decline in ECL provisioning for last few quarters. And while it seems we have settled down for stage one and three. So where do you see this now and trending into FY ’23 and how do you see the gap between the credit cost and ECL now?

Aparna Kuppuswamy — Chief Risk Officer

Stage two declined to a large extent is driven by the runout of the RBI RE. So that’s why you’re seeing that shift. All of RBI RE less than 90 days. All sitting in stage two. That’s why you’re seeing the decline. I think the number to look at like I had mentioned earlier this is the overall ECL stage. And on that slide, you actually see on slide 18 you see how the ECL rate is dropping. We are now at a 3.3% overall ECL day and the distribution also is now pretty much close to 89% of the book is in stage one. So both of these trends are actually pointing towards the increase in the asset quality. So if you look at how it’s going, it’s much better. We are back at pre-COVID level.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Right, thanks. And lastly, any thoughts on change in MDR. Is that still in process and any discussion with the regulator on this?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

We haven’t heard anything from the regulator because the announcement was more around coming out with a discussion paper by RBI. So we haven’t seen any discussion paper in the domain, public domain.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Okay. But that possibility is still open despite these recent circular that has come around the credit card, that possibility is still open, that’s it.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

We don’t know, I cannot comment. It was around December. So we don’t know the thought process of RBI, we don’t know.

Nitin Agarwal — Motilal Oswal Securities — Analyst

Okay, sure. Thanks so much, sir.

Operator

Thank you. The next question is from Param Subramanian from Macquarie Capital. Please go ahead.

Param Subramanian — Macquarie Capital — Analyst

Hi, thank you for the opportunity. My question is again on the revolver. So I wanted to ask if there is any change like you are seeing behavior in the customer base compared to pre-COVID for this decline in revolver because this was a key issue. Is it that there are more alternative products say in flexi loans for example or our customers getting more prompts from say, digital mediums to make repayments or tie-ins. Is there any particular change you’re seeing behaviorally from customers? So that’s my first question. I’ll come back for the second.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So, Param, you’re right. There is some changes that we see. That is why even in our last commentaries that we stated that we would do not in the near-term foresee going into 33, 33, 33 which we used to be pre-COVID. So that change is there. There is definitely a preference towards land purchases moving to EMI because that growth we are already seeing in our portfolio also, and that has become more popular. However, the revolver, as the stability remains, it has been seen across the world and all places and we have also seen over a period of last 20 years that as the stability continues and the people continue to spend on the card over a period of time when they have some amount of comfort with respect to their income spending patterns, the short-term lending needs of the customer they fall. So that continues. That does come back over a period time. It does take time. This is our, as we said, we are also adding more self-employed some of those segments, which we saw earlier at the higher propensity to revolver. So both the mix is now moving in that favour as well as the existing customers, once they see the stable environment, they also change some of their behaviour.

Param Subramanian — Macquarie Capital — Analyst

Is it being led say by the availability of alternative product say for example flexi personal loans for example which are a cheaper way to revolve than revolvers or is it say prompt from digital media say Cred for example for making the payment on time are all these playing a part or is there any sense that this is a bit of a structural or a key issue or do you think that you know they should bounce back quickly?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Some of these payment options are always available to the customer. So it is credit card customer has since 1990, it has been the most premium customer in the industry. So people were always had options of PL and other kind of loans and they were taking all of these options. So it is not that those options are not available. Yes, more proliferation has happened as of now. So ease of availability is also there. So some of that might have an impact, but basic consumer behavior does not change that fast.

Param Subramanian — Macquarie Capital — Analyst

Okay, perfect. Yeah, and my second question was on the credit cost. Now that the revolvers were low, the NPAs are also very low, and restructuring is also very low. Does it mean credit card should — even in the pre-COVID sort of levels. Any sort of guidance that you’re getting over there? Yeah, those are my two questions. Thank you.

Aparna Kuppuswamy — Chief Risk Officer

Well I don’t think we’re in a position to give a guidance on the credit cost, okay. We’re actually seeing that number coming down quarter-on-quarter. For this quarter, it is actually at 5.2%. And for the full year we are down to 8.9%. The idea like we said last time is to, we are in the business of taking risk. I don’t think the plan is to keep bringing that down. There used to be a band that we use to operate pre-COVID and the idea we will optimize the credit card. We are not in the, we are not saying targeting to bring it down absolutely. The number to look at, if you look at our ECL rate, we are now at 3.3%, ex-management is up. It is largely on account of the RBI RE. That is a good number to look at, because that’s the kind of number that we will be operating at the future.

Param Subramanian — Macquarie Capital — Analyst

Perfect. Thanks, Aparna. Thanks, team. All the best. Thank you.

Operator

Thank you. The next question is from Nilang Mehta from HSBC. Please go ahead.

Nilang Mehta — HSBC — Analyst

Thanks for taking my question. Most of my questions have been answered. But just one quick one from [Technical Issues] landscape and while we’ve seen some marginal dip in our market share and you’ve seen revival of few of the banks also at the margin improving their market share and one large bank gaining a lot. So could you give a context on how does management think about market share? And is that the relevant metrics to focus on or we are we think that — that’s that would be just an outcome and not something we are targeting?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Yes, you are right. There is a kind of action by the existing players. And there is also I mean entry of new players, which has expanded the card issuance on a monthly basis. When we look at it, it has expanded it almost 80%, 90% from a stable scenario what we used to see like INR0.8 million, INR0.9 million. We used to see per month kind of issuance but now which has increased to INR1.9 million also. Yes, I mean, in terms of retail in the market share that will call for existing players will have to increase the issuance. But one has to look at the, what is the kind of customer segment we are looking at, what is the opportunity, what is the cost of acquisitions, what is [Technical Issues] what is the value of the customer lifecycle etc., and what are the internal profitability metrics.

So that way our approach has always been a kind of calibrated approach. It would have been like if we have ramped up our insurance in fact for a large part of the time we have been the largest issuer, but we had some kind of attrition that way, the net growth is slightly lower than the overall issuance. So I think our aim will be to look at opportunities. Of course, we have a good partnership with parent bank like SBI through the Shikhar kind of programs where we acquire the customers of even Tier 3, Tier 4 kind of towns without having the physical infra at a much cheaper cost that we will continue to leverage. Through the digital new to [Indecipherable] that channel is expected to be fully operational very soon and that will also help us. And partnership of course we had a very good partnership. We continue to look for opportunities. So overall approach is to ramp up, but in a prudent way and which can give us a kind of sustainable growth.

Nilang Mehta — HSBC — Analyst

Sure, sir. Thank you for that. And then lastly, so how are we doing on YONO app of SBI. So in terms of market share, there are trends, if you could give some color where we could have?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So, basically, we’ve given two sets of servicing on the YONO app. So we are as a business tightly integrated with the YONO app. What it means is that existing customers of the bank who come onto YONO can seamlessly apply for the SBI Card. So that’s on the acquisition side. Now one other set of features that we have given on YONO is around the servicing part. So what it means is that once you’ve on-boarded and you’ve gotten a card from us though the YONO route or even I would say outside of the YONO route any of our existing customers can go onto YONO and avail a set of full services on the YONO app, which includes seamless ability to pay. So from your bank account, you can seamlessly view your credit card statement. You can view the bill and you can make a payment.

So in terms of integrating and embedding ourselves in the YONO ecosystem, we do already have a very, very strong integration. I think, sir, also mentioned previously that our focus for the coming year is going to be on digital. We have put a digital journey, for which pilot has been completed. A couple of products on our website are already there for an end-to-end digital acquisition. A similar roadmap. We put it on one of our digital transformation slides in the Investor Day has been taught for the YONO route also. So an end-to end digital journey via YONO. So that’s our play on YONO.

Nilang Mehta — HSBC — Analyst

Thank you, sir. Thank you so much.

Operator

Thank you. The next question is from Mahesh MB from Kotak Securities. Please go ahead.

Mahesh MB — Kotak Securities — Analyst

Hi, a add-on question to what the previous participant highlight, this year you have grown the overall target at about 17%. In your assessment how are you looking at for the year ’23?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Well, we couldn’t really understand the question. Can you repeat that?

Mahesh MB — Kotak Securities — Analyst

Sir, just trying to understand what is, in your assessment, target growth that you are looking at in terms of cards for next year?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

I think more than the, I mean, topline what we are looking at it, I said like, we also have a kind of attrition. So the determining factor will be targeting the improving the net addition, so that we have been improving over a period of time. We used to be around 180,000, 190,000 kind of net growth per month. Now we have even in the month of March we have take it around 240,000 approximately. So idea is to increase it to at least the kind of 300,000 over a period of time.

Mahesh MB — Kotak Securities — Analyst

Okay. Sir, just one additional question. When you’re looking at your spends of your customers, are you seeing more traction where existing customers are increasing limits and increasing spends, or are you seeing more traction with new customers coming in and increasing their spends?

Girish Budhiraja — Chief Sales and Marketing Officer

It’s a good question. This year was very interesting. We have seen both coming in, okay. So the average spend per customer, if you see, and that is declared, which is there on, I think, slide number nine. The average spend per customer in last year’s Q4 was around 123 [Phonetic]. So that has gone up to 161. So not only existing customers have started spending more. And this is what we have been stating in earlier discussions that lot of new categories have come in for the customer to spend, the existing categories which had gone out. So travel is slowly coming back not fully, restaurants is slowly coming back, railways is coming back. So there is still a whole lot of room to catch up on these ones. So both have happened in this year.

Mahesh MB — Kotak Securities — Analyst

Perfect. And one last question. How many of your total card base about INR15 odd million, how much should be today tap-and-pay cards available?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Tap-and-pay.

Girish Budhiraja — Chief Sales and Marketing Officer

So close to 100% of our issuance that we do. They can do tap-and-pay transactions, okay. So all cards issued by SBI Card can be used for tap-and-pay. Of the point of sale transactions, we see one-fourth of the transactions are coming as tap-and-pay.

Mahesh MB — Kotak Securities — Analyst

Okay. And the customers, I mean, for you tap-and-pay customer is lot more active as compared to a customer who dips a card?

Girish Budhiraja — Chief Sales and Marketing Officer

You’re absolutely right. It is — that customer is more active and that customer’s number of transactions in a month is higher.

Mahesh MB — Kotak Securities — Analyst

Okay. And why not just kind of detail all your cards with tap-and-pay. Sorry, just a follow-on question for this. That’s my last, sir.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Mahesh, couldn’t get that you know the…

Mahesh MB — Kotak Securities — Analyst

Just trying to understand is there any, is the success of tap and pay card is much more. Is there any, is it possible for you to kind of use this penetration by replacing existing card through the tap-and-pay?

Girish Budhiraja — Chief Sales and Marketing Officer

So, okay, what happens is that with the tap-and-pay customer a lot many more low-value transactions also start to come in, because tap-and-pay typically now works with less than INR5,000, earlier the limit was INR2,000. So the customer what we have seen is that the tap-and-pay ticket size is less than four-digit number, okay. So it remains in that degree. So you will have more transactions but spends wise, the difference is there, but not very high.

Mahesh MB — Kotak Securities — Analyst

Okay, perfect. Thanks a lot, sir.

Operator

Thank you. [Operator Instructions] The next question is from Karthik Chellappa from Buena Vista Fund Management. Please go ahead.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Yeah, thank you for the opportunity, sir. My question is basically on the competitive intensity per se. Do you feel that the competitive intensity of the industry relative to the last four or five years is possibly now at its highest level and the context in which I asked this question is the number one player is now back in the game. The number two player in spends continues to be very aggressive and the number four player just did an acquisition. And if I look at their last quarter net adds, it’s almost equal to us in terms of number of cards. So none of these happen together any time in the last four or five years. So is it fair to say that the competitive intensity is probably at its highest and in that context what is the spends market share aspiration that we can have?

Girish Budhiraja — Chief Sales and Marketing Officer

So, you are right. Competitive intensity is amongst the highest that we have seen and it is not only within the players within the industry, it is from some of those prepaid player giving OD limits on the cards. So that is also whether you call it new banks or a low ticket size, the NPL kind of a player. So there is a competitive density from within the industry and outside the industry. As was stated earlier, we will continue to follow profitable growth. We have been in this business for more than 25, 23, 24 years. So more than two decades. We know how to play this even in amongst all these changes we have continued to sustain our market share. We will strive to grow it, but we will want to do it in a profitable fashion.

For example, we have increased our corporate card spends, but we have not taken it to a level where which was possible, but at a impact of either a cost to income or in terms of profitability. So we will look at growth, but also keep looking at profitability and sustainability in the long run. Competition is good. It gives us more opportunities. It’s also enables us to be nimbler, it also enables us to cut costs at places where we can do it. It will, we will also go more digital as was stated earlier. So, all these actions, we will continue to do and stay sharper in the market.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Got it. Just one clarification, sir. The Q-on-Q decline in the income from fees despite the strong growth in spends. Is that due to the March promotion campaigns?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Income from fee, if you look at it, the spends have, on a quarter-on-quarter basis, spends are lower. So that impacts the interchange fee. However, membership fees are higher, because we’ve been sourcing now million cards on a quarter-on-quarter basis. Those have gone up. The interchange fees purely because festival spends are higher. So interchange accordingly was also higher.

Karthik Chellappa — Buena Vista Fund Management — Analyst

Okay. This is very helpful. That’s all from my side, sir. Wish you all the best. Thank you.

Operator

Thank you. The next question is from Ravi Singh from Motilal Oswal Asset Management. Please go ahead.

Ravi Singh — Motilal Oswal Asset Management — Analyst

Thank you for the opportunity. Sir, my question is about co-branded cards. Are you expecting any major impact because of the clarification from the RBI in the recent Master Directions on the cards businesses. How are you expecting industry practices to change or any impact on your co-branded cards? And can you also use this opportunity to just share some numbers on co-branded cards? I mean how, what percentage of your open source cards or co-branded card assuming bank cards mainly core cards or maybe other percentage of spend and how is the industry evolving assuming that bulk of the major merchants would already be having some partnership. So how do you expect this product to evolve and what role SBI card will play? Thank you.

Girish Budhiraja — Chief Sales and Marketing Officer

So three parts to your question. First is co-branded cards as per the new regulation cannot, can only be a distribution partner, can sell those products to their customers. But there has to be no data around those customers, spending patterns and other things to be — some of with this co-branded partners. In the industry, this practice of some co-branded partners having the data started with some of these online co-brands. Before that with offline co-brands or fuel co-brands this kind of practice was never there because there the co-brand was used as a tool for building loyalty, but however with some of these online players they use some of these data for further cross-selling their own products to some of these customers. So that practice will have to stop as per the new guideline, that data cannot be shared.

Co-branded partners will remain very, very key especially in going further in the digital environment as more new customer acquisition will go digital. Having those partners, so that customer purchases the card in the path of purchase journey is very critical. Some of these partners also have lot of data, which can be used as alternate data for underwriting at all stages. So co-branding will continue. I think it will continue to grow. It is already with some players. They either do their bank cards or some of these co-brands. While we do co-brands, bank cards as well as open market. So this is how it’s going to conclude.

Operator

Thank you. The next question is from Prakhar Agarwal from Edelweiss. Please go ahead.

Prakhar Agarwal — Edelweiss — Analyst

Yeah, hi, sir. Just couple of data keeping questions. And then probably I have a follow-up. So what was the reward provisions for this full year FY ’22, if you have that number?

Girish Budhiraja — Chief Sales and Marketing Officer

Are you looking at the quarter number or?

Prakhar Agarwal — Edelweiss — Analyst

The full year number.

Girish Budhiraja — Chief Sales and Marketing Officer

So full year, well, we have. I’ll give you the specific number, but in the beginning of the year there was hardly any accruals because the spends had not started coming in. During the course of the year, we made provision of something like INR100 odd crores, the core provision. But this is increasing on a quarter-on-quarter basis. So do not go by what has happened during the course of the year. But over a period of time, this is a good cost, because this means that the customers are doing dispense and are using the cards and are also redeeming the reward points.

Prakhar Agarwal — Edelweiss — Analyst

Okay. Just in terms of your fee incomes of — while I understand the fact that you said that your spends has increased. That’s why your spend based fees has increased. But when I look at from a year-on-year perspective, when I look at that MDR as a percentage of average spend that number seems to have gone up and substantially, what explains is that. So MDR or interchange fees that we probably charge on average spend basis for FY ’22 that number seems to have gone up?

Girish Budhiraja — Chief Sales and Marketing Officer

You’re saying the interchange fees has gone up, sorry, I didn’t.

Prakhar Agarwal — Edelweiss — Analyst

Yes. Sir, if I look at the spend based fees, which as a percentage of your average spend that number has gone up from FY ’21 to FY ’22 what explains and that by materially. So what explains that?

Girish Budhiraja — Chief Sales and Marketing Officer

So because the spends have gone up. So the number has also gone up because interchange fee is another spends and little bit of ForEx markup is also coming back. And since we are having higher spends, the network incentives etc., some of the milestones have also kicked in and that’s the reason why the interchange fees or the spend based income is going up.

Prakhar Agarwal — Edelweiss — Analyst

Got it. And just one last data keeping questions. What was the write-offs that you did for the full year FY ’22 gross number?

Girish Budhiraja — Chief Sales and Marketing Officer

So it is in the region of INR2,100, INR2,500 crores. I’ll give you the exact number.

Aparna Kuppuswamy — Chief Risk Officer

INR2,800 odd crores.

Prakhar Agarwal — Edelweiss — Analyst

Sure. Thank you so much. That is it from me.

Girish Budhiraja — Chief Sales and Marketing Officer

INR2,800 odd crores including the settlement losses.

Prakhar Agarwal — Edelweiss — Analyst

Right.

Operator

Thank you. The next question is from Piran Engineer from CLSA. Please go ahead.

Piran Engineer — CLSA — Analyst

Yeah, hi. Good evening. My first question is that the share of new card sourcing from Tier 3 locations has gone up from 19% to 30% Q-o-Q. So what really explain that and correspondingly the share of SBI Bank in the sourcing has gone down and this seems a bit counterintuitive because I thought SBI was more for the Tier 2, 3 locations. So have we started open market sourcing in Tier 3 to get more revolver type of customer?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

I mean for SBI we also have partnership with some of the banks. So that will also give us actually foothold into Tier 3, Tier 4. Yes, you are right. Slightly during the month of January I think our SBI sourcing has slightly come down that got reflected in the lower numbers for the month of January, but that was partly compensated by posting from the partner banks.

Piran Engineer — CLSA — Analyst

No, but in that case, the banca share should go up, right, has gone down 300 bps or so?

Girish Budhiraja — Chief Sales and Marketing Officer

The banca is pure SBI sourcing. The co-brand banking include part of the open market.

Piran Engineer — CLSA — Analyst

Okay. Got it. And just one other question and this may be a bit silly, but through credit bureaus would you come to know if your customer is using another credit card more often?

Aparna Kuppuswamy — Chief Risk Officer

Yes, we do get, and it used, see, some people report limit. We do a quarterly bureau for most of the customer or some we do monthly also. So you do figure out whether they have other card, whether they are building balance on the other card. And all of that information is actually consumed not just from a credit perspective, that information is also used by the marketing team to design appropriate offers, and activation offers and things like that.

Piran Engineer — CLSA — Analyst

Okay. Got it. That’s good. Thank you and all the best.

Operator

Thank you. The next question is from Shubhranshu Mishra from Systematix. Please go ahead.

Shubhranshu Mishra — Systematix — Analyst

Hi. Thanks for the opportunity. Just couple of questions. One is how do we look at the collection.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Shubhranshu, can’t hear you. If you can be a little bit louder?

Shubhranshu Mishra — Systematix — Analyst

Am I audible?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

You are audible, but the voice is slightly on the low side, but go ahead. Maybe we can hear it.

Shubhranshu Mishra — Systematix — Analyst

Sure. So just wanted to check what was the cost of collections in FY ’22 and how do we look at the cost of collections as a proportion of opex going forward as the situation normalize in FY ’23 and ’24. The first one. Second is that we offer encash. Just wanted to clarify. We offer encash only to the transactors or is it offered across the board to revolvers as well and what is it as a proportion of the receivables?

Girish Budhiraja — Chief Sales and Marketing Officer

So I’ll answer the second question first. Yes, we offer encash to transactors primarily. Some revolvers, low infrequent revolvers, we do offer encash. We do not offer encash to continuous revolver or people who have been sustainably with revolving. The rates are different. This is the way that we look at risk profiling of some of these customers. We have not declared the encash numbers separately in our term balances. But as you can see that the term balance on an overall basis is now almost 35%, 34% of the total overall asset. So there is a growth substantial growth that we are doing on the encash asset.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So the cost of collection is round about 2% of the rupee collected and rupee recovered and we don’t see that this cost is going to go up, now that we are stabilizing and we are out of the COVID period. So it should be around this number or maybe improve. That’s how we see this.

Shubhranshu Mishra — Systematix — Analyst

2% of what sir, I couldn’t figure it off?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Of the rupee recovered and rupee collected.

Shubhranshu Mishra — Systematix — Analyst

Great. And that remains same in business as usual?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Yeah.

Shubhranshu Mishra — Systematix — Analyst

Right, sir. One last question if I can squeeze in. Just a data keeping question. What is the NUNP never use, never pay proportion of our cards?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

I don’t have the number at this point of time, but what we do is that if a customer is, NUNP customer and he flows into 90 days, we automatically reverse all the charges of that customer and block those customers. And over a period of time, period of 12 months, we exit them out of our portfolio. So it is not that we will continue to keep NUNP customers with us forever on a constant basis.

Shubhranshu Mishra — Systematix — Analyst

Right. Thank you. Best of luck.

Operator

Thank you. The next question is from Rahul Shah from Bay Capital. Please go ahead.

Rahul Shah — Bay Capital — Analyst

Hello.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Hello. Go ahead, please.

Rahul Shah — Bay Capital — Analyst

Yeah. Sir, my question is the employee cost number has come down significantly this year. So what is it related to and how can we build going forward?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So employee cost is more or less stable and we are down…

Rahul Shah — Bay Capital — Analyst

No. As a percentage of income I’m saying.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

That’s the beauty of it that we don’t have to employ that many people to increase as the business increases. But on a year-on-year basis, one thing that you have is that you have the ESOP cost which is always front-loaded. So in the initial year the cost is higher. And then because ours was the fixed options that were given at the time of IPO. So those in the subsequent years come down and that is also impacting this. We do use a lot of outsource staff also for certain specific activities, and as the volume of business grows, it’s not necessary that we have to hire employees. We use technology as well as outsource staff to manage the operations.

Rahul Shah — Bay Capital — Analyst

Okay. Second thing I have noted that over the years from Q3 to Q4 generally the receivables go down, but this year that has not been the case. Despite revolver being a lower as a percentage of total receivables. So what happened this year some spending differences or something else?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So actually that is what I was trying to explain. In the month of March, the spends came back very strongly. If you see month-on-month movement, March had close to, we did almost 15,800 crores plus spend on retail, which was higher than even the October season month. So a whole lot of that has not added into the denominator. So that you see as asset at this point of time in the denominator or the balance sheet. The asset does increase. The increase is not that high. So in the month, in the GSM quarter compared to OND, there is usually an increase. It does not go down, but it’s a marginal increases.

Operator

Thank you. Ladies and gentlemen, we take the last question from the line of Rohan Mandora from Equirus. Please go ahead.

Rohan Mandora — Equirus — Analyst

Sir, thanks for the opportunity. Just two data keeping questions. One, sir, on the revolver, how are the average quarterly balance move to Q-o-Q and in Q3 and Q4?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So, on an absolute basis, the revolver balance has actually increased although in the percentage terms. You see it has declined. It is more, as was explained earlier, that was the last week we had a campaign, which led to increase in strength and that’s why the percentage wise has dropped, but however on absolute terms revolver balance has actually increased from Q3 to Q4.

Rohan Mandora — Equirus — Analyst

Sir, can you quantify the increase, average, quarterly average?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Quarterly average in the sense, are you asking for revolver rate?

Rohan Mandora — Equirus — Analyst

Yes. No revolver balances for October, November, December average.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Yeah, Q3 to Q4, the revolver rate has been stable. It has not moved. It’s the same.

Rohan Mandora — Equirus — Analyst

Okay. And the second was, if you look at the slide, then a sharp dip in the cost of fund by around 50 basis points. So…

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Cost of?

Rohan Mandora — Equirus — Analyst

Funds.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

See there is a little bit of play of averages are, we’ve always stated that our cost of daily cost of funds have been around 5.3, 5.4 as towards the end of the quarter, if you increase the spends and increase the NEA, the cost of borrowing seems to be on the lower side. So that’s the reason why you’re seeing it a 4.9%. However on a daily cost of fund basis we’ve been somewhere around 5.3, 5.4 and throughout the year that has been stable. Having said that, as was pointed out earlier, the interest rate, the environment has changed, the cost have started increasing, and so would be the case for us also. The cost of funds would go up. The numbers that are presented here, the averages of receivable, so that sometimes is misleading.

Rohan Mandora — Equirus — Analyst

Sure, sir. And just lastly in case as interest rates are likely to go up. Will we look to increase the yields that we charge on the EMI portfolio or will that remain a function of the competition?

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

So at this point of time we look at both the cost of funds as well as what is the competitive rate. Whatever we give to our customers is at fixed rate. We are not issuing giving loans on variable or floating, but rates. It’s only on fixed rate that whatever said. So we review this every quarter, and if it is required, we will increase it depend looking at both the scenarios. Confidential scenario is also as critical. While it has to be above the benchmark rates. We will look at competitive seen also to build the balances.

Rohan Mandora — Equirus — Analyst

Sure, sir. But hypothetically in case the competition doesn’t move then we will also not move. That would be a fair assumption to take.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Yes.

Rohan Mandora — Equirus — Analyst

Okay, sir. Sure, sir. Thanks a lot.

Operator

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Rao, MD and CEO of SBI Card for closing comments.

Rama Mohan Rao Amara — Managing Director and Chief Executive Officer

Thank you, Stanford. I must thank all my colleagues at SBI Card who have worked spiritedly and tirelessly while helping the SBI Card to navigate with volatile environment. I would also like to thank our shareholders and business partners who showcase continued faith on us and they supported us throughout our journey. I would like to reiterate that as an agile and adaptive organization, we will take all measures to safeguard our business while pursuing sustainable and profitable growth. As I conclude I will request everyone not to lower their guard and continue to take all measures to stay healthy and safe. Thank you all and have a good evening.

Operator

[Operator Closing Remarks]