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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 Call. [Operator Instructions] Please note that this conference is being recorded.I would now like to hand the conference over to Mr. Hiren Shah, Head of Investor Relations, Bandhan Bank Limited. Thank you, and over to you, sir.
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 and year ending March 2021. We will take this opportunity to update you on the recent developments in the industry and Bandhan Bank during this quarter.To discuss all this in detail, I've got with me, our Founder, Managing Director and CEO, Mr. Chandra Shekhar Ghosh; our Chief Financial Officer, Mr. Sunil Samdani; our EEB Head, Mr. Kumar Ashish; Housing Finance Head, Mr. Suresh Iyer; 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 bank's operational and financial performance along with developments for the quarter ending March 2021. Over to you, sir.
Thank you, Hiren. Good evening to my all friends and investors. I hope you are keeping yourself and your loved ones safe. It is my pleasure to bring you the results of the fourth quarter of the financial year 2021.We are now facing the second wave of pandemic, which is severe than the first wave. But at this time, the learning is there, that this time there are local lockdown, not a national lockdown. We are more matured, more learning from the first wave, and vaccination and mask behavior have been helping us to more protect our lives from the pandemic COVID situation. In these times, I feel that the business and population, in general, have learned to co-exist with pandemic. We have seen good improvement in business parameters.We are -- know that our -- the big of the business is the EEB group. So EEB collection, [indiscernible] very good improvement from the quarter 3 to quarter 4, which is 98.1%. And if I say that customers are paid in EEB, which is 99.6%, and it is the number I have been talking about. It is other than my NPA and written-off customers. But if I come to this, the NPA or written-off customer and who are more than 90 days, 72% of these customers who are more than 90 days in the DPD, they are paying 72% of the paper. That is giving the confidence to the bank because of these EEB customers, when they start the paying, maybe the 1 installment, 2 installment, 3 and 4, they will be future come as a regular customer, and they are not risk for the bank. So in that confidence, we will find out on that the next year '21, '22 will be the best in the bank. 11% of the -- because of our strategy, we are making group loans, we are going to transform to the individual loans. So 11% of the group loans transformed to the individual loans, with collection efficiency about 99%.New customer addition happened in this bank in this financial year, which is very near to pre-COVID situation, which is 88%, and disbursement also has come 95% pre-COVID situation. NPA is declining, is more composed in bank's future growth of the business. Customers are paying. Continuously geographically diversify the book. That helps to give the best comfort to the bank in future.Coming to the specific of the West Bengal and Assam. West Bengal combined uncertainties of second wave and election. We have touched a 98.3% collection efficiency in March, which is, borrower-wise, it is 99% customers are paying. If I go to the Assam, storm has started. Election over. Then we also see that 83% of our customers are paying. Collection efficiency has come 94% in March, and customer paying, other than NPA customer, 98.5%. I feel now very confident with my customer in Assam. The people are looking future to start and restart their business, and that can be helped our business growth and NPA declines.We are -- as a bank, we are not only the financial services, we are good contributor to the society for social activities. We know that this is a very critical moment, is the COVID. This COVID situation, you know we have 11 training centers across the country. We are now 700 beds of these training centers. We have given to the government for use for COVID patients. 400, we have given to the West Bengal government, 100 given to the Assam government per their request. And the balance, we have given to the other states, Chhattisgarh, Maharashtra and others.Government also requested us to supply -- given some of this oxygen concentrator, which is very important in this moment, which is a supply is not that much. The banks -- Bandhan is not only a bank, Bandhan imported 500 oxygen concentrators to give to the government. Specifically, asking by West Bengal government, we are giving 300. And Assam government asking 200, we are giving to the -- 200 to the Assam government.Other than this, West Bengal had [indiscernible] hospital, which has been build up by the British, but not utilized. The government requested us on that, to help for the hospital to active for the COVID patients. We are now setting the infrastructure of 200 beds where people can get the benefit for save their life from the COVID situation.So these are the couple of initiatives we have taken as socially, how we can be of help to the government and the public will be like to get the benefits and recover from the COVID situation. Strong liability base is our issue, continuously improving collection efficiency and high capital base of the bank which helps our future good growth of the balance sheet. And whatever the risk, we feel very conservatively, our book [indiscernible], as a region of -- we have been done in this financial year. So next financial year, only the growth and good quality of the portfolio.Coming to some of the points of the financial information. As usual, the deposit growth has come 36.6% year-on-year. CASA continued at 43.4% and retail deposits 78.8%, and total deposits INR 78,000 crores around.Advance. INR 87,000 crores, which is advance growth has come this pandemic situation, 21.2% year-on-year. Out of that, 59% is EEB loan, which was earlier 61%. You see that in this year, EEB growth has come 26% year-on-year and housing loans have come 8.8%. After the merger, this year has given a very good improvement of the growth in the housing loans.Our total income of the bank, INR 9,672 crores, which is a 22.9% growth year-on-year. And quarter-on-quarter, total income has come dome 3.1%.If I come to the operating profit, INR 6,855 crores. [indiscernible] last year, that means '19, '20, INR 5,446 crores, which is the 25.9% year-on-year growth has come. Coming to the, the provision in this time, we have been -- done some provisions, and it is very conservatively to take all risk to this year so that next year it will not defer on that. So this quarter, we have been taking INR 1,503 crores extra provision, which is now total provisions has come INR 3,810 crores.We also written-off this year, means this quarter, we have been written-off INR 1,929 crores, which is a total written-off INR 2,038 crores. We restructured some loans in housing loan, which is INR 617 crores. We know that housing loans is our affordable housing. Around 50% of this loan is a self-employer. They have requested us to give some of the benefit of the restructure, then they will be very comfort on that. For that reason, bank has decided and given INR 617 crores restructuring for housing loans, but it is not in a risk in the bank.Other than these, in the quarter, we have been revised to INR 534 crores as interest, which we are booked earlier in this quarter or revise on that. All of these together after that, the provision region of restructuring and interest reward, our PAT, profit after tax, has come INR 2,205 crores yearly. And if I come to the quarterly, it is INR 103 crores.Our gross NPA has come in this moment at 6.8%, which was pro forma in third quarter, 7.1%, it has been reduced. Net NPA 3.5%. And our NIM, which now has come in this year, this is 7.8%, which was in the last year, 8.1%. And we are always talked about the NIM, it will be retained on that as a 7.8% to 8% on that.Cost-to-income ratio have been reduced, which is -- last year, it was at 30.8%. This year, it has come 29.1%. Bank has good capital and that a capital adequacy ratio is at 23.46%. So all this is the parameters. I have been pleased to all of you, and I am very much confident on that the banks are performed within this the first pandemic situation is very good. Within all these limitations, and we are also taking a risk as a conservative way in this year. For that reason, on the basis of that, the next financial year '21, '22, we had a quick confidence on that with my team will be performed as a normal before the following situation.Thank you to all of you.
[Operator Instructions] The first question is from the line of Mahrukh Adajania from Elara Capital.
Sir, my first question is that there are standard provisions of INR 3.9 billion. Sir, all those mandatory RBI provisions, the provisions of 15 to 40 basis points that RBI wants banks to maintain, or are these over and above those provisions?
These INR 3.9 billion provisions are over and above the standard asset provision as required by RBI.
Okay. And most banks have not digged into their contingency provisions. So we had around 27 billion of COVID provisions in the third quarter and 31 billion of total standard provisions. And now it's come down to 3.9. So why would you -- and most banks have not digged into their provisions and even NBFCs have maintained the management overlay provisions. So why did we take our decision to dig into our standard provisions?
See, we had taken a big write-off this quarter, right, which most banks have not. We have taken this accelerated write-down, and that's one big reason why we see a dip in the provisioning or the buffer that we had, right? At some point of time, one has to take that call when to do that. So we did it immediately so that we wanted things to be more stable going forward.
Got it. And of that INR 19.3 billion, how much would be Assam and how much would be West Bengal?
So Assam is INR 772 crores, and West Bengal is INR 671 crores.
Okay. And the rest is spread across states?
Across states.
Nothing major apart from these two?
Yes.
And is it possible to get the slippage figure and also -- for fourth quarter, excluding the pro forma slippages, so the slippages related only to Q4?
So if you look at our DPD position, they have actually improved. If you look at the overall overdue positioning, right? Our DPD has actually improved by INR 2,300 crores, even if I include the write-off number. If I take the benefit of write-off, then the overdue amount has improved by almost INR 4,300 crores.
Correct. Correct. Sir, would you be able to share the gross slippage figure, the amount that [indiscernible] slipped into fourth quarter gross?
Just a second. We will come back to you on your gross slippages number. We have it on a statutory basis. It means the NPA has classified versus NPA classified now. But that actually is the statutory slippages, that does not give the clear picture. One has to look at the pro forma 90-plus as on December and then see what it was as of March. So during the call, we'll come back with that number.
The next question is from the line of Saurabh from JPMorgan.
Sir, 2 questions. So one is on the provisioning. So we have INR 2,900 crores of specific provisions, INR 1,900 crore is the write-off and another INR 390 crore is a standard overall. So basically, 50 to 100 is what you have provided for this entire dynamic. That will be a correct assessment, sir?
Yes. The total provisioning that we have done during the quarter, INR 1,503 crores. INR 159 crores including the [ M2M ] that is for Q4, and for the full year, it is INR 3,907 crores.
No, sir. So for the entire pandemic, including what you took last year. So I'm just looking at the specific figures. INR 2,919 crores is a write-off and INR 400 crores is the standard, right? So the pandemic provision is about INR 3,200 crores, right?
Yes, roughly thereabout.
Okay, sir. And Mr. Ghosh, sir, this INR 1,900 crore write-off, sir, I mean in Bandhan's history, I don't think you've ever taken these kind of write-offs. So how do you think about the underwriting in the MFI portfolio?
I feel that this is a very good write-off we have been done. Now the portfolio quality is good. And I'm not feeling that anything further will become of that.
And sir -- and this write-off, it's not the outcome of poor underwriting. This write-off is the outcome of the general environment, right? Pandemic, we have never seen in the last 100 years, right? And coupled with that, we had state-specific issues like Assam, right, where we had to deal with the moratorium. We have to deal with the bill. We have to deal with loan waivers. Elections in our key states like Assam and West Bengal.So clearly, in last 2 years, as far as Bandhan is concerned, never in our history we had to pay so much of environmental issues at one go, right? So we don't see underwriting here is a challenge. It's more of an environment and as this dust -- as the dust settles down, with all of this now going back, we think the same set of standards, things should start improving going forward.
And my point on that, underwriting, we are very keen on that to assess the quality of customer's business. But in this COVID situation, you know that some of the areas which have small manufacturing units, there is -- the demand is not coming from the nearest state. So that -- they are disturbed on that, and these type of people are coming to this write-off now. So this is for specific COVID situation and also some part of this due to the Assam situation. It is not the normal situation and the write-off issue -- underwriting issue, for that region, we are making this the written off.
Sir, and one final question on Assam, sir. I mean now that the elections are over, what -- how are you seeing the situation there? And given that your competition is also kind of, I think, fully exited the market?
No. If you see that the election is over, government is now going to form, and I hope that the customer also understand about it. They have to need the money to run their business. So that gradually, customer also coming, return back to the normal.So we said that 83% of the customers paying to us. If you remove the NPA customer, that is a 98.5% customer paying us, even in these circumstances. I hope that each quarter and next quarter, it will come to the very normal position.
And if you have to see the positive from this, clearly, we used to be the single lender for most part of our life that we worked in Assam. We've seen competition coming in and that kind of disturbed the equation. Now with this challenge, we have seen competition retreating also. So as things stabilize, we see Assam will again be a big opportunity for us. But yes, it's a -- we can't time it today, whether it takes 3 months, 6 months or a year, but going forward, we see this as an opportunity.
We already listened from the customer point of view. Customer has expressed to the people and us also. Sir, I can be like to stop the repayment. And maybe the government will repay on that, but they cannot get the loan. But I have need the loan for business, and I need to come to you to take the loan. Why I'd like to make a red alert to my account if that's not any good? So [indiscernible]. That has been very good hope of that future. The business growth will come.
The next question is from the line of Nitin Aggarwal from Motilal Oswal Securities.
I hope you and all your colleagues are keeping safe in these challenging times. A few questions. Firstly, good to see the progress that you are making on the asset quality front in such a difficult environment. But from the collection efficiency and the repayment rate chart, like 4% of the customers are part-paying. However, the SME book now stands a little higher than 8%. So does this indicate that customers with higher ticket sizes are delaying the payments and, therefore, showing more vulnerability? Any color on this? And what is the vintage of these SME customers like?
No. I don't think that's actually the case. There is no clear preference in terms of vintage that we can see in our portfolio that the high vintage is doing better or low vintage is doing better or a high ticket size is doing better or low ticket size. But one thing we can surely see, certain businesses are clearly seeing the spread, right? Whether it's the beauty parlor business or it's saree manufacturing or the zari works in pockets of Bengal. Those locations and those pockets, we are seeing some [ regular threats]. And that's where we see the NPAs and the nonpaying customers.If I mention on that, we are transforming to the group -- from the group loan to the individual loan. So individual loans, which is called the Samriddhi loan, 99-plus percentage of the repayment, which are high vintage of the customer.Second point I'd like to mention is March. 92% of our customers are paid in a full installment to us, 3% customer meets 1 installment instead of 4 installments. And only less than 1% of the borrowers are not paying any installments. In that sense, if I say that, 50% of my borrowers, we need to give them more than 2 years, and there are high vintage in that areas, so they are not like to come in this analysis. They are coming to this more default and more NPA.
Sure, sir. And secondly, for this year, we guided for a 5% credit cost, and we have some like around about that number for FY '21. So any outlook if you can give for FY '22 on this front?
We would want to refrain from giving the credit cost guidance for the FY '22, but we can surely say that we have taken an accelerated provision and accelerated write-off. It should help us reducing our credit cost going forward. We are facing the COVID 2 situation. If things improve over the next 2 months' time, then we are very confident of keeping this cost materially below the current level.But at this time, we would want to refrain. Probably in a month or 2 where things become more clear on the COVID 2 wave, we should be in a position. But as a strategy, what -- and as a policy now, given our learnings of last 2 years, what we are saying is, we'll continue to make provisions irrespective whether there is a risk or no risk. We want to build certain buffers because that's -- last 2 years have been a good learning for us. And for times like this, we want to have certain buffers in our balance sheet.
Sir, and -- Sunil, like we have talked about the collection efficiency trends in March. If you can share some color as to how that has been in April, and what sort of potential restructurings we will look forward to in the micro banking segment now that the RBI has opened up the window again? In the past, we have not used it, but do you think that we will now be open to this restructuring?
So far, we've not done any restructuring, and I don't think there is any reason for us to change our mind there. So we'll continue to believe that restructuring is the last option for this segment of customers.And on the April collection efficiency side, there, we have seen a reduction of about 3% to 4% in the April collection efficiency like-for-like basis, whichever way we look at, including NPAs and write-off or excluding NPAs and write-offs.
I just want to mention on that, West Bengal is less than 3%.
Okay. Okay, sir. And lastly, if I can just ask one more, I have a clarification to ask for. Like last quarter, we reported a very large SME book at around 16%, 17%, which has now almost halved. So just want to know if there is any one-time NPA in the reported NPA, which as of now is not actually 90 DPD on outstanding basis?
Sorry, can you repeat the question? We could not get that.
Yes. It's slightly complicated. So what I'm trying to ask, like last quarter, we reported 16%, 17% SMA accounts, and -- because we were reporting all on pro forma basis. Now as we've reported in March, the real numbers and followed the IRAC, so has there been any accounts in the NPA bucket which are not actually 90 DPD, which probably crossed 90 DPD in the prior months, and then they came down because of the repayments, because our repayment rates are quite good as we see. So are there accounts in the outstanding GNPAs, which are not 90 plus?
So there is an account because as I said, as for IRAC norms, once the account crosses 90, it continues to remain in NPA till it becomes 0 DPD. There is about INR 400-odd crores in the 4,000 -- in the INR 5,700-odd crores NPA -- total NPA that we have, where the DPDs will be less than 90 in certain periods.
The next question is from the line of Shagun Verma from Goldman Sachs.
Yes. Sir, and your colleagues, I hope everybody is staying safe. Actually, a couple of questions. First, to start with -- again, coming back to this provisioning policy. Now that we've utilized whatever cover that we were holding till last quarter. While Sunil, I appreciate the comments that you made, but what exactly would be the strategy going forward?Have we changed the policy with regards to microfinance loans wherein earlier you used to take extra provisioning? Could you accelerate that extra provisioning that you used to take? Or how should we think about it? Because clearly, the volatility has increased, the environment has become dynamic. So I guess one would want to keep extra provisions on the balance sheet. So any thoughts that you can share?
So see, I would not want to quantify that number today. But as I mentioned, directionally, we would want to keep some buffers in the balance sheet and we would want to build every year, right, irrespective whether there is a risk or no risk in the environment. So when there is a risk in the environment, to that extent, it will get utilized. So on the whole, we want to keep some buffers in the balance sheet. That quantification, I may not be able to do it at this stage.But what is also important here to understand is, how to read the NPAs of our bank, particularly in the micro banking segment, right? Of the total INR 4,500-odd crore NPA that we showed today in micro banking, about 78% of the customers have paid some installments in March, right? And as high as 5%, 6% have paid their full installments in the month of March. And so clearly, the idea here is to understand why these accounts are in NPA, and how to read the risk into those accounts, right?We've tried to analyze our risk in our presentation. If you get a chance, you can go through that slide. Essentially, what we are saying is even in the NPA bucket, we have 78% customers who are paying us. And the proportion of paying small amount, which is up to 25%, is also relatively small than the proportion of paying more than 25%. So the point is, this NPA is largely a timing difference. At some point of time, they may take 3 months, 6 months more, but there will be a write-back in these customers.Having said that, as I mentioned earlier, there could be some challenges or the other. That's what our learning is for the last 2 years, and accordingly, we would strengthen our balance sheet more than what we had provided earlier and this is a normal scenario.
That makes sense, Sunil. The other question is related to this, on Slide 8. So these portfolios is, of course, ex of write-off, if I am not wrong. Is that a correct way of reading it?
Yes.
Okay. And similarly, Slide 7, the bucket movement, again, what is the denominator here? Are these denominators ex of write-offs and NPAs? Or this is the overall portfolio? 90 days at NPA.
Ex of write-off, but include NPA.
Ex of write-off and include NPA?
Yes.
Got it. Just another question on the environment at the ground level right now. So clearly, I mean, what we read in the media, et cetera, that transportation has again come to, let's say, standstill or maybe partially operating, which we understood from you all that last time around in the third quarter or maybe in the second quarter, that was one of the reasons for a delayed recovery or improvement in collection efficiencies. So how do you see, let's say, over the next 2 months, of course, given what information we have at this point of time, the full transportation kind of coming to halt, et cetera, is going to impact the collection efficiencies?
If you see that the -- I'm Chandra Shekhar speaking now. And if you see the last time you see that, there isn't -- train is not moving. And there is a lot of small producers cannot sell their products [indiscernible]. But when the train has started, that time, we saw that the people produced goods are selling to them, not only the state, there is a neighbor states also purchased from them. And these neighbor states in that time also, there is no free movement to the state in Bengal. One cause is there.There is many of the states, they have needs to come with COVID test. If COVID test is not negative, they will not come on that. So this situation, if whatever now stops the train, similar thing is there, there is no change on that. If I say that before May, the people are not able to come, but the train is open. Now train is not open, but still now the same thing on that, the people are not coming from the other states. And these people cannot be [indiscernible]. So whatever we are taking this risk in the last March or April, and the train open, the same risk is there, but risk will not increase because of the train stop.
Okay. So basically, the risk has not changed or rather not gone out, and therefore, it's always reflected in the portfolio. Is that the right way of looking at it?
Yes. Correct.
Okay. Just one more question on this write-off of INR 1,900 crores. What does it mean in terms of number of customers?
About 410,612.
INR 410,000 crores -- sorry, 410,000 customers. Got it.
410,000.
The next question is from the line of Nishant Shah from Macquarie.
Yes. So first off, I appreciate the detailed disclosures, very much helpful. But here in, I have a couple of questions/feedback. So in 2Q, I think you had told us that you are not really looking to do any kind of ECLGS or any kind of government-guaranteed top ups? But in 3Q now, in this PPT, you have disclosed that you've done about INR 1,800 crores worth of disbursements of ECLGS in 3Q itself. So ideally, this should have been communicated in 3Q, right? So why was that not chosen to be done?And just like a question now related to that. Second, what is the cumulative amount of ECLGS disbursements that we have done now so far, including 3Q and 4Q? And if you could split that up by state, that would be helpful. Yes. So that's the first question.
Yes. So as far as the ECLGS loan goes, that was done only in third quarter, not in the second quarter. And that was done at the request of customers and government was also pushing these loans to be given to the small borrowers whose businesses are getting impacted because of COVID. And accordingly, we had taken the decision to give ECLGS loan in Q3. Now that we have given ECLGS loan once, we have not given any further ECLGS loans in Q4.
Okay. No. so -- No. So like there is a government filing which shows about INR 2,300 crores of cumulative total ECLGS. So what would be that difference amount? Is it -- this is as of January, that is. So the difference between INR 2,300 crores and INR 1,800 crores, what does that mean? Is that new ECLGS done in 4Q? Or is it just non-EEB ECLGS kind of loans?
We have done ECLGS only in Q3. And in Q3, about INR 1,850 crores was in EEB vertical, and then there was about INR 100 crores in the small enterprise loan vertical.
Okay. And there is absolutely no other ECLGS disbursements apart from this?
Nothing.
Okay. Perfect. And could you give the split between like West Bengal, Assam and rest of India of this in terms of, say, number of customers or value of disbursements?
So about 53% of the ECLGS loans went to West Bengal customers and about 20% of this went to Assam customers.
Okay. No, but what would it be as a percentage of the total customers that you have? So for example, if you have, say, 100 customers in Assam, what percentage of those customers would have received ECLGS? And similarly, for West Bengal?
So see, 53% -- ECLGS total is about INR 1,900 crores, which is roughly -- if I have to take it as a percentage of my total book. I can give you the number of accounts, where I've given the ECLGS. In West Bengal, it is 814,000, and in Assam, it is 364,000.
3 lakh -- sorry, could you repeat that?
364,265.
Okay. Perfect. And -- so there is almost like 500,000 increase in the number of loan accounts in 3Q in Assam. What explains the balance kind of account addition? This would be, I'm assuming, ex of new customer addition?
So some will be the new customer addition. I'm not too sure about 5 lakh increase. I'm not sure because my data doesn't show that there is an increase of 5 lakh customers in Assam.
No, 5 lakh loan accounts -- loan accounts. So could be like top-ups included, which is what I'm asking?
Top-up has been -- after September quarter, there is hardly any top-up.
The next question is from the line of Sameer Bhise from JM Financial.
Just wanted to get a breakup of other income for the quarter, and PSLC fees, trading gains.
So INR 787 crores of other income, the maximum contribution has come from PSLC of INR 324 crores. The disbursement has increased accordingly. The processing fees have increased to INR 297 crores. The third largest contributor is the third-party income, now that we have started distributing insurance products. So INR 82 crores have come as income from the distribution of third party. So these 3 are the top 3 items.
Okay. Secondly, can you just highlight the NPL movement between slippages, write-offs you have told, but recoveries and slippages?
If you take the pro forma number of INR 5,515 crores as of December, the additional slippage -- someone else also asked this question at the beginning of the call. So if they are listening, this is for them as well, we just got this number on the basis of pro forma. So the opening was INR 5,515 crores, the additions was [ INR 2,195 crores ], recoveries and upgrades was INR 23 crores, and INR 1,929 crores was written-off.
The next question is from the line of M.B. Mahesh from Kotak Securities.
I just had the same question. Can you just kind of repeat that movement of NPLs for the quarter and for the full year as well?
So for the quarter, it started with INR 5,515 crores. I'm talking about pro forma 90-plus. Additions was INR 2,197 crores, recoveries was INR 23 crores and written-off was INR 1,929 crores.
Okay. And for full year slippages?
For the full year, INR 993 crores was the opening balances. The full year slippages was INR 6,887 crores. About INR 100 crores was the recoveries and upgrades, and written-off INR 2,038 crores, that comes to the closing number of INR 5,75 crores.
Perfect. Just one question. If I just kind of back calculate this number. The -- if you [indiscernible] INR 4,500 crores, should I -- are we looking at something like a 4%, 4.5% kind of a gross NPA in the rest of the portfolio?
In the?
Rest of the portfolio is housing, the SME and the others. Is that right?
Around that, we'll just come back with the exact numbers on that percentage.
And also just a clarification to your earlier speech, can answer this. Sunil, last quarter, the collection efficiency seem to be kind of pulling up for 12 and the quarter even before that. Yet we saw a restructured book of about 3%. And again, coming back to the question if the gross NPAs is about a little over 4%. Where are -- what are we missing in these numbers out there because the housing dominates the rest of the book -- in the -- outside the NFI?
No. See, here in the other segments, one large chunk is ILFS, which is still not written off. This is about INR 400 crores. And with respect to the housing book, the restructuring that we have done is largely to the early delinquency standard customers. These are self-employed customers. And for them, housing loan is the cheapest rate loan, right? So if they have to take a moratorium or a restructuring, it will ultimately increase their cost because there is interest on interest. For them, it makes sense to use this route to manage their cash flow, right?Suresh is on the call. Suresh can highlight whether this understanding is right?
Yes. Thanks, Sunil. Yes, actually, the morat or the restructuring that has been done is you're right, it is in respect of the old portfolio also. And these are all regular customers, wherein even in the restructured portfolio also, in fact, we've had some collections. So it is not that customers have not been paying, and many of them have requested -- some of them have requested for the restructuring at a very, very fag end after having made the payment because looking at the situation, the prolonged COVID position is also resulting some of them having a think on -- rethink on whether to pay their EMIs and improve their cash flows.So if you actually look at it, there are a lot of customers who have opted for restructuring, but have also been paid. So that's the reason why if you look at it, in fact, the number of customers who have not paid a single penny and having availed the restructuring and not paid a single penny is very, very small. It about 1% or something only.
Just one clarification, Mr. Iyer or Mr. Sunil, What is the NPL in the housing loan segment?
Suresh?
Yes, Sunil, go ahead.
In percentage terms, the NPL is 3%.
The next question is from the line of Adarsh Parasrampuria from CLSA.
Hope you're all keeping well. Question is on Slide 7. You do show the buckets going down. But honestly, if I look at plus-30 days, which is 30 to 60, 60 to 90 and 90 days and add back the INR 1,900 crore, INR 2,000 crore write-off that we've done, I think we've got a fairly sticky problematic book, right? Like if I just try to -- and the base of loans in micro finance has grown by 8%, 10% in this quarter. So honestly, I think I get a INR 9,000 crore, INR 9,500 crore book, which was either plus-30 days or NPA are written-off until last quarter. And that same number stays now. And we've had very strong collections as you report for the last at least 4, 5 months. So it seems that there is no material change in bucket. There is just that the basis change, accounts have migrated and then some have been written-off. Rest of INR 9,000 crore problematic book remains problematic. So if you can just explain what the numbers are.
Adarsh, see, if we look at the absolute amount and not the percentage, which will take away that -- whether it's a big effect or a percentage effect, right? In absolute amount, even if I take back the written-off amount of close to INR 1,900 crores, INR 2,000 crores, my overdue portfolio has improved by INR 2,200 crores on the same like-to-like basis.
Yes. Sunil, I would imagine...
And after write-off, it has improved by about INR 4,200 crores, INR 4,300 crores.
Yes. Sunil, I would guess that a lot of it is 8 to 30 days, which may have been relevant in December because morat ended in August. So there was few weeks and that 8 to 30 is also representation [Technical Difficulty] But if I move to March, I would say that accounts were only 8 to 30 days due are relatively all right, right? But the rest of the book, I think is -- if you remove 8 to 30, I think you'll almost have no change in the key problematic book. Correct me if I'm wrong. That INR 2,000 crore fall...
There has been improvement across all buckets. Yes, there has been a flow from 60 to 90, but there has been a rollback as well. And if you look at the absolute number, as I said, it is about INR 2,300 crores. And this INR 2,300 crores is not only 8 to 30-day bucket, it also includes customers from 31 to 60 and 61 to 90. There have been instances where even 60-plus customers today are 0 DPD.
Got it. And second thing is, given the nature of the business and given where we are in the cycle, I just thought that -- look at it this way that we are 50% covered on NPS. We still have 5% 30 to 90-day, and we are heading into April where collections dip by about 4%, 5%. So what restricted us from doing more provisions, right? Like what -- why would you -- and it's a high charge-off business, right? You yourself have charged-off INR 2,000 crore this year. So it seems that we are not getting into wave 2 with a strong balance sheet, honestly. I think that's the honest feedback I would have because we are 50% covered on cash. We have a fairly material 30 to 90-day, and collections have dipped in April.
No, I would look at it differently, Adarsh. We don't say that this is a high charge-off business. That has been the case only during pandemic time, and we had specific issues in a particular state, right? These expenses come once in 100 years. History does not suggest that it's a high write-off or high size off, charge-off system, right?Now coming to the DPD buckets, right? One has to look at microfinance differently from other businesses. Here, the customer intent is very important than the ability. I mean ability is of course there, right? If a customer is paying part installments because these are the customers who are at the bottom of the pyramid. They get impacted first, and they recover also first, right? So if they pay part installment, I would not read that there is a loss even before. When I today show INR 4,500 crores, there is NPA of microfinance. I am not saying this is -- this will be my LGD for microfinance.Otherwise, 78% of customers in 90 DPD should not pay me in the month of March, right? I have tried to explain the risk. The way we see it, in the NPA and the delinquent bucket, right, customers not paying. And even if I include customers paying up to 25% of their scheduled installments, still my provision is equal to 90% of that risk. So if the customer is paying me on an average 70% in a part payment customer, I would not call it as a risky customer, and I'm tallying a huge risk in the balance sheet going forward. I have to classify them as an overdue customer, whether 30, 60, 90 or 190-plus because that's the regulatory way of looking at DPD and risk. But honestly, that does not translate into the LGD.
And my last...
Scenario where across all buckets, if I take nonpaying customers and I take customers paying less than 25% of their scheduled installments for a month, still I am fully covered. And for the customer who's paying 50% of the installment, it's difficult to assume that their intention is to default and not pay.
Got it, Sunil. And my last question is, can you just explain the interest reversal of INR 500 crore in this quarter? On what part of the book was it and reflects upon your accounting policy for that, please?
So we've always been saying that we are -- we continue to accrue interest on account of customers which are not classified as NPAs in line with the IRAC norm. We had disclosed this number last quarter as well, which was close to INR 400 crores. This quarter, since this judgment came at the fag end, almost on 31st March, the overall number was INR 525 crores. So this is the recognition, the unreceived interest accrued, but not received interest on the NPA portfolio. And since we have classified NPA after the gap of 12 months, this amount is large. But I would say, this is a onetime because now that the NPA recognition has started, we will not see these chunky reversals.
Next question is from the line of S. Parameswaran from Jefferies.
I have a couple of questions. Sir, firstly, on the ECLGS portion. So you have INR 330 crore sitting in the NPA bucket. So I wanted to understand if that is just the ECLGS facility or the entire borrowing of the borrower is concerned? Because you've only -- in 3Q, you had given out INR 1,870 crores. So compared to that, it seems a relatively higher percentage. So that's my first question. I'll come back.
Yes. So see, ECLGS is always given to an existing customer, right? So if the primary account of the customer becomes NPA, I have to classify the other account also as NPA. And hence, ECLGS portion of the total NPA customer is at INR 333 crores. So this is not the overdue amount, this is the entire disbursement under ECLGS.
Okay. Got that, sir. So I have a follow-up. Basically, another on the active borrowers. So that is up sharply quarter-on-quarter. So the first slide in the deck says that it's up by -- the number of customers is up by 0.5 million. But if I look at the active borrowers, it's up by 1 million. Any particular reason to that?
Which number?
So this is Slide 14.
Right. Slide 14, okay. Right.
Yes. So the active borrowers quarter-on-quarter is up by 1 million.
Yes.
And the first slide in the deck says, you added 0.5 million.
These are the...
Last year, customer is in 11 million, this has come 12 million, 1 million has been increase.
So yes, that the way to look at, it's a good observation. See, I may have a customer who will not have an active loan, right? We have a deposit because they had a loan at some point of time, they have repaid their loan. Currently, they don't have an active loan, but it's still our customer because they have a deposit account. In this quarter, they have taken the loans, and hence, the borrower count has decreased, but the customer count remains same, as I've already factored in, as I have a deposit account with them. This is a trend of micro credit and it will always happen on that as sometime the customer be a teenager. You see that the customer is pregnant, are not come to take the loan [Technical Difficulty].
I'm sorry, sir, I can't make out what you're saying.
It's a trend of micro credit loan. That customer is or some times to take a leisure. They are having that account, they are taking the leisure for pregnant and they are not coming to take the loan. When the baby is born, after that, will come forward after 6 months or 9 months, even 1 year, they come to take the loan, but account is remain in there. For that reason, sometimes it is happening on that. And sometimes, it is also seasonal. And the business season is coming, they are taking the loan. But when loan is closed, they haven't taken the time free, not taken the loan.
The first 2 quarters, we were a little conservative in disbursement and as things started improving in the last 2 quarters, the disbursements also picked up.
Got it. Got it. If I could squeeze in one last question. Your coverage currently is at 50%. Where do you see that going over the next year? If you have any particular target in mind?
So pre-technical write-off, it was about 54%. Post write-off, it has come down to 50%. If I take the additional standard asset provisioning that I carry in my balance sheet, it is about 57%. Yes, ideally, we would keep building, as I said, and we would keep taking additional provisions. And not only if there is a risk in the environment, but also otherwise because that's our learning of the last 2 years. So clearly, this number will go up, whether we take additional standard asset provisioning or NPA provisioning, combined coverage will surely go up.
The next question is from the line of Seshadri Sen from Alchemy Capital.
Hope all of you are safe and all Bandhan employees and their families are safe in these really difficult times. A couple of questions I have. One is on the housing segment growth. One is that while other housing finance companies have shown fairly strong momentum, your growth seems to be a bit tepid also. If I analyze the numbers that you've disclosed in the presentation, there seems to have been a rather large, about 5% of the good book got paid down, if I analyze the disbursements versus the change in the book. So was there a sell-down? Is that because of provisioning? If you could throw some light on that. And overall, in FY '22, what is the outlook for growth once things normalize? Do you hope to catch up with the rest of the industry because the growth seems to be tepid compared to even adjusting for the fact that you are more focused on affordable housing.
Suresh, you would want to take that?
Yes. Seshadri, so the thing is, I wouldn't say, the repayment -- I didn't get your question exactly what you're asking on the -- in terms of the reconciliation of the loan book because...
Yes, meaning, if you look at the slide where you disclosed disbursements and loan books. I think that's Slide 15, right? You started with a book of INR 19,700 crores. You've ended with INR 20,200 crores. You disbursed INR 1,400 crores. That is a INR 950-odd crore -- sorry, INR 950-odd crore repayments in 1 quarter. If you annualize that, that's about 20%. HDFC, a couple of days ago, was saying their long-term average is 11%. So unless I'm missing a number, the number seems to be a little high.
No. See, on an average, we have been getting about prepayments of about INR 150 crores. So if you look at the analysis in the opening book and the closing book, so we have done -- we started the loan book with INR 18,580 crores, added INR 3,668 crores, I mean that's it, and the closing figure is INR 20,200 crores. So that's about INR 2,000 crores, which is in line the prepayment and the natural amortization which happens. So about INR 150 crores on an average. This year, of course, the prepayment has been higher -- I mean, sorry, lower. Otherwise, it used to be around INR 200 crores per month would be the prepayment which should happen. So if you look at it from this...
Understood. Suresh, I'm not talking about the quarterly numbers. If you see INR 197 billion going to INR 202 billion as against disbursements in the quarter of INR 14 billion. Is the INR 14 billion is the annual disbursement or the quarterly disbursement?
Quarterly disbursement.
Quarterly. So if you see INR 197 billion going to INR 202 billion, that's a INR 5 billion delta in your book, and you had a INR 14 billion disbursement, which means that INR 9 billion repayment roughly on a INR 197 billion book. You can double check and get back to me later, that's also fine.
No, the...
The quarterly numbers is what I'm focusing on. It appears to be high. I'm not sure whether you have a seasonality in your repayment, maybe that is the case.
No, no, there is the seasonality is not as much in the -- in this book, but it's only in the construction finance book, where there is -- so there is not much of this thing. INR 150 crores to INR 160 crores, if you look at it, so in a quarter also, it's about INR 500 crores -- INR 450 crores to INR 500 crores anyway is the prepayment that comes plus the amortization which happens. So that's the main thing. Plus, obviously, there would -- because of the -- so basically, that's the kind of thing. So -- but still, we'll check back on the figures and come back to you.
Sure. And the outlook for FY '22, and why you're sort of lagging behind the industry a little bit?
Yes. Sure. See, if -- again, if you look at the quarterly disbursement, you look at the disbursement of the Q4 and Q3. And there, you would see that a sizable chunk or I would say, the majority of the disbursements have happened in the second half of the year only. And if you just look at the disbursement growth in terms of the second half vis-à-vis the second half of the previous financial year, you will see that the growth has been good. It's only that the first half of the year where disbursements were quite low, and that has affected the overall growth and the rundown on the book has been a little on the higher side in the first half. So that's why we almost had -- just a flat 1% growth or somewhat in the outstanding loan book as of the end of the first half. So if you look at the disbursement in the second half, there has been a good growth, and we are fairly confident that going forward, the geographical expansion plus the way the markets are doing in terms of affordable housing, we are definitely hopeful that the business will pick up.
Understood. The second question to Mr. Ghosh and the team is on your deposit strategy. You're doing great in terms of a deposit acquisition, if I calculate the number of customers on the savings side, that also seems to have been very impressive in the fourth quarter. But your pricing is still quite aggressive. If I understand correctly, you're paying 6% above all INR 1 lakh deposits, which is higher than your peak fixed deposit rates. So anybody above INR 1 lakh essentially won't take a fixed deposit with you and will put a savings account, and -- which is why your accretion to savings is actually higher than your accretion to fixed deposits. When will you start adjusting this pricing? Because your balance sheet seems to be very liquid. You're doing very well.I know some of your peers are following this aggressive pricing. So maybe the market is moving that way, but you have a much more solid base than some of those peers. So would you look to adjust that 6% pricing at some stage because right now, it appears that you are attracting a lot of proxy FDs into the book. I don't know the exact percentage of deposits that are above INR 1 lakh, and your average balances did come down, but just the pricing seems to be a little skewed at this point.
So you are right. We have already taken steps in that direction. Last quarter, we reduced our minimum saving balance rate from 4% to 3%. And it's a matter of time when our 6% rate will also come down.
And what is your average cost of savings deposit rates, if you could share that?
Sir, does that answer your question?
5.15%.
I'm waiting for a response.
5.15%.
[Operator Instructions] The next question is from the line of Kunal Shah from ICICI Securities.
Hope all are safe and well. So firstly, in terms of the DPD pool, the way we had given some breakup in terms of the part paying and the nonpaying, and especially wherein the payment has not been up to 50-odd percent, how would that be in 31 to 60 and 61 to 90-day bucket, particularly for the Assam and West Bengal portfolio?
The state-wise DPD bucket-wise, we don't have it ready, that granular data.
Just trying to get that 11% of Assam is still in 31 to 90 and 6.2% in West Bengal. So just to get the riskiness of that, I wanted to see if there are part paying or...
No, Assam and West Bengal, we had elections, right? In March, April and election fever, I would rather say, not exactly election, but the election fever. And we had to deal also with the COVID-related and Assam-specific issues. So like-to-like, what would have to see rather than just independently looking at current DPD percentage number. So directionally, we get confident when we see these numbers coming down. And you will also appreciate that we have not done a single restructuring in our unsecured book, whether EEB or other portfolio or for that matter, any portfolio other than housing. So this -- with no restructuring with the level of activity we have seen in this state and the COVID impact and directionally, in one quarter, if I see a 4% reduction, it gives us confidence rather than worry.
Sure. And related question in terms of the growth, looking at the behavior on the pool and write-off which we had to pay, wouldn't it be fair to consolidate the book rather than still growing it aggressively, particularly on the EEB side? Because we can find this in other states as well. So maybe the vintage we had in West Bengal, Assam, okay, plus maybe the kind of write-offs. And as you said, like competition also came in and that has impacted, but that would be true all across. So shouldn't we look at the consolidating in this kind of an uncertainty rather than still growing it aggressively the way we are doing it currently?
Clearly, actually, we are not going to bankruptcy. West Bengal, our business is at 20 years. And Assam, our business is at 15 years. So vintage of the customer are more in those 2 states. And if you see that strategically, we are not reducing -- we are transforming group loans to the individual loan, which is 11% of the loan now has come as an individual loan from group loan transformed on that last 1 quarter. So that is the way we are improving and to reduce the group loan on that.Second point on that. Even the business, if it is in large number of networks, there is a little bit -- is it this type of NPA or written-off will come on that, where it is small number of that will not come. And other states we have been taken in this year. You know that there is a dance only the model is there, the 3,000 borrowers and 500 borrowers are staff. It has been increased some of the branches, which is more than 3,000, 4,000 and the staff are maintaining because of the all systematically running and from 500 to 600.Now we are split that branches and given to this, the less than 500 borrowers in 1 credit officer and one branch will be like to not more than 3,000 borrowers. So split on that and the more branch which can be split that can be held from the future to maintain the quality of the portfolio. And this is the stage also because demand is here. We cannot deny on that we cannot give.But other part, if you see that the 300 -- 632 new banking unit, which is micro credit office, we have been opened in this year, and only 1 branch opened in Bengal. All are open other than Bengal and Assam. So we are diversifying very strategically, not any close of the branch on this.
Just to summarize, it is not an underwriting issue, it is not a process issue, it is not a company strategic issue for me to -- yes, we are cautious. We are cautious because of environment. We are cautious because of the activity that's been around. So if the environment improves, if the business environment improves, we are confident about our process -- and there is a demand in the market, so that will come.
I visited a couple of this NPA borrowers, and they mentioned about it on that. That is the feedback of whatever you see in this, the nearby of your areas in the eye my house and this furniture, everything I have developed from your loans to running my business and surplus money I have been invested. I cannot forget you. Give the time, I will return back on that. This is a very highly committed customer. So I'd like to say that it is not that because of business model, because of underwriting issue to that, no. It is a very different situation. We are very hopeful on that, that will be returned back again.
Sure. And secondly, on housing finance. So overall, almost 620-plus -- 620 of NPL plus restructured on INR 20,000 crores of a book. That is much higher compared to all the affordable housing financers, the way they have actually reported. So I want to get that. And what would be the average ticket left? And what would be the more than INR 1 crore kind of a portfolio in this -- in the overall housing finance?
So to your first question, you can't bucket the 2 NPA and restructuring and say, this is a stress. As I explained earlier, the restructuring in housing finance is the support given to self-employed customer to manage their business, right? Housing finance is the cheapest loan available to simplify its customers so they choose this route to generate cash flow and get the benefit of some restructuring or deferment. So this does not mean it's a riskier portfolio, which I'm restructuring to manage my book, right? Suresh can confirm we have not given restructuring to a riskier customer, which is all standard and early zero delinquent in largely or an early delinquent bucket customer.And in terms of your ticket size, Suresh can confirm what is our average ticket size on the housing in the last 6 months.
Yes. So as earlier also, I had mentioned in this previous -- one of the previous questions that had come, the restructuring is given mainly, as Sunil said, moral support to the customers, but it is not an indication that there is a stress. Yes, they have taken it to ease their cash flow. Customers have looked at it as an option to ease their cash flow. And as I had mentioned earlier, there are many customers who have also been paying the EMIs, and still they have restructured -- that they have sought for a request -- or requested for restructuring, but they have been paying EMI then on and off, they have been servicing the installments also. So actually, the number of people who have not been paying is very, very, very small. So that's the first point.In terms of the average ticket size, there is not much of a difference between the lap average ticket size or the thing for a normal customer because the segment is the same. And normally, the lap also that is availed by the customers is by the retail customers, who normally take it for a small consumption kind of loan. So it's not a very large value lap that we have.In overall book also, if you look at it, that portfolio that is in excess of INR 1 crore, would be very, very small, would probably be just about 2% to 3% -- 2% or something that they couldn't be beyond that, excluding the construction finance, of course, in the retail book.And just to answer the previous question on Seshadri. Actually, one of the reasons for the higher this thing is that in January, we received a very high CLS subsidy in one of the earlier questions. Just giving the clarification. We received a very large subsidy in the month of January. It is something which cannot be planned. As and when the government releases a subsidy, the credit has to be given to the customer's principle. So it has to be shown as a prepayment to the loan. So that's the normal -- that addition to the figure that happened in January.
The next question is from the line of Shagun Verma from Goldman Sachs.
Yes, thanks for giving me the opportunity second time. Sunil, just one small understanding rather. On Slide 8, the portfolio that you have shown, 25 to 50, et cetera. What would be the duration of this portfolio? When do you expect these customers to run-off -- for this portfolio to run off?
So the duration of the portfolio would have extended by 6 months because of the moratorium, right? So that's why -- but surely, in the last -- in the next 6 months, we should see these portfolio or these customers, at least 50% of the customers to run-off.
And that would lead to upgradations, therefore, because you're saying they've been kind of staying..
Yes, that will lead to upgradation. See, when this issue happened, the first 12 months is a year of pain, which is what we are going through, right? We saw the issue. We saw the challenges. We thought delinquency is going up and now when the collection starts coming in, you will see these DPD buckets reducing. And at some point of time, there will be actual upgrade. Had we been an NBFC, probably I would have upgraded 12% of these accounts this quarter itself because a 90% -- at least 11% of these NPA customers are below 90. So over a period of time, this upgrade will also come.
Yes. And just one more point. The new underwriting that we have done in the last quarter, the disbursement of INR 26-odd-thousand crores, that would predominantly be in 0 to 8-day bucket, right? Almost all of it, at 99%.
That would be in current bucket, not delinquent bucket.
Yes. Yes. Yes. Sorry, I meant that only. So what's the total current bucket for us? Last quarter, it was 75%, right? So what it will be now?
This quarter, it is 83% -- 82%. If I have to take it in one basis, yes, 82%.
Understood. Understood. Sorry, just one final question. So the risk-based provision by the RBI, has that been completed for the previous year?
When you talk about RBI means?
So the RBI conducts the annual audit, right? There is this supervision, et cetera.
Right.
So that has been completed for the previous financial year. And I guess, since there is no mention of it, so no adverse outcome to be reported, right?
Nothing to be reported.
The next question is from the line of Jai Mundhra from B&K Securities.
The first question is on ECLGS. Now we have reported 3.3 billion has turned NPA, and we had also said that we had started ECLGS last quarter only, wherein you would have disbursed additional 20% with a moratorium of at least 12 months. So just wanted to check -- I mean if you can explain how did they turn NPA in this quarter itself?
See the principal account becomes NPA. All linked account has to be classified as NPA.
Okay. So the ECLGS money that you have given that was not given to the -- so there are 2 accounts running from facility running, at least, right? So one facility, they have got the ECLGS, but they have defaulted in the other?
Yes. So the primary account, they have defaulted and become 90 DPD. And so I have to categorize all accounts as NPAs.
And secondly, sir, if I heard you correctly, you said slippages for this quarter was somewhere around INR 21.97 billion and recovery of only INR 23 crores. And if I see your Slide 8, that shows a decent amount of recovery that you have done or that you have effected already. So is this the slippage number? Is there some netting off of recovery that is happening in slippages?
See, for us, if I have to show a recovery, the customer has to move from NPA to standard bucket. Less than 90, still an NPA.
Right. But any one installment that he's paying should be a part of recovery, right? If it pays 3 installment, then it will become an upgrade?
No. So for us, when we say recovery means their DPD has become 0.
Okay. He has just moved down the bucket, but he's still in the NPA?
Yes.
But in that case also, it seems -- at least, let's say, 90, 89 DPD and -- sorry, it means let's say, 120 DPD, and by paying 1 installment, he becomes 92 DPD, for example. Then that additional money should be a part of NPA movement, right, in terms of recovery?
No, sorry, I didn't get your example.
So any NPA account, who is paying you 1 installment, this should come in that recovery movement, right, which I think -- if I remember correctly, you had said only INR 23 crore recovery.
It's not coming in recovery, unless the account becomes DOPD, only then we show it as recovery.
That would be an upgrade?
Yes. Yes. So we are only talking about upgrades.
So what is the recovery amount?
Recovery amount, we don't track it that way. When we say recovery, it is upgrade. There, the customer has become 90 to 0 DPD.
Right. Okay. So in this Slide 8, what is the absolute amount of recovery that you have effected in third quarter or fourth quarter? Business, INR 26.6 billion number is the recovery or this is just market downward bucket movement?
No, no. I'm saying this is the breakup of INR 4,120 crores, which is the non-ECLGS part of NPA portfolio. The INR 2,626 crores worth of customers are paying. They are making part payments. INR 589 crores are paying full installments, but they are still in NPA because unless they become 0 DPD, I can't upgrade them. And INR 902 crores is paying part installment. So essentially, this is the breakup of my INR 4,112 crores non-ECLGS NPA pool.
Right. Okay. So I mean, this INR 589 crore, which they are paying in full from incremental basis, this should ideally be reflected in recovery, right? Or no?
So yes, but the way we look at it, we show recoveries only when there is an upgrade. But if you still say that recovery from NPA customer then that amount will be very large because part payment is also a recovery, INR 589 crores is also a recovery.
Right. So maybe then -- so if the recovery is, let's say, hypothetically, if you were to report this recovery, then slippages will also go up or no?
No, no, slippage won't go up. Those who have moved into 90 bucket have taken entirely in the slippages.
Right. Okay. Sure, sir. And the third and last question, sir, is -- and we have seen 5% credit cost in FY '21. And we are entering FY '22 with 3.5% of net NPA, and we have 8.6% of 30 DPD plus, where -- whereas, in the month of April, where we are seeing a drop in collection efficiency as well. I mean from credit cost perspective, right, it looks like it could be a repeat of FY '21, right? Because you have 3.5% net NPA plus a reasonable amount of DPD accounts.
No. We don't think that way because clearly, last year, the issues were different. We had faced the national lockdown. The businesses were not running. The transport was not happening. The travel was not permitted. We, as a bank, were not allowed to go and meet our customers. All of this is not there in this wave, second wave. The businesses are running. The banks are open. We can meet our customers, right? So the impact will not be same. And last year, we faced another issue as well, which is in Assam, right? So we clearly think that this year has to be much better than last year. And customer are also making their NIM model of the business which was not earlier.
The next question is from the line of S. Parameswaran from Jefferies.
Everyone, this is Prakhar. Sunil, if you can clarify on Slide 7, you have this split of the SMA book, et cetera. And in the previous slide, you have given the collection efficiency on a portfolio, excluding write-off and NPA is 98%. Now basically, if I have to get a comfort on what is the residual risk outside of NPLs, but overdue? Can you clarify that across these buckets, 8 to 30, 31 to 60 and all, what is the collection efficiency that you had in March?
So as we said, we disclosed also in our presentation that including write-off and NPA, our collection efficiency was 95%. If we exclude write-off and NPA from our collection efficiency, it is 98%. That is collection efficiency side. Now we've also done a risk assessment, right? We can always argue whether my assessment is right or wrong, but the way we look at risk is, I have considered -- see, the way we look at microfinance business, it's a disciplined base product. If a customer starts paying, we have seen our experiences that the amount will be fully recovered. We have considered nonpaying customers as the fourth option, right? He have given 4 scenarios in risk estimates. Fourth option is we consider customers across all buckets who are not paying, plus [Technical Difficulty] part paying, they're paying 25% of their installment.
Sunil, that part is understood and very clear. Basically, the issue is about what is the tail red, right? And I understand your subjective assessment, but as an outsider, it might help us that, but let's say, this 3.3% in the 8 to 30-day bucket and 2.8%. On these portfolios, what is the level of collections you could actually see in the March month? Was it in the very narrow range around 97%, 98% for most of the bucket? Or was there any skew that that might just help us.
I don't have the delinquency bucket wise collection efficiency, but I don't think it would be very different given the fact that my overall delinquencies across markets have come down.
Got it. Maybe I can take it offline with you.
Yes, please.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Sunil Samdani, CFO, for closing comments.
Thank you, ladies and gentlemen. Thank you for taking time out on a weekend. Thank you very much. Stay safe.
Thank you. On behalf of Bandhan Bank Limited, that concludes this conference. Thank you for joining. You may now disconnect your lines.