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Bandhan Bank Ltd
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Ladies and gentlemen, good day, and welcome to the Bandhan Bank Limited Q4 earnings conference call. [Operator Instructions] Please note that this conference is being recorded.I would now like to turn the conference over to Mr. Hiren Shah.
Thank you, Janice. Good evening, everyone, and thanks for joining this conference call. We are glad to welcome you all to discuss Bandhan Bank's business and financial performance for the quarter ending March 2020. Along with that, we'll also take the opportunity to update on the recent development in industry as well as Bandhan Bank. To discuss all this in detail, I've got with me our Founder, Managing Director and CEO, Mr. Chandra Shekhar Ghosh; our Executive Director Designate, Mr. Sudhin Choksey; our Chief Financial Officer, Mr. Sunil Samdani; and myself, Hiren Shah, Head of Investor Relations.Now I would like to request our Founder, MD and CEO, Mr. Chandra Shekhar Ghosh, to brief you all about the financial performance of company and development during the quarter. Over to you, sir.
Thank you, Hiren. So welcome to all of you. This is the Bandhan Bank's fifth financial year result, and it's about 5 years, we are running this bank, that it is a very -- closing of the year is a very closing -- very, very challenging period. And all of you know that the last 10 days of March, we have not been in the business, and that disbursement and collection have not happened. After that also, the -- even in this situation, bank's performance has been -- strong growth has come. The profit growth has come year-on-year 54.96%, which is the profit that has been done in the bank INR 3,024 crores. If -- and at this time, also this quarter, we are additionally provisioned INR 690 crores on the basis of standard asset against the potential impact of COVID-19. And so that -- otherwise, the profit was INR 3,408 crores. So now we say that after taking this provision, the profit has come INR 3,024 crores, which is year-on-year basis 54.96%. And the last quarter profit had come INR 517 crores. But if we do not consider the INR 690 crores as the provision extra, so our profit in this quarter will be INR 902 crores.So coming to the advance. Advance, we have been seeing that our growth has come 60.46%, and the portfolio is at INR 71,846 crores compared to the last financial year, that consists of growth. If it comes to the deposit, there is a very strong deposit base of the bank. And we are seeing that the deposit growth has come [ to 32.04% and the deposits ] -- total amount of INR 57,082 crores. And the microbanking deposit is at 6% yearly. And very strong is our retail deposits, 78.4%, and our retail deposit has been growing, Eastern region 32%, but non-East 51% growth has come of the deposit.And the gross NPA, 1.48% and -- as on March 31, 2020, and net NPA 0.58%. If you see the gross NPA from the last quarter, last quarter, it was 1.93% that's come down to 1.48%; and net NPA from 0.81% in the last quarter, which has come to 0.58%.[Technical Difficulty]
Sir, for the last 10 seconds, we could not hear you, so if you can please repeat.
Okay. Okay. I'll say that the deposits growth has come 32.04%, which is the amount-wise, INR 57,082 crores is the deposit. And out of these deposits, very strong in the bank is the retail deposit of 78.4%. Eastern region deposit growth has come 32%, but non-East zone deposit has come 51%. And this is -- the deposit is a very strong -- whatever the balance is today, it is higher than the March balance.And coming to the gross NPA, 1.48%, which was in the last quarter 1.93%, it has been reduced. And net NPA has come 0.58% from the last quarter, 0.81%, it has also reduced. ROA, 3.64%. If we are not accounting INR 690 crores additional provision, it will be near to the last time, 4.11%. ROE 21.07%. And the bank has a very strong capital adequacy ratio, 28.04%. And out of that -- our Tier 1 out of that is 25.78%.Cost-to-income ratio has come down from the last year. Last year, it was 32.58%, now it is 30.82%. Even it is down from the last quarter also.And net interest income is down to INR 6,324 crores, and non-net interest income, that has also come INR 1,549 crores for the year. And fee income out of total income 12.46%, which was in the last year 11.54%.Our NIM retained the same from the last time. It is -- if we compare the -- sorry, last quarter it was 7.91%. Now it has come, NIM, at 8.12%.CASA, 36.84%. And our banking outlets, 4,559 banking outlets, 485 ATMs and customers are 20.10 million and employees 39,750.So these are the total figures, whatever I said, that we achieved on that, I give the thank you to all of you. And thank you, my team and the Board, for all of their help to help us to perform on this much of the business. We are trying to go in the future that is a more diversified of the loan book and more secured book we would like to continue like as in affordable housing and geographically expansion also we would like to continue across the country. So thank you to all of you. If you have questions, I'd like to take that opportunities, please.
[Operator Instructions] We take the first question from the line of Prashant Poddar from ADIA.
Sir, if you can help us understand what's happening separately in green, orange or red zones in terms of business activity as to what's happening, what's not happening, how are customers responding.If you could also help us understand percentage of your customers who are actually seeing a sizable impact on their business. We see resilient, low impact and marginal impact, but these are subjective. These are views. In reality, what percentage of customers are able to do business and collect some revenues? And what percentage of customers are really impacted enough to kind of not be able to pay for some time? And are there -- is there a certain percentage of customers you can tell us which will not be able to be back in business and could be a permanent loss for you? And based on this, any assessment of credit cost range for the full year?
Okay. Thank you for this question. It's a very tough time of this year. And whatever, we are not in a -- predict on the basis of history anything. But 1, 2 points which I learned from my field when we have contacted the customer, 95% to 97% customers, we have been conducted in the regular basis. And a couple of customers I talked, and my senior team member also talked on that, what is their views on the overall perspective is that there is a -- they are not able to come out from their home. That means the lockdown. They say that the -- until the lockdown is not open and you are not able to come and we also not maybe come to your office, so that is a big challenge for all of us on that. But their feedback of that, when the lockdown will be open, there will be another 4 to 6 weeks needed to normalize, and they say that they will be repay and normalizing it, if you can give 4 to 6 weeks' time to us. I feel that maybe another 4 weeks can be added, but this will depend on that when lockdown open and people will start.Second point I'll find out on that, that my 50% of the customers are in bulk of these agri and allied, which is agriculture crop has come very good, their income is coming good. But they are also ready to come to the office to repay on that. So that is on one side we see that. And it depends on the lockdown. And food processing, we have about another 20%. 70% of the customers have the essential goods business. So that -- these people, their business, some of them -- many of them are businesses running, and they are -- have not lost their money. So that -- this is one advantage I feel that they are like to -- and it will be immediately started and they are starting repayment on that. So these are the overall -- but these people -- another thing I have been find out on that, these people are very high risk takers because when they are seeing -- they have been seeing some of the business is a little bit disrupted, they will change the business other way. If I see that the toto, people have not moved to one area to another year, toto income has been closed, but they are using this toto for vegetable sales to the door-to-door. So I feel that these people are very keen about it and that they have utilized their money and not lost their money, the previous experience I've also seen that. So I hope that after the long lockdown opens, they will return back to their business and coming forward to repay the installment.
Mr. Ghosh, just kind of it's a bit of a macro question, but I mean there are questions being raised about the whole business model wherein the lowest denominator will see the highest impact in the -- in this kind of economic environment, and we haven't seen a lot of support yet coming from the government. In absence of that, is there a likelihood of very high impact on asset quality in the medium term?
If you see that the asset quality, that means our asset quality depends on that -- my customer asset quality. So if we feel that the asset quality of the customer lost due to the natural calamity that has come, floods, we've seen that Fani, in different way we have been seen that. So that time, they lost their effort, they lost their money, they lost their house. And that time also, if you recent the -- one of the incidents in Fani in Orissa, we saw that, that time we had been lost either 1% of the business on the portfolio. So though it is in rest of industry have been losing at 6.5% as per credit bureau data. So I say that at this time, they have not lost their shop, not lost their house, not lost their business. They're only saying that they are not getting the business running. So that is the challenge on this time. This time it is better. Earlier, whatever that we say that the macro and other things on that. And these people will be -- get very quick revival once they able to restart as far as their business goes, so it will be like to open the lockdown, immediately people started to movement. So their toto, their auto and their shop, everything will be very picked up, will come back. So that is the one hope we find out in this segment on this.
Okay. Sir, one last question, sorry, which is about -- we are hearing from a bank also which operates in microfinance that there has been instances and -- measurable instances of politicians interfering in the whole cycle, I mean, wherein they are asking customers that they don't need to pay, et cetera. Would you see that as any risk in the -- in any parts of the regions that you operate in?
No, this is a good time now all the people who are in administration, government and political opposition, everyone try to help to the public.
We take the next question from the line of Karthik Chellappa from Buena Vista Fund.
My first question is, could you please share the thought process behind arriving at the INR 690 crore of standard provisioning? Is this a blanket provisioning which you have made on your loans? Or have you identified a certain stock of loans which you feel risky and taken a higher position on that?
So Karthik, the situation that we are in is very unique, right? But we still have to do an assessment of risk. So we have done our assessment of risk based on 2, 3 factors. One is the industry in which these customers are, how that industry, the businesses in which these customers are doing, how that industry is faring. So that's one way we looked at. Accordingly, we estimated the loss rates into those industries. The other way we looked at is our prior experience of handling challenges because that's how -- because you can't get a similar comparison, but broadly, you can find a comparison where the business -- ability of the customer gets impacted due to natural calamity.So we've looked at last 5 large challenges that we have faced in the industry, namely GST, demonetization, UP farm loan waiver, Fani cyclone in Orissa and the Assam crisis that we had, right? So if you break these 5 events, challenges, broadly, 3 of them are something where the ability issue or the business had got impacted, whether it's Cyclone Fani or it is GST or demonetization. So what we have seen, consistently -- there are 2 messages here. One is that we have consistently performed better than industry across all kinds of challenges, across all geographies, not only in our core areas. Even -- so there, what we have seen, whenever the challenges have the ability issue where the business gets impacted, the losses are relatively less because these customers have the ability to come back faster to normalcy.There, we've seen the loss rates have been in the range of 0.5% to 1.5% incremental. But when the issue comes to the willingness issue or the credit crisis issue, where -- we look at the UP farm loan waiver or the Assam crisis, where the businesses were running normal, but the customers were instigated not to pay, there we've seen a relatively higher loss rates of about 3% to 4%.We believe this issue is the ability issue, a natural calamity, right? It's a medical pandemic. So the -- once the lockdown is lifted and the situation improves, these customers will bounce back quickly. And accordingly, we have conservatively taken a provision looking at both micro-banking, affordable housing and MSME portfolio.
So this INR 6.9 billion, is this like a portfolio that -- I mean a provision that you have taken just for this quarter, so next quarter you will again assess? Or do you think this is reasonably sufficient until the time the lockdown is actually lifted?
We have taken INR 6.9 billion this quarter. In addition to that, we have INR 3.1 billion already as an additional standard asset provision that we carry in our books. So both put together is about INR 10 billion. And the way we assess the risk today, assuming that this economy and the country starts opening up in the next 15 to 20 days, we believe this situation or this provision that we are carrying, based on our assessment, of course, we'll have to keep evaluating as the days go by. But currently, it looks like this is the provision.
Got it. Because another way I thought about this is in your disclosure of a marginal impact, of loans worth about INR 2,700-odd crores, the general provision that we have taken of INR 690 crores effectively works out to a 25% provision. So is that one way also that you can look at it, that you have identified the most vulnerable segments, out of that you have taken a quarter of them as basically a standard provision for the time being?
See, it's a combination of all. We can't just say that this is the most vulnerable section and hence 25% because these businesses in rural area won't get impacted so much, right? Because there we have not seen the COVID impact so much. And if you look at our distribution, about 81% of distribution is in the area which has contributed only 5% of the COVID cases for the country. So it's a mix of both, where the businesses are of our customers and the industry in which they are operating in.
Got it. Sir, one more question on the non-micro part. So if I just look at the moratorium availed across mortgages, SME, the highest is supposedly the NBFC MFI segment, which is about 59%. How should we read this? Because there is also a commentary which is saying that you have enough deposits in your account, which equals to the first quarter installments. So if I club this together, how would you assess the risk of this portfolio?
See, for NBFC MFI, it is very natural to ask for a moratorium because they have, in turn, given moratorium to their customers because the microfinance requires doorstep collection. So this was very natural to -- for them to offer. So what we have seen in the cases where we have given loan to NBFC MFI, their liquidity position currently is fairly stable. But we want to preserve cash till the time they start the collection, right? So that's why if you see, their deposits with us are almost 4 to 5 months of installments that they need to pay to us, but they still have asked for moratorium. So they have cash. They want to preserve cash because they have, in turn, given loans to -- moratorium to their customers. So that's how we should read it.
Got it. And just one clarification issue, sir. In the marginal impact sector, there is one sector which is basically called Other Transportation, which is basically the third largest component of the micro loans. What exactly would those sectors pertain to?
So this would largely pertain to autorickshaw and taxi.
Okay. Autorickshaw -- and this mix would, by and large, be similar to your micro loan mix? I mean the 60% would still be West Bengal, Assam; 40% would be non-Eastern states?
Absolutely.
Next question is from the line of Deepak Gupta from Reliance Nippon Life.
If you could just give us some details in terms of your total AUM. How much of it will be arising from the areas where lockdown has been lifted, basically from green and orange zones? And how much will it be from the red zone?
So in a world of -- 78% of our business are in the green zone, 16% is orange zone and 5.5% in the red zone.
Understand. Understand. And sir, if you could give us details of your PAR of less than 30 days. How is that number looking like presently?
Yes. Sunil?
Yes, so about -- between all the 3 verticals, micro, housing and SME, about 3% of our book is 0-plus.
Okay. Okay. And 30-plus would be how much?
And 30-plus -- just a second. 30-plus is 2.2%.
Okay. Got it. And just one last question on the balance sheet. Your loan-to-deposit ratio has been clocking at -- quite healthily at about 120% to 130%. Any thoughts of that in terms of at what level will this sustain at?
See, if you look at our CD ratio or the loan-to-deposit ratio, this has gone up largely because of the merger, right? Otherwise, before merger, our entire liability was deposits. We didn't have any borrowing. And particularly this quarter is higher because of the excess liquidity that we are maintaining, right? So we have taken refinance, and we have kept it in the liquidity.
Understand. Understand. Understand. So do you foresee this CD ratio coming down in the next few quarters?
Yes. If you look at the normal business as usual, if I have to not carry this excess liquidity, this loan-to-deposit ratio would have been in the range of 105% to 113% currently.
We take the next question from the line of Bhavik Dave from Nippon Mutual Fund.
Just wanted to understand, sir, on your -- on the business front, specifically post the normalize and the lockdown opens up, wanted to understand how do we intend to run the microfinance business? Like, will there be any changes that we are looking at in the way we will do the business? Or will it come back to normalcy within a short period of time whenever things normalize in the geographies? Because it's a very high touch and feel business, how does the business change from a longer-term perspective?
So what we saw that our 81% of our micro credit advance from East and Northeast, these regions are 5% effect of the COVID-19 cases. And 62% of our banking unit, which is micro credit office, concentrated in East and Northeast. It is in our 5% only the COVID cases on that. In that sense, the large number of our micro credit portfolio and the -- and it is in part where there is a very small amount of COVID effect. Only point is that, that is in some area are green, yellow and red. On that basis, this is in one side.Next point we find out that 95% to 97% customer we have conducted during the time of lockdown. We are continuously conducted on that. And we find out from the feedback from the customer business point of view. So they are saying that they have -- after opening the lockdown, they are asking us 4 to 6 weeks for their side to normalize the installment. And I have been a little bit in agreement with it, and I feel that maybe another 4 weeks, I can react. So because of these people, the basic goods seller and depend on local supply chain, agri and agri allied 50%, food and food processing 20%. From that reason, I think that they are -- they are needing -- these types of customers need a commitment. When they commit, they must return back on that. So for that reason, this business is also is in good book-wise and the essential goods. And they are saying that it will take another 4 to 6 weeks to normalize. I also think that's maybe another 4 weeks more. So this is then my position on this.
Okay. Just on the green and red zones that you spoke about, there is a report by the Ministry of Health where 3, 4 districts that we have a reasonable presence, 24 North Parganas, 24 South Parganas, Midnapore, all these districts are classified under the red zone and -- where we have a reasonable amount of business. So what is happening? Or what is the update on these 3, 4 districts?
If you see that the Bengal-specific you are asking? I'm not...
Yes, yes, Bengal-specific. So the 4 districts which we have reasonable presence are marked as red zones.
Okay. So again, if you go to that and that, that is a red and yellow zone. You can again deposit in the containment area. So if you say that the Kolkata containment area is very strong, any number is more, if you go to this -- the Hooghly is not that much, but they have restricted some of the pockets as a containment area, and people can move within that districts in other areas. Same in the North 24 Parganas and South 24. In that sense, I say that's very concentrated in the containment area in Kolkata, which is not that much of the business though. So other districts are surrounded. All the 4 districts is the surrounding of Kolkata, and the pocket is very much a small number.
Sure. And sir, last question is on the disbursement front. As and when the lockdown opens, and you rightly said that we will take 4 to 6 weeks to come back to normalcy, will we support them by disbursing top-up loans to their existing customers for them to normalize their business activity?
If you see that the -- I'm coming to the other point on that, if you can understand. Till now, it isn't different. What happened is that the March -- the last 10 days, we have not collected, not disbursed. All that suddenly happened, but we are -- that hasn't reduced. Now we have been -- last 15 days, we have started the office, very closely observed the business, accordingly, we a little bit started disbursement of that. So this is in one side.Other side on that, we are till now not sure about it, that the people will be -- these 2, 3 months, people have been finished their all of the capital. No, these people are very much conservative and very good way they are handling their cash. For that reason, I'm not feeling that they are -- because you see that we have about 500 -- 640 people survey in the -- this is just to the COVID across the 6 states, including the Bengal, Bihar, Delhi, like on that.And find out on that their average monthly income INR 40,500 per month. So these type of customers, if you see, that is my 52% of the customer are more than 4 cycle means 4 and above cycle. And -- this people is in multiple business. 2.3x they have diversified their business. So these people within the 2 months, 3 months, they have lost their capital, it's not like that. So that is another one. But if they ask on that, yes, they have -- some liquidity is there because the business opportunities also will come more, because at that time, everything from a business point of view is dry, people and everything has been finished as a consumer of their goods in what is the home or very conservatively, they are pursuing the goods. Each that time, they have need to -- further liquidity support to grow their business more. We will like to check their liquidity, their capacity. Accordingly, they can be provided on that.
We take the next question from the line of Sameer Bhise from JM Financial.
Just one, quickly, wanted the breakup of CA and SA deposits.
We see that the CA and SA. My SA is 31.06%. CA is at 5.78% out of total CASA is at 36.84%.
And how the deposits have behaved post March in your view? If you could provide some details on that.
Sunil?
So Sameer, if you see our presentation, we have given the position till 30 April as well and so how our deposits have been steadily growing. So from March to April, our deposits have grown at 2% plus. And in May, as we speak, it has further grown by another 1.5% to 2%.
And I just wanted to understand from an approach perspective, when we see that almost 78% of the loan portfolio is at the green zone. As of today or rather, say, if lockdown is lifted, say, after May 17, you can immediately start collections, right?
So we are not saying that 98% of our portfolio is in green zone. What we are saying is these businesses that our customers are in, 78% to 80%, close to -- of these customers are in the businesses which are not impacted by lockdown.In terms of red, green, amber bifurcation, as Mr. Ghosh explained, close to 76% of our portfolio is between green and amber.
And they are -- I mean your operations are [ geared ] to restart collections?
Again, you will find I've been talking on that. This is the customer feedback I got from the telephonic conversation. So they are ready to come today also, but because of the lockdown, they cannot move. They are not getting any transport. And our people also cannot go to the field. When the people start to go to the field, then community people will not easily accepted on that, why outside people have come to residence? So that will be the challenge on this part, not the customer point of view. So some customer is coming to the office and giving very small amount, it is not in that way count. But you see that after lockdown opens, there is a need of some time to go to the village to collect on that money. And then that is culturally, whatever has been need to change, there is 2, 3 weeks is needed on that, culturally people also accept, yes, yes, you come. So that is subject to this type of something will come up, then it will start, the collection will be normal.
And just to add, about 79% of our borrowers, those who have the current loan active running, they have an average balance of about INR 3,070 in their saving banks. So this is equal to 4 weeks of installments. So we've not yet adjusted. That's the relationship and the commitment -- and the relationship we have with the customers that they are also not withdrawing. And as per our moratorium provided to them, we've also not adjusted it against the loan till the lockdown is lifted.
Just one final question. Just wanted to know what is the percentage of customers which are unique to Bandhan right now?
So unique to Bandhan is about 50%. Bandhan plus 1 more loan is -- put together is 80%.
Next question is from the line of Aravind Ramakrishnan from HSBC Global Asset Management.
Mine is just more to follow up to the previous one, just trying to understand the restriction on collection, just to reconfirm. So the 100 -- provision for the 100% micro moratorium is largely because you have not been -- typically been able to go and collect those loans. If, for example, lockdown is extended further or especially in the red zone they're operating in, the lockdown does go on for a bit longer, are there any other alternative methods or ways you have thought about collecting if you believe that the ability of the customer is still there to pay?
What we are seeing here is one way to -- at least in the green and the amber zones, is the customer can come to our branch till the things stabilize for a month or 2, they can come to our branch and pay. We have also built up the technology-enabled solutions where through UPI network they can pay. We're also building on that. They can pay to our -- to their loan account. What is also important here is these customers have cash. It is available in their savings bank balances. What we are wanting these customers, we are waiting them to restart their operations before we start collections, right? Otherwise, since we have 79% of the customers having their balances with us, we could have adjusted their balance and taken -- shown it as 80% collection efficiency even for this month. But we want these customers to restart their operations first. We've always been with them. They've always been loyal to us. So we want that relationship to work that way.
So just trying to understand, when you say restart operations versus your other point about having around 80% of your exposure in segments that are not affected, how does that correlate? So what percentage of your customers are actually, I guess, not working or have no sources of income during the lockdown period? So I'm just trying to correlate between those 2 statements when you give a figure of around 80% unaffected by the lockdown versus about a large percentage of your customers are -- have no -- do not have any source of income in this period. Does that tally?
No, if you see that there is an -- I already mentioned some of the point on that. The customers' business is essential goods, and this is the basic need of the people. And they are agriculture and allied 50%; and food and food processing is 20%. So 70% people have the business, which is the people have need every time on that. Consumers have the need of these products every time. So they are not losing their business. What happened is that they cannot come to the office to pay and we cannot reach to them to pay. So that is on the one side challenge on that.So when the lockdown will open and movement will restart, at that time, it will be like easy for us and easy for them to keep this collection on that.And next point is I had also mentioned on that, and they are -- 36% of my borrowers, they are taking a loan to start other business. So that is -- they have the business, they have been starting other business. This type of customer is 36%. So when these people have started other businesses, that means that they have alternative income in their hands. So that is the best way to find out on that, not only the 1 business, they have more than 2 businesses in their hands so that it will be -- the repayment capacity or repayment will not be dependent on one source of income. Sunil, can you add something?
Sir, actually, I got dropped off. I just joined back.
Okay. Okay. Aravind, you got my answer? Or you can like to repeat?
So my understanding is that it's largely -- the restriction on movement is the reason for the moratorium in micro rather than necessarily ability to pay is seen here.
Yes.
We take the next question from the line of Nitin Aggarwal from Motilal Oswal.
Sir, I have a question on affordable housing portfolio. The proportion of moratorium availed there has been quite low, like 87,000 customers have paid their dues. So what is the mix between salaried and self-employed amongst those who have paid their dues? And are you seeing any instances of job losses or salaries not credited? And any color on loss, if you can share, because we tend to get very divergent views on the SMEs and MSMEs and such like borrowers at this level.
Mr. Choksey?
Sure. See, this is -- as you know, we have most of the customers' mandate of direct payment from their bank accounts to our bank accounts. So obviously, some of the payments have already come into our bank accounts. And therefore, based on that proportion, you can see that almost 87% of the April installments were received or credited in our accounts, okay? As more and more awareness is being done, the customers have been asking for the moratorium benefit. Few of the customers have also been asking to refund the payment which directly got credited because of the standing instruction to their bank account. So I think, in course of -- even -- as of today also, we see some of the customers asking for the moratorium benefit. So I think we'll have to see by the end of month of May, exactly how many customers have -- are asking for the moratorium. So that figure will change in the course of time.
Okay. So any color that you would like to share on what sort of losses or delinquencies we can see in this portfolio? And of the 87% that the -- wherein we have got the ECS debited, so what is the mix of salaried and self-employed?
See, on my book, today, I do not have the breakup of specifically in respect of this 87%. However, the composition of our loan assets between the formal sector and the informal sector is approximately -- around 45% is formal sector, salaried people; and around 35% is approximately around self-employed people in our total loan assets.
We take the next question from the line of Nishant Shah from Macquarie.
So could you maybe clarify if in all the green zones where you have about 80% of your AUM, have collections started?
There is -- though it is in the green zone, my staff is not -- can be moved to that villages. Because of the -- socially, the people are feel that outside people, if you enter to the village, you maybe like to carry something on that in the virus. So that's the reason it is not very easy to do that until the village is not coming forward to accept it on that. For that reason, we have not yet started in that way to go to the village. But yes, some of the very nearby area, people know that my office is there. So we are now reaching to them also, very small, but not in a percentage-wise we can be say that. But some customers are coming to the office. They have also started to repay, but which they are not. That movement until it will be not open, though it is in green, that movement is not yet opened on that.
Okay. Perfect. That answers it well. Secondly, you've classified the entirety of affordable housing under the resilient category in one of the slides in your PPT. Could you, perhaps, maybe Choksey sir could probably talk about what the underlying economic activity is for most of those borrowers over there? You've mentioned about 45% are like in the formal sector and the remaining are informal. Could you probably like also comment over there as well? Because there's a lot of like job losses at the -- in the informal and both in the formal segment in the low-income categories. So is it really worth -- or does it really make sense to call all of that affordable housing as resilient? Do you think that there will be some issues in that book? That's the second question.
Let me answer the question, both combined, rather, and I hope it meets with your satisfaction. If you will look at it, our average ticket loan on an incremental basis is around INR 9 lakhs, INR 9.5 lakhs. So the cost of the average cost per property would be around INR 14 lakhs to INR 15 lakhs. On an outstanding loan basis, it could be around INR 8 lakhs to INR 8.6 lakhs average loan. So if -- most of our customers pay -- almost 80% to 85% of the customers have income less than INR 50,000 and [ large ] could be less than INR 35,000 -- around INR 35,000, okay? Even though it is a salaried people or even if they are self-employed or they have small business enterprises, whatever they would be having, okay?So under self-employed, obviously, once the lockdown opens, we will get -- we will come to know as to what exactly is happening with their activity, if their business is affected, not affected. Some of the businesses, obviously, will be affected and there can be stress because of the almost 2 months lockdown situation. As far as the salaried people are concerned, maybe some of the people who are employed with some of the businesses, which were locked up and they were not into the part of the essential services, their salaries also could come under the stress or reduction or -- I think that things will get more clearer once the lockdown gets lifted, people have a chance to meet the borrower and understand each of the scenarios. I think we will get a more clearer picture then.
Fair enough, sir. That's a very clear answer. And one last question on NBFCs, your loans to NBFCs. So for our own microfinance book, we have like these higher vintages, we have some bit of deposits collected, and we are a deposit-funded bank. But then do we have the same kind of comfort for some of these NBFCs as well because they may not be able to collect any deposits, they may not necessarily have access to kind of liquidity. Sure, we've given them some bit of moratorium, but have their other lenders also given them kind of moratoriums? What percentage of their overall borrowings come from Bandhan itself? So like how substantial is that moratorium going to be? Like, how would you think about some of those questions? And like, also about the deposits that they have maintained, do we have a lien on those deposits? Or are they just -- or are these NBFCs free to withdraw those deposits for their own operating expenses? So that's the question on NBFCs.
So we don't have lien on the NBFCs. So these deposits technically are free as to be withdrawn. But to your point, clearly, the way we look at this business, if they have provided moratorium to their customers, it is very logical that they seek moratorium and we provide, right? We derive comfort from the relationship we had, the behavior of these customers, the loan portfolio till date. And we also have a ground level comfort of this business. Our estimate is that microfinance is one business, which should come back strongly. It will be the first industry to come back to normalcy. We don't have an issue of migrant labor, that till the labor comes, the factory cannot start. They don't have the issue of overheads running without production. They don't need to seek permissions to start their operations once the lockdown is lifted. So -- and they are in the essential activity. So our belief is this business, microfinance business, will be the first one to come back to normalcy. And given the fact that RBI and government is working on the packages for NBFCs and NBFC MFI, we think this -- they should stabilize over a period of time.
We take the next question from the line of Mayank Bukrediwala from Franklin Templeton.
It's a data question, something that you have mentioned in the past also, but only if you could repeat it. Could you just give me a sense of your MFI customer breakdown in terms of how many of them are below 1 to 5 loans cycles, how many of them are between 5 to 10 and how many are more than 10 cycles?
So only loan from Bandhan is about 50%. Bandhan plus 1 loan takes that number to 80%. Bandhan plus 2 loans take that number to 94%.
I get that. I was asking from a different perspective as to if you could give me a sense on how many of your customers would be on the fifth loan cycle with you.
Okay. So 54% of our customers are fourth cycle and above.
Okay. Got it. Just one more question. While the lockdown is getting lifted in different parts, there could still be some sort of constraint directly put by the government on group aggregation or letting people -- letting a large group of people come together in one place. So to that extent, if that problem persists for longer, how can the business adapt over a period of time to circumvent that particular issue as in how would you start conducting the group meetings and disbursing or collecting, say, 1, 2 months from now? Because possibly even group aggregation at that point might not be allowed.
Of course, we are -- what we are doing now, since we -- almost 96% of our offices are open, we are connecting with the customers and understanding as to whenever we start the collections, what is the best way they want us to operate these collections? So broadly, there are 3 ways to do it. One is that instead of a 25-member group, we break it into a group of 7 to 8 people, right? Instead of a 1-hour group meeting, at least for next 3 to 6 months, it remains a 20-minute group meeting where only collection happens. And that's one way to look at. The other way is that the group members within themselves deposit their money at one place and our staff goes and collects the money from that place. The third option is they come to our branch and pay or they pay through UPI or Google Pay as the case may be, right?So we are connecting with all the customers and the group to understand which model will suit them and what are they comfortable with. So that's the activity that is currently going on for the last 3 weeks ever since we have started our office, but not the collection in full form. And we believe that it can't be a straight approach across all groups. The important thing is what groups are comfortable with that will help them also and us also to restart the collections effectively.
We take the next question from the line of Prakhar Sharma from Jefferies.
I just had 2 questions. One from a migration standpoint, you did clarify that you don't have a migration risk per se. But do you think there are a select segment of customers who -- these are ladies, but their husbands might be contractual labor or self-employed people in smaller towns, and they might have got affected? So if basically the family income gets affected, do you think there can be an implication on how they look at the debt servicing? So any subjective comments will be very helpful.
So there are 2 factors, I would say, in here. So whatever we are lending on that, we are lending in their existing business, not in the new business, who are the laborers, not like that. And of course, the last time, when we were in the 2009-'09, when the real estate as a business had been very stopped and many of the laborers returned back, at that time we also see that there is no impact has come. But some of the family members, of course, they may be the husbands in other states who are going for seasonal work, maybe the harvesting the paddy and that. So that has been happening in our customers' husbands also because they are opportunistic. We find out on that, that labor cost is very -- labor wage is very high, so they will get that some advantage. They will be not like to do the rickshaw-pulling. In that sense, they are going to deliver on that. So this is happening on that fact. Our advantage is more on that they have existing business, which is running by wife. And in extreme, we find out some cases, husbands return back and up to that they have not returned back again to be laborer or wage earner to the other states. They are continuing their business with wife and extended their business in a bigger way. So that is we find out from the earlier experience on that.
Got it, sir. And second question, sir, would you be able to share what percentage of customers for whom you would have doubled, let's say, the loan limit in the last 12 months?
Doubled means?
In the sense, the average ticket size in the sense somebody who was taking, let's say, INR 50,000 loan as a part of -- a member of a group, but in the last 12 months, they would have, let's say, moved up to a INR 1 lakh of loan limit. Is that a large number where there could have been a substantial increase in the ticket size of individual customers? Or is that a fairly small portion of your customers where that large increase in loan book or loan values could have happened?
If you see that our borrower customers -- who are the borrowers of Bandhan Bank. So our -- our advantage is that their age group in Bandhan is very much high, 4 years and above -- 4 cycles and above up to the 20 cycles of the loan have the borrowers within 52%. And there is a single loan borrower that has increased to 1% single loan only from Bandhan. This people is also very high. And another type of borrowers, which are 31% borrowers who have the other loans along with Bandhan, which is amount is 25,000 to 30,000 number. And Bandhan have the only single loan we are providing others. In that sense, our loan size is a little bit different from others. So in that sense, if you see that last year it was 60,000, this year it has come to that 62,000 number.
Prakhar, in fact, on an outstanding basis, our loan book has remained flat. It has not grown. That's one of the reasons why our growth this year has tapered, right? On a disbursement basis, 60,000 has become 62,000. So to answer your question, I don't think there would be a customer where we would have doubled the loan cycle in 1 year time.
Normally, the loan size is the same.
We take the next question from the line of M.B. Mahesh from Kotak Securities.
Just 3 questions from my side. One is, on the question that you had asked, you had given an indication earlier on the fact that there could be a potential increase in disbursements. Is it possible that you would start disclosing some of this data as to how much of customers have asked for an increase over the next 1 or 2 quarters? Because it will help us to understand how you are kind of looking at the portfolio. And this question also pertains at an industry level as well because when we speak to most MFIs, they seem to be indicating that there's a fair amount of capital which has been used for consumption in the last 1.5 months. So you need to rebuild their capital to restart their business. So just wanted to understand, would we get some color on this one?Also on the corresponding situation, if you can give an update on the Assam portfolio for the MFI business? This is question number one.A question to Mr. Sudhin Choksey. If you could just tell us of your salary segment, how stable is their job profile historically? And if you could also tell us, do they also leverage themselves outside of housing loan?
I have given 1, 2 points on that -- if you -- the first question, I would say that there isn't loss of the capital. These people have not yet lost the capital because there's some of the cause on that. If you see, specifically, if it is in Bengal, if you see, every people have got their free ration, the 20 kg of rice, they gave that free on that. So that is a big advantage on that. And many of them, our central government has given INR 500 per month. So many of the sources, money is coming. So that is the one side. And many people are providing that the 15 days' worth food, someone gave them INR 1,000 per family. I hope that the other -- they are very much cautious their business is running. And then they are also getting these advantage. After all, I have not seen that the large number of customers have been lost their capital. So that is one side. But of course, the business growth will come. Maybe they have need of further capital, liquidity, then it will be like to bank will decide. We are ready to give it, if it is in cash flow is good and their business is running good on that. And I hope that this is a big opportunity which is coming on that. And the next point, in Assam, the situation up to February, you could see that there is a -- sorry, up to the March, if you see that there is portion -- efficiency has increased. And total collection efficiency of the bank has come in March at 98.5%. And other than Assam, it is 99%. And Assam, it has come to the 93.6%. So that is the point on that.
And sir, just one question on this. You got a -- have you got some clarification from the local government that they are unlikely to interfere?
They are not interfering. They are now asking the help to provide support to the affected people. That is now -- very differently they are coming now every day.
And then just to add, Mahesh, the balances -- the deposit balances of these microbanking customers, despite this close to 7 weeks of lockdown, they have remained strong and stable. We've not seen depletion in the deposit balances of these customers. So this clearly says that their cash flow, as of now, is still stable.
See, the problem with that line of argument, which makes it difficult for us sitting outside, is that you are looking at average numbers, right? In this business, where you are talking about the large decile of business, which creates the bulk of the NPL issues, whether it is uniformly spread across the entire set of borrowers or is it kind of spread quite differently across different set of customers. That's why it's hard to look at that 1 data point when we are just looking at average numbers.
Mahesh, if you keep in mind on that, the borrower is human, and even savings are not disclosed to the man. And they know that if it is not known, immediately they would like to give them back. They have very much good resolve on that. And some of the feedback has come from the customer and we call back, and they say that money is with you, don't worry about it. Whenever need on that, I can give that money also. So that is the confidence level has given us.
Perfect. Useful, sir. A question -- the question is for housing part...
Mr. Choksey?
Yes. See, as far as our experience shows in respect of the formal sector of the customers, who are -- whose source of income is salary, I think our experience over the last quite number of years, is that there is -- stability has been pretty good. And we have not experienced, otherwise, any adverse situation, except whenever the natural calamity has affected a set of people or the migrant people. For example, just to share with you, in the time of the earthquake in 2001, we had brokers who were working in the diamond processing at Surat and Vapi, and when earthquake took place, post earthquake, they all had moved out, and there were issues. And it took a little while for them to return back and service their loans. So I think unless and until any situation happens in a group basis, we have not seen otherwise any problem as regards salaried people of the customers are concerned to their obligations.Now this time, the situation is uniquely different. We will have to really see, and I think this will be a new experience for us also, as to how the salaried people -- if they are getting affected, how they are getting affected, whether there are salary cuts, whether they are losing jobs, I think only after dust settles down of this lockdown, we will know.
And your borrowers would have only housing loan? Or are they also leveraged elsewhere?
No, they would have -- obviously, now we can't have that -- I don't have a borrower who has not taken any other loan. Many of them will have a personal loan or a credit card, depends on that. Because at the time of giving a loan, we also take into account some of their other obligations and then we, accordingly, give relatively a smaller loan if that can meet their requirement. So they all will have some kind of loans.
Sorry, and one clarification, does the bank have a product like a top-up loan facility for customers where you can probably leverage the borrower, the revised LTV of the product?
We have the product, but we have not yet started on that.
We'll take the next question from the line of Dhaval Gada from DSP Investment.
Sir, 2 questions. One was a clarification to an earlier response. Did I hear it correctly that 80% of your MFI portfolio is in the green zone? Is that correct?
No. What we are seeing here is in the slide what we are showing is that the 80% of the businesses in which our customers are involved or our borrowers are involved are such that they are resilient to COVID situation.
Understood. And then if you were to just map this -- our MFI portfolio to the government-defined red, green and orange zones, how would that sort of pan out? Like, how much would be in the green zone?
43% is in the green zone and another 30% -- 33% is in the amber zone and about 23%, 24% in the red zone.
This is pan-India MFI portfolio?
Pan-India.
Okay. Understood. And the second question was just in terms of -- I mean I think partly you answered this earlier. But just I know before COVID as well, we were experimenting with this sort of mid-sized loan, which is like INR 3 lakh-plus kind of ticket size. So how are we now looking at that portfolio, the sort of beyond INR 1.5 lakh ticket, the INR 3 lakh ticket kind of portfolio? And do we intend to grow that over the next couple of years? Just some thoughts around that.
There is a good opportunities on that. There have been 2 types, which we have started in that. And we say that the opportunities is good. We have 2 ways. One is that size is increasing; another is the number of customers is increasing. Another type of that, some of the microcredit customers also who are the longtime with us and they have the good business, they are also sometimes shifting to SEL loan. And that will be like a future opportunity for the bank.
Sir, if you were to guesstimate today, what percent of the MFI customer can migrate to this SEL kind of -- if you were to sort of look at the opportunities from our existing pool?
I cannot go on that way, but if I say that out of my total 1 crore-plus borrower in microcredit, and 7 lakh borrower we have that who are in the 10 years and above. So if it is 10% of my total borrowers, what, 10 years and above, they will shift to the individual MSME loan. That is huge, not maybe all, but other people also who are more than 4 cycles, and they are also in that 52% on that. And this 50 lakhs to 52 lakhs, this is the -- 25% of these people are going to there. 10% also going on that to 5%, this is a huge number in MSME segment. They are developing them -- to developing them, to sustain their -- some of the other things should be developed in their income tax return, their trade license and everything will be like to GST, then it will be transferred. It is an opportunity, but it will take some time on that.
So sir, correct me, but do you think 30% of the existing customers can migrate to this product? Is that correct?
Yes. They can go.
So are they -- more than 30% can migrate to this product? That's what the kind of opportunity is?
Yes. That opportunity is there. That can go. But the point is not in 1 year. It will take some time. Yes.
Understood. And sir, just lastly, on -- in terms of this product as well, it will be unsecured. Is that correct?
Yes, you are correct.
We take the next question from the line of Kunal Shah from ICICI Securities.
Yes. Sir, just to clarify, on this Assam portfolio, on INR 690-odd crores of provisioning, there is no spillover of the provisioning from the last quarter with respect to Assam portfolio.
Yes.
So there is no spillover, no?
We have taken a INR 200 crore provision in the last quarter, specifically for Assam. Against that, if you see our presentation, at the end of Feb, we had close to 3% NPA levels in Assam, which is what we had anticipated when we had taken that provision. So what we have done in March is we have written off this pool of this close to INR 198-odd crores against the provision we had taken.
Okay. Okay. And secondly, in terms of the overall requirement, so as Mr. Ghosh has always been highlighting that the borrowers are risk-takers, and increasingly, we were seeing the rising ticket side. But now with sudden disruption, do we see their risk appetite also coming off and -- at least maybe per se for the business requirement, the way they have borrowed earlier, maybe that gets shaken a bit? Maybe in the interim, obviously, there will be some -- I think, given this kind of liquidity, they will need money. But otherwise, do we see actually the overall demand itself coming up because of this disruption?
It's very difficult to say. There will surely be some impact on the demand. But largely, if you see the businesses these customers are in, these are livelihood businesses. So from their end customer point of view, the demand is not -- demand will not be that elastic, right? We will not get so much of impact.And secondly, a lot of these customers, what was their alternative before microfinance started giving loans? These were moneylenders. So there are 2 ways the demand is coming. One is by way of formalizing the economy. They are moving from moneylenders to a formal economy. And two is, their own business is in largely the livelihood business, which will -- the demand and supply won't change materially because of this situation.
Okay. And even this next 3 to 6 months, we highlighted that we would be going ahead with maybe a very low number, say, in the group meetings or, say, one asking to take a deposit. So maybe does it impact in terms of our disbursement ability as well because maybe in terms of assessing the customer, then it becomes really difficult, okay, maybe in terms of 20-minute group meetings or whatever assessment the field staff does, okay? In fact, that gets completely disrupted. So would then maybe we also be tightening our standards at least in the near term?
So what we look at here is that if you look at the growth that last -- the way the model works, 90% of the borrowers for us are repeat borrowers, right? So on an average, these customers are with us for 5 to 6 years. So that understanding of these customers is relatively strong as far as Bandhan is concerned, right? The 10% of the business, which comes from the new customers, which we add typically 18% to 20% of the new customers, that part of the business will slow down, surely, right? Because as you said, it takes time to understand the customer. So the business which comes from the newer customer will slow down for next 6 to 9 months till we are in a position to assess that customer. But for the existing customer, where 90% of our business comes, that I don't think should be a challenge, of course, subject to individual assessments.
Sure. Sure. And lastly, in terms of expansion plans, given this entire situation, how would that be in terms of either adding on to the branches or maybe adding on to the employees going forward? Because I think this quarter, again, there were different additions. So how are these -- is there any moderation out there in terms of the expansion plan?
No, there is no moderation on that. But of course, in the first year, it will be -- because of this corona, it will be very conservative on that -- see that and wait how much would be impacted. And in the long run, if you see that in 5 years or 3 years, we are not seeing that anything we would like to change as per our plan.
But there is no break in terms of adding any further branches or maybe adding on to the employees or something of that sort in the near term. Or is it there?
So we are not able to give that now, but we would like to concentrate more on more business in the existing branch compared to in the open...
We take the next question from the line of Abhishek Murarka from IIFL.
Hello?
Yes?
So a couple of questions. One, will it be possible to collect at all without giving fresh disbursements, given some sort of disruption in the cash flow would have happened? And in that respect, would you also look to increase loan limits for your customers in the next, let's say, 3 to 6 months?The second question is on HL and SME. For the 65% or the 87% of the cases, which have not yet taken moratorium, how many -- what percentage of customers have paid partial EMI? So maybe they've not paid the entire EMI, but they might have paid partially. Would you be able to share that number?
Can you start? I have not listened...
Yes. So to your first question, we have designed a product for COVID-19, which is designed to keep in mind the additional fund requirements for our existing customers. So clearly, this is not a product which will be available for all. It will be based on the assessment and the track record of the customer. So this will only be given to customers who never defaulted even for a single installment without the special approval. So -- which our field officers can give and, of course, subject to their assessment as to whether they feel the customer will be able to -- the cash flow will be able to support it. So there is a product which we have designed. But the only catch is, this loan will be available once they restart their business, right? So we will not be giving this loan till the businesses restart. Once the lockdown is lifted, we see on the ground that the business has restarted, then yes, this product will be offered.
And Sunil, what is the limit of -- let's say, what are the loan limits in this product?
The product's loan limit is depend on, but we see that is maybe INR 5,000 to INR 15,000.
Okay. Okay. And considering -- no, considering that 90% of your customers are anyway repeat borrowers, most of them would probably be eligible for this product. Is that correct to think?
So yes, most of them will be eligible. But again, the assessment for each of them will be required.
Okay. And in the HL and SME, the other part of the question?
So your question on the home loan side was what proportion of the 87% payments that has been received are received full or partial?
Yes. So what percent -- if you can break it up into how -- what percentages have given full and what have given partial.
So to be honest, I don't have that number readily available with me. But to the best of my knowledge, 96%, 97% of these customers would have paid full installments. But I will still confirm that separately with you because I don't have that number ready right here.
Sure. And any breakup you can share for the mortgage book? Any further breakup into affordable housing, LAP or anything?
No, breakup into what would you require?
So the 18,500, if you could break up into LAP and affordable housing?
I think the LAP would be around sub-9%. And -- just a minute, I'll see if I can get you -- I think that would be around 9% to 10%. It may not be more than 10% on a...
9%, sir.
Yes, 9%. And developer portfolio would be sub-4%, so around 4%. Rest all would be housing.
We take the next question from the line of Jai Mundhra from B&K Securities.
Sir, most of the questions have been answered. Just a clarification and a small question. One -- in one of the previous discussions, you mentioned in the green zone, you still have not been able to start collections. Is that correct?
Yes. Correct.
Because the commentary from some of the other MFI players suggests that they have started collection and the business in the select green zone. So just wanted to double-check that.
So what happened and what we feel about it, collection means we cannot reach to the village, and the customer cannot come to the office. That has been one situation. Some situation where customer is very nearby office, they are coming to office and paying their installments. And we started to see that how it can be -- go to -- reach some of the group areas, if the social people are accepted easily or they have created a barrier. There is a need of some time on that for lockdown to open. And also, these people, except our staff will go, that village they have not given that start. So that is the situation now, so that is some of the few areas maybe they are trying to go, but it is very small, not a mentionable amount.
Sure, sir. And second question is just, sir, on pricing, so let's say, if next year, that disbursement, let us say, hypothetically, are lower -- their -- the efficiency in terms of -- you are more conscious. So can -- do you think there is a scope for increasing prices from the MFI book?
See, you can depend on a lot of things on that. So this is not the right time, this month, to say on that. Many things can be like to decide. We say, there is a chance on that there is a couple of more days where the lockdown will be opened and situation will recover on the basis of that. Because the lockdown will be opened this month. It's one situation. If it is in June, there is a different situation. If it is in July, I can be fully run the operations. That may be the scenario differs. So that is a -- long time, it will be like to take a decision. But I do not feel that it will be, across the financial year, with a low growth rate.
We take the next question from the line of Aakash Dattani from HDFC Securities.
Hello?
Hello.
My first question is on the portion of your loans to NBFC MFI where you have not granted a moratorium. So what could be the reason as in either these NBFCs have not approached you or you have declined? Can you sort of delve into that further, please?
They have paid their installments.
Okay. So they've not opted essentially?
Yes.
Okay. And so in terms of your field operations, do most of your field officers reside within the vicinity of the doorstep service center?
So they stay in the doorstep service center. It's a residential model.
Right. But do you mean -- so is there a significant portion out there who would, say, not be staying within that area and would have wanted to go back once -- during this entire crisis to their hometown?
So they had -- a few people who wanted to go, they have gone and they have returned as well as we are restarting.
And lastly, what would be the impact of the standstill classification in terms of -- if you could quantify in terms of basis points on NPAs -- on your GNPAs for the quarter?
So -- if you can please reframe that question. I mean, the lockdown impact will come in the next quarter. So in what sense that this could have impacted this quarter? I mean I could not understand the question actually.
So certain accounts that, say, would have slipped, but have not slipped because the moratorium is offered?
Yes. So that, at a bank level, would have been about 20 to 25 basis points.
We take the next question from the line of Nishant Shah from Macquarie.
Yes. Just 2 quick questions. First, sorry, am I audible?
Yes.
Yes. Sorry, so just one quick question. There was a newspaper article today about, like, RBI working around something related to the holdco structure. Now it's not exactly clear whether it's a complete collapse of the 3-layer structure or a collapse in the 3-layer into the 2-layer. But assuming it is a complete collapse, right, a complete collapse like you can just have 1 single entity doing lending, are you conceptually okay to forgo any future interest in any sort of para-banking activities? Like, because that structure apparently does not allow you to hold any insurance or any other non-lending businesses. So conceptually, are you fine with that? Or would you like to have that optionality -- preserve that optionality and look to bring down the promoter stake some other way? That's question number one.
It will be fine. And in fact, we would prefer that if that happens. That is what we've been requesting.
Okay. Perfect. That answers it well. And second question, regarding TLTRO 2, I think you guys are well positioned to actually go out and participate in that because you can actually go and identify those NBFCs in the smaller segment. So have you participated? If yes, would you be able to quantify to what extent have you participated in TLTRO 2?
So we had participated in TLTRO 2. But since it was the new concept, how does it work? So we had restricted it to about INR 500 crores.
Okay. Fair. And one clarification as regards the green zones. So like, if I understand correctly, there are no travel restrictions or anything, right, in the green zones?
There are -- lockdown is across.
Lockdown is across.
Right. But then because you're a bank structure, wouldn't your collection activity be classified under essential services and, therefore, be allowed under, like, whatever the government permits?
So yes, we come under the essential services. So we can do our activity. But for the -- for our customers, for them to come out of the house and gather at a place, that becomes a challenge. So till the lockdown is lifted, the free movement for our customers is more difficult than for us as a banker.
Okay. Right. Because -- okay, fair enough. I guess gathering would be the issue. Fair enough. That's it for me.
We take the next question from the line of Hemant Patel from Alder Capital.
Just had one question on the collection model. I'm just trying to understand is that when a lending officer currently services collection group of around 15 people, and you mentioned that one of the options is that he would go around and post lockdown, maybe when time is right, start collecting from a group of 7 or 8 people. Wouldn't that actually increase time to actually go and meet these groups? Because if I remember right, there are certain limitations as to how much you can travel and how many groups you can actually go to. So in that case, will we be thinking about increasing the employee base in a significant manner or maybe change the collection model from maybe a weekly to a fortnightly?
No. We would like to continue on that weekly. The first point. Second point on that is you see, the group meeting organized and sitting in the village not maybe happened some couple of months. So that time, there is some pocket we will like to make, maybe one group of 20 women, 20 women maybe 5 different groups. And group means some of the borrowers of house, they will collect it and keep it there, my staff when they go there and give the receipt and taking that money. This is maybe the one way for the temporarily we would like to handle on this situation on that. And sometimes, what's happened, after a few of the weeks, people also accepted it is a way on that and then it will be normalized on this.
Okay. Okay. And I'm taking it from this that we are not planning to actually increase the employee base to focus more on collections. Is that -- would that be right?
Not required on that because the borrowers are mature. They know everything. Sometimes, borrowers are also collecting and coming to the office to return back. That is also many times we've seen that some of the incident happen. So it will be different on the basis of the situation..
And I had a basic question. In a typical joint-lending liability model, I believe that we have moved away from it to a certain extent that if in a group of 15 or 20, if you have 1 or 2 of your borrowers to default, their liability completely rest on them and doesn't go on to the remaining part of the group. Is that right?
No, we are not practicing in this way. We're feeling that the joint liability group means, in our model, the moral responsibility is to collect the money from others, but not essentially compulsorily group will repay on behalf of that borrower. So we see that if this type of practice happens by force, then my good borrower will be left out and go to others because he is penalized. So for that reason from beginning, we are not practicing in that model.
Thank you. Well, ladies and gentlemen, that was the last question for the day. I would now like to hand the conference back to the management for their closing comments. Over to you all.
So thank you, ladies and gentlemen. Thank you for taking out time and -- for this call. Thank you very much. Appreciate it.
Stay safe, all of you.
Thank you very much. On behalf of Bandhan Bank Limited, we conclude today's conference. Thank you all for joining us. You may now disconnect your lines.