Union Bank of India Ltd (UNIONBANK) Q2 FY23 Earnings Concall Transcript

Union Bank of India Ltd (NSE: UNIONBANK) Q2 FY23 Earnings Concall dated Oct. 20, 2022

Corporate Participants:

Ranjita Suresh — Assistant General Manager, Investor Relations

A. Manimekhalai — Managing Director and Chief Executive Officer

P. K. Samal — Chief Financial Officer

Unidentified Speaker —

Nidhu Saxena — Executive Director

Meda Venkata Balasubramanyam — Head-Treasury & IBD

Arun Kumar Singh — RBI Nominee Director

Analysts:

Ashok Ajmera — Ajcon Global Services — Analyst

Jai Mundhra — B&K Securities — Analyst

Nitin Aggarwal — Motilal Oswal — Analyst

Anand Laddha — HDFC Mutual Fund — Analyst

M B Mahesh — Kotak Securities — Analyst

Suraj Das — B&K Securities — Analyst

Rishikesh Oza — RoboCapital — Analyst

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Union Bank of India Earnings Conference Call for the period ended September 30, 2022. The Bank is represented by the Managing Director and CEO, Ms. A. Manimekhalai; Executive Directors, Shri Nitesh Ranjan, Shri Rajneesh Karnatak, Shri Nidhu Saxena, and other members of the top management.

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. [Operator instructions] Please note that this conference is being recorded.

Now, I hand over the call to Mrs. Ranjita Suresh, Assistant General Manager, Investor Relations. Thank you and over to you, madam.

Ranjita Suresh — Assistant General Manager, Investor Relations

Good afternoon, ladies and gentlemen. I, Ranjita Suresh, Head of Investor Relations, welcome you all for the Union Bank of India earnings con-call for the period ended September 30, 2022. The structure of the con-call shall include a brief opening statement by MD and CEO, and then the floor will be open for interaction.

Before getting into the con-call, I’ll read out the usual disclaimer statements. I would like to submit that certain statements that may be discussed during the investor interaction may be forward-looking statements based on the current expectations. These statements involve a number of risks, uncertainties and other factors that cause the actual results to differ from the statements. Investors are therefore requested to check the information independently before making any investment or other decisions.

With this, I now request our MD and CEO for her opening remarks. Thank you. Over to you, ma’am.

A. Manimekhalai — Managing Director and Chief Executive Officer

Good afternoon to all of you. At the outset, let me wish you all a Happy Diwali. Today, we have come out with our results and coming to the Union Bank’s business and financials for the quarter ended September 30 for FY 2023. The Bank has continued to post strong financials as the total business has grown by 13 — 17.33% Y-o-Y, the total advances registered a growth of 21.92%. Within that, the RAM sector has grown by 14.45% and domestic advances is standing at 54.57%, as against a corporate credit of 46%. The total deposits has grown by 14.14% Y-o-Y, led by CASA deposit growth of 9.42% Y-o-Y. The CASA ratio has — is standing at 35.63% as of September 30, 2022.

The net interest income grew by 21.61% of Y-o-Y, the NII stood at INR8,305 crores and the global NIM is 3.15% for the quarter ended FY 2023. The operating profit of the Bank has improved by 8.29% Y-o-Y to INR6,577 crore, and the net profit is at INR1,848 crore, registering a growth of 21.07%. The asset quality of the Bank has improved, the gross NPA ratio stands at 8.45% and the net NPA stands at 2.64%, which is 197 basis points over September 2021.

The CRAR has improved to 13.64% — from 13.64% to 14.5%. And the return on assets is also at 0.61%. As you are aware, the Bank has brought many structural changes in the existing setup by way of introduction of various STP [Technical Issue], MSME and retail segments. We have also introduced specialized branches, corporate relations cell and various other initiatives have been taken by the Bank to increase the business and to increase the footsteps of the Bank.

With this, we have also — if you remember that we have given guidance for the financial year 2023, and let me reiterate the guidance. The deposit growth was to the extent of about 10% for FY ’23, advances growth in the range of 10% to 12%, CASA ratio in the range of 37%, NIM to be around 3%, credit costs at 1.7%, delinquency ratio at less than 2% and gross NPA, less than 9% and NNPA at less than 3%.

These are my opening remarks and we are now open for Q&A session. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Ashok Ajmera from Ajcon Global Services. Please go ahead.

Ashok Ajmera — Ajcon Global Services — Analyst

Yeah, thank you, ma’am for giving this opportunity. And complements to you for coming out with good set of number, and — almost on every parameter. Having said that, I have got a couple of observations, questions and some clarification. My first clarification I would like to have, which is on the taxation front, which Mr. Samal can elaborate, this total Note, Note number 14, that reverse DTA of INR1,436 crore and then reversal of the provision of taxation of earlier year of INR607 crore, so in a nutshell, during this quarter, how much amount is impacted in the provision for taxation and in other provisions? Can you please get this clarification, ma’am?

P. K. Samal — Chief Financial Officer

Yeah. [Indecipherable]. You have rightly read it. There is a reversal deferred tax of INR1,436 crore during the quarter.

Operator

Sorry to interrupt you, sir. The audio is not clear from your line.

Ashok Ajmera — Ajcon Global Services — Analyst

Whose line? My line or Mr. Samal’s line?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yes, Samal’s line only.

P. K. Samal — Chief Financial Officer

Yeah, Ajmera, can you [Indecipherable]

Ashok Ajmera — Ajcon Global Services — Analyst

No, no. I can — yeah, yeah, I can hear you, sir. What I want to know basically, that the provision for tax is only INR652 crore, which is around I’d say 22%, 23% of — or 25% of the profit of this quarter. So how much of this reversal of DTA reversal of provision of taxation these figures have gone into the other provision?

P. K. Samal — Chief Financial Officer

Right. You have rightly said, also we disclosed in our open account INR1,436 crore, these are deferred tax reversal, which is linked to the capital loss account, right. And there is another — we have disclosed that there is a provision reversal of INR607 crore, which is a provision reversal on account of certain IKK[Phonetic] and other post decision that has come in Bank’s favor, because we normally provide our taxation on a fundamental basis and pay along that. But sometimes we get the [Indecipherable] as well, we get the provision released. So that is the [Indecipherable] basically. Because we have to pay on a conservative basis [Indecipherable] So on that account, we got INR607 crore reversal. [Indecipherable] is basically the net [Indecipherable] of the account. And you know the Bank for the current year also because of our higher provision, [Indecipherable] the Bank’s tax liability is going to be very, very minimum, and we are continuing to pay the tax under MAT, Minimum Alternative Tax, which is very less. So we also take the MAT credit on the account, and the difference between the MAT tax and MAT credit. So all these put together, [Indecipherable] whatever [Indecipherable]

Ashok Ajmera — Ajcon Global Services — Analyst

So I mean, as a prudent measure you’ve done, you have taken the — I mean, the net provision you have done, but based on this final court judgment and the thing — I mean, this figure will be added in the profit of the Bank according to you, isn’t it?

P. K. Samal — Chief Financial Officer

Right. MAT we are contesting, there are different decisions, something in favor of the Bank, something against other banks. So that is there, that has gone to a larger bench of — special bench of the tribunal. So that decision will come as and when. So there will not be much, because we are paying MAT — we are doing MAT provision and taking MAT credit, so much things will not be there. Post that it will be nullified.

Ashok Ajmera — Ajcon Global Services — Analyst

Sir, my. Second question is on this note number 12 of the fraud account, generally all the banks are giving the full number. That how much was the profit in this quarter, how much provided for, how much total provision is made, whereas in your case, it is only, has been given has been provided for. So in this quarter, how much provision for the fraud accounts have been done? Beyond whatever has been carried forward about a INR1,100 crore something. [Indecipherable]

P. K. Samal — Chief Financial Officer

Yeah, Ajmera, what happens know, when we declare any account is fraud, so automatically 100% provision is made. That is the default [Indecipherable]. But then our policy — as per our policy and whatever the RBI has permitted the Bank, the Bank has the option to carry-forward the provision into four quarters and we do that [Indecipherable] So these are the [Indecipherable] basically carried forward.

Ashok Ajmera — Ajcon Global Services — Analyst

No, no, In this quarter — in this quarter, how much has been provided for? Hello?

P. K. Samal — Chief Financial Officer

This quarter, it may not be much, it may not be much. I’ll tell you, I don’t have the figure right now. Because it gets settled into the ageing provisions, actually. So therefore, right now, I’m not going to tell you exactly how much. But then I will tell you [Indecipherable] we are carrying forward basically. [Indecipherable] Tamil Nadu, which is basically [Indecipherable] INR680-odd crore out there, which will be fully provided next quarter, December quarter, it’ll be fully settled in our ageing provision. So totally it will be wiped out. Similarly, another large account is there, so, it will be — going ahead, it will be in the next — December, March, quarter, it will be fully outdated[Phonetic]

Ashok Ajmera — Ajcon Global Services — Analyst

Okay. My next question is on the recovery, ma’am. On the recovery front, about that INR10,000 crore of target, can we have a clear picture now, in these two quarters, what has happened and now going forward, in the remaining two quarters, where do we stand? And are we increasing this target of recovery and what is the status of the NARCL now, going to — I mean, I believe that nothing has been done up to 30th September 2022, but going forward, how many accounts and how much amount is going there?

A. Manimekhalai — Managing Director and Chief Executive Officer

Ajmera, the guidance is INR15,000 crore for recovery, and as on date, we have done INR8,900 crores we have already. So we are keeping the guidance to INR15,000 crore. Regarding NARCL, Ashok, we’ll — [Technical Issues]

Unidentified Speaker —

Yes, good afternoon, Ajmera. As of now, there is a visibility of three accounts, which is already there in the public domain, which has been given by the NARCL. And these three accounts, we are there in these three accounts, but there are other two accounts where our exposure is not there. So these three accounts, our exposure is around INR1,000 crore and we are likely to get around INR444 crore.

Ashok Ajmera — Ajcon Global Services — Analyst

Out of INR1,000 crore, you’re going to get INR444 crore?

Unidentified Speaker —

Yes.

Ashok Ajmera — Ajcon Global Services — Analyst

No. That is the total this thing, or it is including the cash and the –?

Unidentified Speaker —

No, no, this is total. This is total.

Ashok Ajmera — Ajcon Global Services — Analyst

This is the total amount which we are going to get in it.

Unidentified Speaker —

Yeah. [Technical Issues]

Ashok Ajmera — Ajcon Global Services — Analyst

Okay, ma’am. Now coming, ma’am, on this credit side growth, our sanctions amount that we generally see is much higher than the amount actually disbursed, especially in the corporate books. So I would like to just have a little picture of that, that how much during the quarter we have sanctioned and how much during the quarter we have disbursed, especially in the corporate book now? And going forward, what is our plan to achieve this growth of 12% of the advances?

A. Manimekhalai — Managing Director and Chief Executive Officer

So as on date, we have got about unavailed limit of about INR21,000 crores, so the sanctions to disbursal is almost like 60% to 70%, and going forward, we will be able to reach the target that what we have given to the range of 10% to 12%, we will be able to achieve that kind of growth numbers.

Ashok Ajmera — Ajcon Global Services — Analyst

Thank you.

Operator

Sir, please go ahead.

P. K. Samal — Chief Financial Officer

Yeah. so as madam said, we have got an unutilized limit of INR21,000 crore, other than that, we have got ample limit, put together, we have around INR50,000 crores of funds which we have. Maybe some of them on other documentation [Phonetic], some of them are liquids [Phonetic] were sanctioned, so put together, INR50,000 crore [Indecipherable] of pipeline we have. So we have clear visibility of credit growth in the coming quarter.

Operator

Thank you. Mr. Ajmera, may we request that you return to the question queue for follow-up questions? The next question of from the line of Jai Mundhra from B&K securities. Please go ahead. Mr. Mundhra, your line is in talk mode, please go ahead with your question.

Jai Mundhra — B&K Securities — Analyst

Hello.

Operator

Mr. Mundhra…

A. Manimekhalai — Managing Director and Chief Executive Officer

Hello.

Operator

Please go ahead with your question.

Jai Mundhra — B&K Securities — Analyst

Yeah. Hi, sir. Yeah, hi, ma’am, good evening. I have a couple of questions. One is, there was a recent RBI notification on new rating norms, wherein RBI has mandated that the Bank’s name should be clearly mentioned in the rating document of the rating agency to get the rating benefit. Are we — so, a, just wanted to understand, ma’am, what does — what is the intent behind the RBI — behind this circular? And would this — and how are we practice — what are the normal practice as of now?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yeah.

Unidentified Speaker —

Yeah. To respond, basically, this is for large exposure accounts. What RBI has observed is that in large exposure accounts, the rating is, say if it is a INR7,000 crore rating, it does not mention which are the banks which — for which this rating is, this INR7,000 crore total rating. There may be a multiple banking account, which has 10 to 15 banks or a consortium account, which having — which is having 12 banks. So there is a short-term rating and a long-term rating. To obviate this, what RBI is now saying to the rating agencies and banks is, that you mention the name of the bank for which the rating is ascribed for the amount which is given. So this is the basic intent of RBI.

Jai Mundhra — B&K Securities — Analyst

Right. So if you have, let us say three facility and maybe multiple facility, that rating has to be there for each of the facility or it would be at single bank level?

Unidentified Speaker —

Yeah. So what happens is, normally, sometimes, it happens that, say, Union Bank has given a term-loan of INR500 crore and a cash credit of INR200 crore, right? So INR700 crore exposure is there in accounts, and now we sanction another INR400 crore of a term-loan — fresh term-loan. So is that INR400 crore term-loan, additional term-loan is not reflecting in the rating now? Henceforth, then it will be a issue. So immediately, the auditors will also catch it and others will also come to know that this INR400 crore, which we have given fresh is not covered. So this is the basic intent here.

Jai Mundhra — B&K Securities — Analyst

Right. And now, after this circular gets implemented from March, in this case, you — the rating document would have the clear detail of Union Bank in these three facility, right? It would be facility wise or it would still be corporate-level exposure?

Unidentified Speaker —

Yeah. It should be bank-wise total exposure.

Jai Mundhra — B&K Securities — Analyst

Right. Not the facility…

Unidentified Speaker —

Some other clarity is yet to come. Presently what we are presuming is bank-wise, say State Bank has given to X company this much, Union Bank has given this much, Bank of Baroda has given this much, this kind of thing would be there.

Jai Mundhra — B&K Securities — Analyst

Right. Understood. Just to…

Unidentified Speaker —

So another clarification which we are awaiting from RBI is with respect to whether though it will be kicking off from 1st April 2023, but there are certain ratings which will get due after 15 months as per RBI guidelines. So will that happen after the re-rating happens or do the Reserve Bank wants it to be effective in all rating as on 1st April? That clarification is yet to come from RBI.

Jai Mundhra — B&K Securities — Analyst

Right. Understood, sir. That is that’s very well explained. And ma’am, so on interest income this quarter, I know it’s — there is a very strong loan growth and there is a very strong interest income growth — interest income from — income on loans. I just wanted to check so it has gone up from INR12,000 crore to INR13,800 crore. Is there any one-off or is there any component which has come from NPA recovery and has now become a part of the interest on advances?

A. Manimekhalai — Managing Director and Chief Executive Officer

About INR700 crores has come from [Technial Issues] — Hello?

Jai Mundhra — B&K Securities — Analyst

Yeah, yeah, ma’am, sorry.

A. Manimekhalai — Managing Director and Chief Executive Officer

Yeah, I was just telling you that about INR700 crores has come from NPA recovery in this amount. In that INR13,811 that you are seeing, about INR700 crores has come from NPA recovery.

Jai Mundhra — B&K Securities — Analyst

Understood. And rest is all business as usual, right, in the normal interest rate?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yes, absolutely.

Jai Mundhra — B&K Securities — Analyst

Right. Okay. And ma’am, in your guidance slide, while we have done very well, I mean it looks like either you have not updated the guidance or I’m not able to understand that advances growth so far is 21.9% and we are still maintaining like 10%, 12% range. Do you see a very sharp deceleration in the business growth in the second half or how should we look at the advances growth and same as the GNPA number that you have put out?

Unidentified Speaker —

No, no. This is only a mathematical thing situation which is there, the 20% growth of advance which you are seeing now is year on year, right? So we are comparing it from September ’21 to September ’22. September ’21, our advance was not elevated actually, the growth has happened post-March, actually. It happened in March, the acceleration happened in December ’21, then March ’22, then June ’22. Now it has been growing in the last three quarters. So, March ’22 — ’23 guidance we are keeping at 10% to 12% because our March ’22 advance was elevated, so it has already started picking up. So the percentage growth in March ’23, we are — that is why keeping at a rate of 10% to 12% only.

Jai Mundhra — B&K Securities — Analyst

Right. Understood. And last question, sir, from my side. Our core CET1 Tier-1 number that you have put out, this includes the first half PAT, right? Or it does not include the first half PAT?

Unidentified Speaker —

No, no, it doesn’t include the PAT.

Jai Mundhra — B&K Securities — Analyst

Sorry, sir, I missed that.

Unidentified Speaker —

It doesn’t include the profit. Profits — quarterly profits, we don’t take.

Jai Mundhra — B&K Securities — Analyst

This is including or not including?

A. Manimekhalai — Managing Director and Chief Executive Officer

It is not including, Jai.

Jai Mundhra — B&K Securities — Analyst

Okay. Yeah. Thanks for the clarification and all the best, ma’am.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead.

Nitin Aggarwal — Motilal Oswal — Analyst

Yeah. Hi, ma’am. Thanks for the opportunity and congratulations on good numbers.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you. Thank you, Nitin.

Nitin Aggarwal — Motilal Oswal — Analyst

Ma’am, I’ll take forward from this guidance slide again. So the first half growth is already 10%, so when you look at by March, of course, there’s an elevated advances number and we did see advances growth picking up last year in the second half, but over the March closing, we are already up 10%. And so which is where if you can indicate as to what sort of, say, some of these key operational numbers, like margins, asset quality and advances growth, are we really looking for during FY ’23 because we are tracking significantly ahead?

Unidentified Speaker —

Yeah. So as far as guidance is concerned, we are keeping the guidance at the same number, reason being, that is a lot of geopolitical and other issues which are there in the market. So factoring that, we are not changing the guidance at present.

Nitin Aggarwal — Motilal Oswal — Analyst

And the [Technical Issues]…

Operator

Mr. Aggarwal, sorry to interrupt you. The audio is breaking from your line. Please check. Mr. Aggarwal, the audio is breaking from your line.

Nitin Aggarwal — Motilal Oswal — Analyst

So, shall I come Shall I come back again, if it’s not audible?

Operator

Yeah, please proceed now. Mr. Agarwal, I request you to join the question queue, the audio is breaking from your line, sir.

Jai Mundhra — B&K Securities — Analyst

Okay, okay.

Operator

Thank you. We’ll take the next question from the line of Anand Laddha from HDFC Mutual Fund. Please go ahead.

Anand Laddha — HDFC Mutual Fund — Analyst

Hello, ma’am. Ma’am, congrats for good set of number. Ma’am, just wanted to understand whether NII includes INR700 crores of interest recovery from NPA? If I had to exclude the same then our NII is almost flat this quarter, on a Q-o-Q basis. So just wanted to understand ma’am, despite the RBI repo rate hike, we haven’t seen any margin improvement for us. If you can give some outlook on NIM side.

A. Manimekhalai — Managing Director and Chief Executive Officer

Yeah. NIM is almost 3.15% for this quarter, and we have kept a guidance to 3%. The repo whatever the 190 basis points that RBI has given us, that has been factored into — in our repo-linked rate 190 basis points. BPLR has been already passed on to the customers, and to MCLR to the extent of 76 — sorry, 65% — 65 which has already been passed on. And our yield-on-ratio — yield-on-advances has also improved to 7.65% for this quarter. And going forward, we will see — because these things came only in this quarter, in the last two months of this quarter. Going forward we will see some increase in our interest on advances.

Anand Laddha — HDFC Mutual Fund — Analyst

Okay. Ma’am, if I have to remove this INR700 crore you indicated which is the recovery of interest on return of asset, if had to remove that, because that’s a one-off, then our NII growth has been almost like flat Q-o-Q.

A. Manimekhalai — Managing Director and Chief Executive Officer

It’s about 13 — Yes.

Nidhu Saxena — Executive Director

Yeah, in fact you can see the last quarter of the factoring of the — interest recovery in the NPA, last quarter also it was INR600 crore was there. So every quarter if you see the recovery through the NPA account, in the interest component that is around INR600 crores to INR700 crores.

A. Manimekhalai — Managing Director and Chief Executive Officer

In September ’21.

Nidhu Saxena — Executive Director

So September also, you want the — September ’21, it was around INR640 crores.

Anand Laddha — HDFC Mutual Fund — Analyst

Okay, the same quarter last year, it was INR640 crores, this quarter it is INR700 crore?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yes.

Nidhu Saxena — Executive Director

Yes, yes.

Anand Laddha — HDFC Mutual Fund — Analyst

Okay.

Nidhu Saxena — Executive Director

That component is constant. I think it is in the range of around INR600 to INR700 crores, that component will continue in the next quarter also. So it is not one-off item, it is like your interest income on the standard assets.

Anand Laddha — HDFC Mutual Fund — Analyst

Perfect, perfect. I mean, if you can give some — this quarter the slippages are quite low, if you can give us some outlook for the full-year slippages how do you see that? Do you see this run rate of current quarter sustainable for us? And also if you can give some outlook on provision cost for us?

A. Manimekhalai — Managing Director and Chief Executive Officer

See, the guidance is, the slippages will be to the extent of 3%. That is what we want to keep it, 2% is what we want to keep. And this time, the slippages were to the extent of INR2,913 crores. And we are hopeful that we will be able to reduce those numbers, going forward. The slippages what we are seeing is — stress is what we’re seeing is only in MSME book and retail. Retail slippages are not coming up. Only in MSME book and Agri, we are seeing some slippages, which we will be able to reduce further.

Anand Laddha — HDFC Mutual Fund — Analyst

And despite that, you wanted to keep your guidance of 3%. I think you will end up this year with a 2% slippages run rate?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yeah, we hope to reach that number.

Anand Laddha — HDFC Mutual Fund — Analyst

Okay. Ma’am, this quarter the recovery and upgrades were higher than the slippages.

A. Manimekhalai — Managing Director and Chief Executive Officer

Yes.

Anand Laddha — HDFC Mutual Fund — Analyst

Do you believe that this is sustainable for us? What sort of recovery upgrades we expect for the full year?

A. Manimekhalai — Managing Director and Chief Executive Officer

See, we were looking at INR15,000 crores of upgradation and recovery for the whole year, FY ’23 and slippages to the tune of INR13,000 crores. That was the guidance given. So what we have done is for this FY — H1 FY ’23, we have done INR8,900 crores of recovery, and about INR6,000 crores and odd of slippages. So we will be able to reach the guidance at what we have given. My slippages will be below the recovery and upgradations. Much below that.

Anand Laddha — HDFC Mutual Fund — Analyst

Okay, okay. And lastly, on the tax rate side, we are on the new tax regime or we are still on the old tax regime?

A. Manimekhalai — Managing Director and Chief Executive Officer

We are in the old regime only.

Anand Laddha — HDFC Mutual Fund — Analyst

And by when do you believe it will move to the new tax regime?

A. Manimekhalai — Managing Director and Chief Executive Officer

Samal, any thoughts?

P. K. Samal — Chief Financial Officer

Sir, we are reviewing that. Current year also, our tax liability [Indecipherable] so we will remove this next year. This year we are not moving towards that regime. [Indecipherable] is very, very minimum. Next year, we will remove and [Indecipherable]

Anand Laddha — HDFC Mutual Fund — Analyst

And ma’am for us, this first half if I see the loan growth, a bulk of the loan growth has come from the corporate sector. If you can give some color which sector have the growth come in, demand has come in?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yeah, the RAM growth is also — RAM also has grown to an extent about 14.95%, this has grown by of course by 21% — the corporate book has grown by about 21%. The growth has come in the corporate sector with regard to infrastructure, funding has happened on NBFCs, we have seen some growth on chemical, we have seen some growth in steel and pharma and cements also. Textiles we have seen some growth.

Anand Laddha — HDFC Mutual Fund — Analyst

And — okay. Perfect. And do you believe that quarter-on-quarter from here on the growth will desolate significantly?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yes. But we want — but our guidance is that we want to keep our corporate books at 40%[Phonetic] and RAM at 55%.

Anand Laddha — HDFC Mutual Fund — Analyst

Okay, perfect. Thank you, ma’am.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of M B Mahesh from Kotak. Please go-ahead.

M B Mahesh — Kotak Securities — Analyst

Hi. I have two questions ma’am. One is, there has been a sharp jump again in the International loan book, if you can just kind of give us some color, what is the nature of these exposures that you are taking today, and whether they have some linkages back to Indian corporates out there? Hello?

Meda Venkata Balasubramanyam — Head-Treasury & IBD

Hello?

M B Mahesh — Kotak Securities — Analyst

Sir, I don’t know if you’ve heard the question?

A. Manimekhalai — Managing Director and Chief Executive Officer

Mahesh, you’re able to hear?

M B Mahesh — Kotak Securities — Analyst

Yeah, I am able to hear now, but I don’t know if you heard my question ma’am?

A. Manimekhalai — Managing Director and Chief Executive Officer

No, no. That’s what, you were talking about the — our overseas business, there has been a sharp jump in the advances in the overseas book.

M B Mahesh — Kotak Securities — Analyst

Yes ma’am.

A. Manimekhalai — Managing Director and Chief Executive Officer

That was the question? Yeah. That was — Bala of my IBD Chief General Manager is replying to your questions.

Meda Venkata Balasubramanyam — Head-Treasury & IBD

Good afternoon.

M B Mahesh — Kotak Securities — Analyst

Yeah.

Meda Venkata Balasubramanyam — Head-Treasury & IBD

Mahesh, basically we didn’t concentrate any of the — like, Indian or like that we don’t have the differentiation. Basically these are syndicated loans, and much of the new sanctions are for the banks, basically to talk one of the prime banks we have given the loans. Majority of that. Of course, there are there are one or two India-based companies also ECB loans we have given during this particular half year.

M B Mahesh — Kotak Securities — Analyst

Ma’am, these exposure — sir, these exposures that you take — how, what is the kind of duration that you typically take on these loans?

Meda Venkata Balasubramanyam — Head-Treasury & IBD

Duration? Yeah, on an average we are taking around three years, not beyond three years. We have a request for around five years also, but we are not taking that. Yeah, maximum payout is — average payout is three years.

M B Mahesh — Kotak Securities — Analyst

Okay. Ma’am second question to you. There is about INR1,500 crores provision on standard assets this quarter, what is that pertaining to?

P. K. Samal — Chief Financial Officer

[Technical Issues]

Operator

Sorry to interrupt you sir, the audio is breaking.

P. K. Samal — Chief Financial Officer

[Technical Issues]

M B Mahesh — Kotak Securities — Analyst

Sorry, I don’t think so we can — sir, I don’t think we are able to hear you.

P. K. Samal — Chief Financial Officer

Okay. [Technical Issues] Yeah, am I audible now?

M B Mahesh — Kotak Securities — Analyst

You are a little bit distant, but we can — it’s definitely — we can hear it.

Unidentified Speaker —

Sir, these are relating to standard asset provision, mostly relating to certain large corporate accounts where there are some delay in resolution plan implementation, because there are accounts in multiple banks — these accounts, they have exposure in multiple banks. And as per the RBI circular, there is a default and the bank has to put in place a resolution plan, so basically these are certain large accounts, which are as per the RBI guidelines.

M B Mahesh — Kotak Securities — Analyst

Sorry, so you mean to say that these are NPAs currently in your books? Or this would potentially become an NPA.

Nidhu Saxena — Executive Director

No, no. There is no NPA. There is no NPA.

Unidentified Speaker —

But just to clarify all these accounts are either consortium accounts or multiple accounts, and they are hitting the 7th June 2019, circular wherein there is in-out of SMA in the acrylic [Phonetic], so that is where the RBI observation was to make provision in these accounts. And these are all common industry accounts where other banks are also there.

M B Mahesh — Kotak Securities — Analyst

Okay. But that number seems to be fairly large, right? Because if you’re saying it — because this quarter, again…

Nidhu Saxena — Executive Director

The entire part is not for those accounts. So this entire provisioning is not for those accounts. There is a normal standard provisioning also 0.25%, 0.4%, 1% also. And some COD provisioning also, where the infrastructure projects where we extend the COD we want two years, we have to make 5% provision. So all these combined together is this figure of INR1,400 crores.

M B Mahesh — Kotak Securities — Analyst

Right. Okay. And my final question, with settlement, do you start making provisions from next quarter? How — what is the thinking behind that?

A. Manimekhalai — Managing Director and Chief Executive Officer

November — no, December quarter, we will start making provisions.

M B Mahesh — Kotak Securities — Analyst

Okay. Okay. Done. Thanks a lot.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Suraj Das from B&K Securities. Please go ahead.

Suraj Das — B&K Securities — Analyst

Hello. Hi, ma’am. Thanks for giving me the opportunity. Most of the question has been answered, only a couple of questions. In your DTA book, what would be the total outstanding accumulated losses, if you can give us the figure?

Nidhu Saxena — Executive Director

DTA, total accumulated loss. DTA, accumulated loss.

Unidentified Speaker —

As of now, our accumulated before [Phonetic] tax [Indecipherable] is INR10,335 [Phonetic] crores.

Suraj Das — B&K Securities — Analyst

Sorry, sir. INR10,000 crore is the total DTA book, what would be the accumulated losses — total accumulated losses?

Unidentified Speaker —

No, we don’t create any DTA on accumulated losses. This is not on accounted [Phonetic] losses. Basically, the difference comes from a part of this provisioning, because whatever bad debt provisioning we make in our book, everything is not available for Income Tax Act, that is the reason the difference come. We don’t create any DTA on losses.

Suraj Das — B&K Securities — Analyst

Okay. But you would be having some accumulated losses on your book, right? Even if you don’t have DTA on that, but you still have some accumulated losses on your book, right?

Unidentified Speaker —

That is there. That is there. But we will take very conservatively. So it is now around INR3,000 crores-odd of accumulated losses [Indecipherable] set up against our taxable income, and they understand the [Indecipherable].

Suraj Das — B&K Securities — Analyst

INR3,000 crore that is you are saying?

Unidentified Speaker —

INR2,900 crore.

Suraj Das — B&K Securities — Analyst

Okay, okay. Understood. And now, in the ECLGS book, which is roughly around INR6 billion [Phonetic], so what would be the GNPA or delinquency here in this book on the ECLGS?

A. Manimekhalai — Managing Director and Chief Executive Officer

Arun, do you have data on that? ECLGS, how much is in NPA?

Arun Kumar Singh — RBI Nominee Director

3.5% is NPA.

A. Manimekhalai — Managing Director and Chief Executive Officer

3.5%.

Arun Kumar Singh — RBI Nominee Director

3.5% is SMA-2.

A. Manimekhalai — Managing Director and Chief Executive Officer

About the ECLGS book, 3.5% is the NPA and same amount under stress also.

Suraj Das — B&K Securities — Analyst

Okay, okay. Understood. And the last question from my side would be on the restructured book, so you have given restructuring 1.0 and 2.0 figures, is there any other restructuring number? I mean, which is pertaining to previous — earlier MSME scheme or CDR, SDR or anything outside these two numbers?

A. Manimekhalai — Managing Director and Chief Executive Officer

No RF-1 and RF-2 numbers we have given. This is the only restructured book that we have got. And one-time restructuring also under COVID that also we have given you. There the gross advances — the percentages to gross advances is 2.6%.

Suraj Das — B&K Securities — Analyst

Okay, okay. So this INR20,000 crore, that is — this is the total restructured book for the Bank?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yes.

Suraj Das — B&K Securities — Analyst

Okay, okay. Thank you, ma’am.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you. Thank you, Suraj.

Operator

Thank you. The next question is from the line of Rishikesh Oza from RoboCapital. Please go ahead.

Rishikesh Oza — RoboCapital — Analyst

Hi, sir. So only one question from my side. Please indicate on the tax rate for H2 FY ’23.

Unidentified Speaker —

FY ’23 is normal taxes, we are in the normal tax regime.

Rishikesh Oza — RoboCapital — Analyst

Okay. Okay, fine. Got it.

Operator

Thank you.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you.

Operator

The next question is from the line of Rakesh Kumar from Systematix Shares. Please go ahead.

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

Yeah, hi. Thanks for the opportunity, ma’am. Just two questions I have. Firstly, if I see the domestic investment book, the yield has gone up by around 10 bps and 11 bps and like in the first half or maybe from the June to September also the movement is just around 15 bps. We are holding the duration of around 0.5 years on the SLR side, and the majority of the investment book would be SLR itself, around 90% plus. So why that we have seen in the market that yield movement is pretty sharp on the shorter end? Why our yield has gone up by just around 13, 14 bps? What is the reason behind it?

Unidentified Speaker —

These are all shortened duration treasury bills, which don’t have any much impact on the yield movement. Our portfolio of 60% consists of the treasury bills, that is why the duration is very low. So impact on the short hand curve go — moved up, but treasury bill is — have not gone up such an extent, that is why we are not having much impact on the MTM portfolio as well as on the interest rate yield curves.

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

No, sir. I was not referring to the MTM losses. That would certainly not be there if it is FRB, or if it is T-Bill. I was referring to the yield movement in the system and our yield movement on the domestic book is just around 10, 13 bps, though the yield movement in the system is much, much higher. So if you see the 364 days T-Bill, it has gone up by around 50, 55 bps in this quarter itself. So why our yield movement is not reflecting what is happening in the system? Because if the duration is so low, we would have churned the book also, so.

Unidentified Speaker —

Yes, we have. These Treasury bills are 91 days and 180 days. The majority of our 60% of the portfolio is treasury bills, so it has got matured and it has been replenished with the new 91 days T-Bill, so the impact will be 15 to 20 bps only.

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

Okay. I will take it offline, sir. Sir, the next question I had on this slide number 16, that has given on a corporate loan rating. So we have BB and below of around 11%. So out of this 11%, what would be the number of percentage of loans which are actually not rated? Like some of the government SCBs and all, and what is the remaining portion? Thank you, sir.

A. Manimekhalai — Managing Director and Chief Executive Officer

See, this 11% of the BB and below are mostly MSME loans, and this is all covered under the CGTMSE. So you cannot say that these are not unrated ones.

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

Okay. So these are rated, but rated BB and below and are covered under the CGTMSE?

A. Manimekhalai — Managing Director and Chief Executive Officer

CGTMSE, yes.

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

All loans?

A. Manimekhalai — Managing Director and Chief Executive Officer

Yeah, some portion must be the personal loans also. But these are all loans that we give to salaried employees or where the account is with the Bank itself for quite some time. And this is through an STP journey that we have given these personal loans. But majority, almost 90% of the BB and below are MSME loans only.

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

Sure, sure. Very nice. Very nice, ma’am. Thanks. Thanks for the clarification.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you. Thank you, Rakesh.

Rakesh Kumar — Systematix Shares & Stocks (I) Ltd. — Analyst

That’s it from my side. Thank you.

Operator

Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.

A. Manimekhalai — Managing Director and Chief Executive Officer

Thank you everyone for the insightful discussions. We are grateful [Technical Issues] the opportunity for the continued support and feedback that helps us to take informed decisions in our journey towards efficiency and profitability. Once again, wishing you all a Happy Diwali. Thank you all of you.

Operator

[Operator Closing Remarks]