Bank of India Ltd

NSE:BANKINDIA

Earnings Call Analysis

Earnings Call Transcript 2025-Q2

[Unknown Executive]

Good evening, ladies and gentlemen. A very warm welcome to today's analyst meet of Bank of India's Quarter 2 Results for Financial Year '24-'25. It is being conducted in a hybrid mode, physically as well as virtually by our analysts. I would like to thank you all for taking out time and joining us today.

We have with us our top management led by our MD and CEO, Shri Rajneesh Karnatak-ji. Joining him on the dais are executives and executive directors, Shri P. R. Rajagopal, Shri M. Karthikeyan, Shri Subrat Kumar and Shri Rajiv Mishra-ji. I would now request our MD and CEO, sir, Shri Rajneesh Karnatak-ji to address our analysts to begin with.

[Rajneesh Karnatak, executive]

Thank you, Madam. Thank you so much. First of all, good afternoon to all the dignitaries present here, ladies and gentlemen present today in the analyst meet. It is my pleasure to welcome you all for this interaction post publication of the financial results of the bank for Q2 of FY '25. The strong macroeconomic and fiscal indicators of the economy, coupled with the improved investment, controlled inflation, comfortable foreign exchange results exhibited positive sentiments and stability preparing the ground for India to become the world's third largest economy by 2027 and a developed nation by 2047. Against this backdrop, the bank is playing a pivotal role in fueling the country's growth trajectory.

The Y-o-Y credit growth of our bank was 14.51%. The major drivers of growth will be the customer-centric innovation, along with strong commitment on sustainability. The fulcrum of these innovations will be enhanced customer service experience leading to low cost deposit mobilization through retail deposits to fund the credit growth. Asset quality will be given paramount importance with improving underwriting standards, containment of slippages and speedy recovery. In this direction, a few initiatives have been taken by the bank.

First of all, I discuss the business initiatives. Number one, the new credit assessment model based on data available from the digital footprint has been finalized and a product named Star [indiscernible] is developed to be rolled out digitally with an amount of INR 1 crores. Number two, the new internal rating model developed by CRISIL has been introduced for rating investment instruments. Number three, launch virtual account system payment service for assisting virtual IFSC code for corporate clients, which will enable faster collection of their payments with automated reconciliation.

Number four, new Bank of India Tata Commercial Vehicle Loan launched in collaboration with Tata Motor Vehicle Finance. Number five, the maximum limit for [indiscernible] and group under the Star JLG scheme has been increased from INR 50,000 to INR 1 lakh and from INR 5 lakh to INR 10 lakh, respectively. The CGTMSE clearing process and adjustment of the claim money received has been centralized in the bank. The IT initiatives which have been taken are: Number one, the focus on digital and technical transformation, project [indiscernible] has been launched to scale up digital footprints. Project Aditya analyst driven insights to [ induction ] has been launched for developing a robust technological platform and enhancing data quality and governance. Number 3, to enable outward remittances in 100-plus currencies and inward remittances in 30-plus currencies, a multicurrency payment solution, MCPS has been introduced. And number 4, OTP-based withdrawal facility has been implemented with customers can authorize through debits from their accounts to corporates without using any third-party platforms.

We have published and shared the financial results of the Bank for Q2 FY '25 yesterday highlights our agenda. On the business side. Number 1, global business has increased by 12.05% Y-o-Y from INR 12.46 lakh crores in September '23 to INR 13.97 lakh crores in September '24 with the incremental growth of nearly INR 1.5 lakh crores. Global gross advances increased by 14.51% Y-o-Y from INR 5.43 lakh crores in September '23 to INR 6.21 lakh crores in September '24 with incremental growth of INR 78,000 crores. CASA increased by 7.26% Y-o-Y from INR 2.56 lakh crores in September '23 to INR 2.75 lakh crores in September '24, with incremental growth of nearly INR 18,000 crores and CASA ratio stood at 41.18%.

Domestic gross advances increased by 15.03% Y-o-Y from INR 4.52 lakh crores in September '23 to INR 5.20 lakh crores in September '24 with incremental growth of nearly INR 68,000 crores. Sequentially, it has grown by INR 12,000 crore at a rate of 2.46% during the quarter. Domestic deposits have increased by 12.33% Y-o-Y from INR 5.98 lakh crores in September '23 to INR 6.72 lakh crores in September '24, with incremental growth of INR 73,000 crores, sequentially it has grown by INR 24,000 crores at 3.83%. RAM advances increased by 19.74% Y-o-Y from INR 2.50 lakh crores in September '23 to INR 3 lakh crores with incremental growth of nearly INR 49,000 crores with a share of 57.70% of the total domestic credit.

As regards profitability and asset quality. Operating profit for Q2 stands at INR 4,147 crores, witnessing a growth of 10%. Net profit stands at INR 2,374 crores, witnessing a Y-o-Y growth of 63% for H1 stands at INR 4,076 crores with a Y-o-Y growth of 35%. Global NIM stood at 2.82% and domestic NIM stood at 3.14% for Q2 FY '25. Interest income for Q2 stands at INR 17,000 crores witnessing a Y-o-Y growth of 16% for the half year and it stands at INR 34,000 crores with a Y-o-Y growth 17%. Noninterest income for Q2 FY '25 is INR 2,518 crores, witnessing a Y-o-Y growth of 14% -- 49% and a half year stands at INR 3,820 crores with a Y-o-Y growth of 21%. There has been improvement in the asset quality with a reduction in both gross NPAs and net NPAs. Gross NPA ratio is at 4.41%, improved by 143 basis points on a Y-o-Y basis and net NPA ratio is at 0.94%, which has improved by 60 basis points on a Y-o-Y basis.

In tune with the growth of the economy, the guidance for domestic credit growth will be around 14% and domestic deposit growth is projected at around 13%. The key focus area will be low cost deposit mobilization for protecting our NIM and increasing high-yielding advances for consistent growth in the business with emphasis on digital initiatives, improvement in asset quality and arresting slippages. The endeavor of the bank will be increasing efficiency and profitability along with the focus on compliance and better corporate governance.

I would like to thank you all for showing faith in us and for your continued support. The floor is now open for discussion and question-and-answer. Thank you so much.

[Unknown Executive]

[Operator Instructions]

So let's move ahead, can I have the first one coming up, please. Ajmera-ji, welcome.

[Ashok Ajmera, analyst]

Yes, I'm Ashok Ajmera. I'm the Chairman of Ajcon Global. Sir, complements to you for a very good set of numbers, sir. If you look at the -- even the profitability point of view, both the operating profit and net profit have gone up substantially. And overall business of the bank is also -- I mean as far as the growth is concerned is also doing well as compared to some of the other banks. Having said that, sir, what we have observed is that in our profitability this quarter major component has come from other income where the investment profit and the devaluation of the investment has gone up from INR 166 crores to INR 730 crores and recovering from the written-off accounts has gone up from INR 202 crores to INR 685 crores.

So these put together [indiscernible] INR 1,600 crores, INR 1,700 crores of the -- which straightaway gone to the bottom line of the bank. And on the other side, if we look at [Technical Difficulty] real banking business, which is dropping substantially -- has dropped rather in this quarter, I think from 3.42% to 3.17% or [ 1, 2 ] something. So there, we are facing the pressure of the margins and here, we are doing well of the recovery. So net-net, our bottom line is definitely increased, which is a very good welcome sign, which increases our book value of the share also and overall profitability.

So one my question on this point is, number one, sustainability of this other income in the remaining half year of this FY '25? And how do we meet the pressure on the NIM, so as to increase the NIM and overall profitability of the bank?

[Rajneesh Karnatak, executive]

Let me answer that. Yes, yes. So as you rightly said, Ajmera-ji, that the profit will increase, but definitely, there are certain challenges, which you see in the balance sheet. So for the first time, we have crossed the profit of INR 2,000 crores in the quarter and closed this figure at INR 2,374 crores for this quarter. And it has improved from INR 40 crores, INR 50 crores, which we had shown in September '23 and has against INR 1,700 crores, which we had shown in the June quarter. So you are right that this net profit is also rising on the fact that noninterest has increased and noninterest income is now INR 2,518 crore and it is written by basically 2 aspects. One is the treasury income, the sale of securities which we have done; and number 2 is with respect to the recovery in the written-off accounts.

So let me explain that we have done some good treasury management from the treasury department side. And there were certain securities available with us in which we found that there was good margins available when we are disposing them. So that profit we have taken in the books. And because of which the profit from the sale of treasury from INR 81 crores, it has jumped to INR 730 crores on a Y-o-Y basis. Now coming to the written-off accounts recovery, again, it is not one single account. There are 7 to 8 accounts in the NPA book, which got resolved this quarter, and we received this money. And all these accounts were written-off so they have come not only interest income on any other income or reduction of NPA, they have gone straight away to the P&L of the bank through the noninterest income. And there, it has increased from INR 560 crores in September '23 to INR 685 crores in the September '24.

There also have been some increase in the noninterest -- other noninterest income, which typically with respect to the penal charges as per the RBI circular. So penal interest, which was earlier booked in the interest income is now booked under the noninterest income. So these are the basic components. Apart from that, we have also done well in the cross-selling of third-party products, where our income is INR 85 crores as against INR 60 crores -- INR 53 crores, in fact, in September '23. So all in all, INR 2,518 crores has definitely contributed to the overall profitability of the bank for this quarter. And we think that with the kind of pipeline that we have in the NPA book, written-off account pipeline, which is nearly INR 45,000 crores and gross NPA book of around INR 27,000 crores. So recovery in this quarter and the ensuing quarter in the Q3 and Q4 will also be good so that the noninterest income of the bank continues to show the same kind of growth number, which is there or at least it is sustained at that level.

The concern with respect to the net interest income, yes, it has increased by only 4% on a Y-o-Y basis. And on a Q-on-Q basis, as you rightly say, it has degrown. Some of the -- one of the reasons for that is the RBI circular wherein the penal interest income, which was booked here is now getting booked in the penal charges and going to the noninterest income. The second thing is that I have clarified in that yesterday press conference also was that around INR 18,000 crores to INR 19,000 crores of our corporate book got repaid in the first week by the 10th of July. So they were those advances in the corporate book where the rate of interest was very fine and linked to the repo rate, where we thought that it is better to get them paid off rather than continuing with the rising interest rate scenario on the deposit side. So that amount got paid off.

So INR 18,000 crores, INR 19,000 crores of advances, corporate advances, the entire 90 days interest income was not available to the bank. So that was the thing, though the credit has gone up on a quarter-on-quarter basis, both Y-o-Y and sequentially also. But the main thing which happened was the credit buildup to that extent some time and majority of the disbursal in credit happened in the month of August and September, which did result in the increase of credit, but the average credit was on a lower side during the quarter. which resulted in the lower net interest income, finally which resulted in the lower net interest margins, which you rightly said we have closed at 2.82% for this quarter on the NIM side on the global side. But on the domestic NIM side, we are having a healthy NIM of 3.14%.

So we have to be very cognizant of the fact that when you see our book -- Bank of India book, the total business stands of INR 13.97 lakh crores. Out of that 15% is the international book. In the international book, the NIMs are quite fine. In fact, they are much lower than the domestic NIM because of which when we see the overall global NIM, it gets moderated. Because of this moderation, it is coming down to 2.80%. In fact, most of the banks who have higher international books, their NIMs get moderated once the global NIM is calculated. So that is the reason it is there. So further, I may say that it has bottomed out for us. It should not go below this. And with the busy season, which is coming now in Q3 and Q4, we expect that there will be better credit growth and better disbursal, which will take place month-on-month basis, which will give better interest income to the bank and then better net interest income. And so the overall margins will be better and the NIMs will be better in the coming 2 quarters for the bank.

[Ashok Ajmera, analyst]

You said on the overseas book, yes, I think we have got a very sizable book of more than I think...

[Rajneesh Karnatak, executive]

Yes, INR 2.03 lakh crores gross, more than INR 1 lakh crores of deposit and similarly, more than INR 1 lakh crores of advances.

[Ashok Ajmera, analyst]

Yes, sir. Total business stood at -- on that profit is only INR 280 crores or INR 300 crores.

[Rajneesh Karnatak, executive]

INR 300-plus crores. In fact it has doubled. In fact, it has doubled on Y-o-Y basis.

[Ashok Ajmera, analyst]

Sir, my second question or rather some data point is on the little higher provision in spite of writing off a substantial amount of the provision writing back of, I think, INR 384 crores, we have written back in spite of that, the total provisioning is INR 1,427 crores on the NPA.

[Rajneesh Karnatak, executive]

Correct.

[Ashok Ajmera, analyst]

So I can understand that one account of that I think MTNL. I think INR 200 crores provisioning has been made. This has been made in this quarter itself out of this INR 1,400 crores? What is our total outstanding on that? I think INR 1,000 crores you reported, we saw in some press. So number one, what are the other provisions? I mean why the provision figure has a little bit gone up. Number two, on MTNL account, how are we proceeding all the banks together, whether if it come back standard and again slip, how do we plan to recover the money, even though it is government guaranteed, but it does affect our profitability quarter after quarter because of the provisioning and NPA figures also goes up.

So some color on this because our SMA 1 and 2 have also gone up substantially in this quarter, including SMA 0 also. So overall SMA numbers are quite high. I think it is doubled or tripled from the last quarter. So SMA 2 and 3 -- SMA 1 and 2, what is the status because now we are sitting in the November, so some account might have being recognized also must have come to the SMA 0, so can you give some color on that SMA number vis-à-vis this provisioning?

[Rajneesh Karnatak, executive]

Yes. So coming on this provisioning on NPA accounts. So INR 1,400 crores is the provisioning which we have done in this quarter. So 1 incremental increase in the provision this quarter is because of that 1 public sector account NPA, which had slipped during this quarter. In that, we have the exposure is more than INR 1,000 crores, in which we have made the provision as per the IRAC RBI IRAC guidelines. So that provision is around INR 150 crores to INR 200 crores, somewhere in between that.

The remaining provision with respect to some NPA accounts which are unsecured, which were legacy NPAs where we have now taken them as unsecured because book debts and stock are not receivable in those cash credit accounts. There have made the provision as per prudent banking practice. And some provision is with respect to the aging provision which happens in the due course of business when substandard account becomes a doubtful account from D1 to D2 and the doubtful goes as per aging to the loss category. So that is the kind of provision that we have made. So INR 1,400 crores provision has come because of that. So that is one part.

As regard the account specific details which you are asking, see, this is a public sector account. And we are already in touch with the management. Other banks are also in touch with the management, and the management is working out some resolution process. So we have to wait and see what finally the resolution process comes out from their side and whether it will be some restructuring or some other kind of which they want to give to the lenders. In any case, it is a central PSU, definitely, the management will take a cognizant call and majority of the lenders are public sector lenders.

So we are waiting and we are very hopeful that not much of a hit the banks will get in this kind of account. So that is that point. As regard to the SMA book, as you said, that the SMA numbers, so SMA numbers, if I can clarify SMA INR 5 crores and above, if you see are from our slides from INR 9,600 crores in June, it has come down to INR 7,600 crores overall SMA numbers.

[Ashok Ajmera, analyst]

Especially, these SMA [indiscernible] SMA-2 also. .

[Rajneesh Karnatak, executive]

Correct, correct.

[Ashok Ajmera, analyst]

[indiscernible] INR 2,000 crores.

[Rajneesh Karnatak, executive]

So the broader point is that the overall SMA number has come down by nearly INR 2,000 crores quarter-on-quarter basis from June to September. And this SMA is INR 7,600 crores constitutes only 1.29% of our overall standard book of the bank. That is one part.

The second piece which you rightly said is most of this SMA number, which is there was earlier resting in the SMA-0, which is now coming under the SMA-1 and SMA-2 category. SMA-1 and 2 has increased substantially. And if you see the further column in that, the corporate SMA has increased in the SMA-1 and 2. So these are 4 or 5 accounts, which are for a state PSU in one state which are there, which are now showing SMA of SMA-1 and 2. But let me clarify all these accounts are secured accounts, backed by assets, number one, backed by cash flows and some of the accounts are also having the state government guarantee.

So we do not foresee any [indiscernible] in these accounts in the coming quarters, though the accounts may remain under stress because of the cash flow issues in SAM-0, 1, 2, but we are very hopeful that these accounts will not slip into the NPA category.

[Ashok Ajmera, analyst]

Sir, my third question, and this is on the credit side. Now we are -- it's very good that we are maintaining the credit target of 14% for FY '25. So remaining 6 months now, I think the pressure is more because what we have done in the first half is that we have to do double than that in the second half to achieve these numbers.

So what is our plan for that? What is the sanction pipeline for the projects coming in? What kind of projects and the loan proposals are coming in? And how are we so confident that, yes, we will achieve this 14% number of the credit growth? Some color on that, sir, so that we are sure that, yes, our bank is now has already become a INR 14 lakh crore bank, will definitely grow to the side of 13% deposit and 14% credit.

[Rajneesh Karnatak, executive]

Correct. So if you see the credit growth in this quarter, so the global credit growth has been around 14% and the domestic credit growth is around 15%. So that is a number which we have already achieved. Within that, if you see that the overall growth in RAM sector, it has been -- nearly the RAM sector growth has been nearly 19%. Agriculture, it has grown by 21%, Retail is grown by 21%, MSME has grown by 15%. Overall RAM credit has grown by 19%.

And the overall RAM portfolio is 57% of the overall domestic credit book, which means that 43% only is the corporate credit book. That is one part. On the other part, as regard to pipeline is concerned, more than INR 70,000 crores of pipeline we are having as on date, which includes both corporate and also the RAM credit, majority of which is in the corporate pipeline, wherein there are infrastructure pipeline of nearly INR 15,000 crores and apart from that, there is industrial borrowers also, which are there in the pipeline. And totally, it is agnostic to any industry, in particular, there is infrastructure where we have pipeline for roads. Disbursal for roads are pending, disbursal for some of the ports are pending, disbursal for solar power plants are pending and then even wind energy is pending, and disbursal are yet to take place. And then we have sanctioned some data warehouse projects, also warehouse projects and data centers projects also.

And then there is iron, steel, textile, petrochemicals, chemicals. So it is a whole host of products, including ethanol and other kinds of things. And EV is also there, battery is also there, where the sanctions in principles have been given. So we are very confident with the pipeline of more than INR 70,000 crores, which is, in fact, 10% more than the present -- the loans for the bank that whatever the target numbers we have kept 14% is a moderate target that we have kept for ourselves for March '25 on the global credit growth.

But I'm pretty sure with the kind of pipeline that we are having and the kind of action which is coming from the field level from our large corporate branches, from our underwriting centers at retail MSME and agriculture and also the 18 ECCBs that we have opened, emerging corporate credit branches, we are very confident that this 14% credit growth target we have kept for ourselves, we'll be able to achieve.

[Ashok Ajmera, analyst]

Sir, just on this credit only, I was going through the ESG slide, to the renewal anergy we have given the loan of almost about INR 5,000 crore. So is it spread over the various players in the renewal energy or some 1 or 2 or 3 big corporates, sir?

[Rajneesh Karnatak, executive]

Yes,yes. No, no, it is totally spread out. It is spread out in renewable energy in solar also and wind also. And it is spread across the geography and also it is spread across the players.

[Unknown Executive]

Thank you, Ajmera-ji. And one question coming up from [indiscernible]. There was 1 question from [ Mr. Naren ] from [indiscernible]

[Unknown Attendee]

Yes. My name is [ Marsal ], I'm an investor. My first question is regarding this, we have other income substantially shoot up, so about INR 700 crores is there recovery from the NPA, so is it sustainable for the coming quarter or not?

[Rajneesh Karnatak, executive]

Yes. So we have replied to this question. This question was there from the first analyst also from Ajmera-ji. But for your convenience I'll respond it again. See, we have whatever recovery we have done from the written-off accounts, it is not one single account, it is 6 or 7 accounts under which the NPA accounts we have done the recovery in written-off. So as I said, we have gross NPA number of around INR 27,000 crores and written-off number of around -- amount of around INR 45,000 crores. So with this kind of pipeline, which is there in the NPA book and the kind of which we are having negotiations which we are having on a one-to-one basis for a onetime settlement.

We are having with NARCL for sale or we are having with the ARCs or which we are -- the accounts which we are under discussion having under the COC in the NCLT, we are pretty sure that this number, which is we have shown a recovery number, which we have shown under the noninterest income, that interest will this kind of return will also be sustainable in the Q2 and Q3. And just to give further understanding of that, so last year, whatever recovery we have done, we will be doing a recovery, which will be much better than the recovery, which was done in the last financial year for March '24.

[Unknown Attendee]

So you meant to say we have the pipeline of INR 72,000 crores, INR 27,000 crores plus INR 45,000 crores?

[Rajneesh Karnatak, executive]

Yes, INR 45,000 crores is our written-off book and INR 27,000 crores is the gross NPA. So that is the kind of pipeline in the NPA, which is there, which is available for settlement and resolution.

[Unknown Attendee]

Sir, my second question later, employee cost has increased substantially at consol level during Q2 as compared to Q1, employee cost has gone up by INR 25 crores and as compared to Y-o-Y by INR 455 crores. So is it some one-off there? Or like why it is so high this employee cost? Because all those like provision required for the increment and this industry level agreement has already been done in the like previous quarter over the March.

[Rajneesh Karnatak, executive]

Kumar, do you have any numbers with you for that?

[B. Kumar, executive]

Sir, this particularly employee costs have increased because of our AS-15 provision, sir, because otherwise...

[Unknown Attendee]

Sorry. Can you speak loudly, sir?

[B. Kumar, executive]

Yes, sir. Sir, this is because of AS-15 provisioning, we have to keep additional provisioning because of that, we have to keep employee cost [indiscernible] it is a normal increase only.

[Unknown Attendee]

It cannot go by so much because if I repeat at the consol level, our employee cost in September '23 quarter was INR 2,197 crores and in June '24, it became INR 2,367 crore and now it became INR 2,652 crores, so it means it has gone up by INR 455 crores, it can't increase at that level because whatever incremental will be required, it will not be this much amount.

[B. Kumar, executive]

Sir, actually when September we are taking at that time this employee -- this is not which one -- settlement happened only on 1st April, sir. September it was done on the estimation of 15 percentage. Now [indiscernible] 1st April that is what you can see increase on quarter-on-quarter basis.

[Unknown Attendee]

Sir, your language is not understandable. I'm sorry for that. Can you please -- if you can tell us that how much amount is the included which was for example some provision done, which will not be repeated at that much level in the subsequent quarter. Can you tell us the amount, please?

[B. Kumar, executive]

Yes, sir. I'll tell you. September '23, when you were going to do the employee cost at that time, [Foreign Language] exact provision amount was not crystalized. We can estimate that 15 percentage employee cost, it would be. After that only when the real settlement happened in December '23, was settled 17 percentage and 1st April '23 the amount was crystalized and we have started booking in the June quarter.

And subsequently, whatever is there, we have done something in June quarter and balance was in September quarter and for that AS-15 whatever is there, we have done some percent in June and then some percent in September we have done.

[Unknown Attendee]

So I want to know that -- I want to know the amount which was done for AS-15 in June quarter and September quarter because see, it is already late 2 quarter so going forward it should be only marginal increase not at that much, so please tell us amount.

[B. Kumar, executive]

I'll just share the number. Readily, I don't have number, I'll just share. You can mail to investorrelations.com and we will share the number.

[Unknown Executive]

You please mail it to the investorrelation.bankofindia.co.in. You please mail.

[Unknown Attendee]

Can you share the number?

[B. Kumar, executive]

Yes, sir. We'll share the number.

[Unknown Attendee]

Yes, sir. And in Item #8 of this consol P&L our provision other than tax and contingency are INR 1,062 crore, but it's a provision for NPA is INR 1,450 crore. So what is the INR 378 crore item, due to which it has become negative -- that is the negative item you can say in this provision?

[Unknown Executive]

So that is the reversal of INR 364 crores, no?

[Unknown Executive]

INR 364 crores.

[B. Kumar, executive]

Yes.

[Unknown Executive]

So that is the reversal on the standard asset side of [ INR 384 crores. ]

[Unknown Executive]

Thank you. I think the questions are satisfied. There is one question coming up on the chatbox. Sir, I'll take this one first because it came very first, okay, and then I'll let you speak. He is Mr. Abhishek Kashyap from [indiscernible] He has congratulated the management team. He has 2 questions. First is what segment or sector are we having fresh slippages and what part of the loan book are unsecured book loans.

[Rajneesh Karnatak, executive]

So as regards to the fresh slippage is concerned, we had a fresh slippage of INR 2,046 crores, and the slippage happened, 8% of that slippage was in the retail book. 28% of the slippage was in the agriculture book, 19% of this slippage was in the MSME book. 43% of that book was the corporate book and 2% was in the overseas book. And in the overseas book also, the INR 64 crores is because of the foreign exchange fluctuation in the previous NPAs. So basically, 98% is in the domestic book itself and the major component being in the corporate sector and 1 single lumpy account, which I've already explained earlier.

As regards the second part was with respect to the unsecured loan. The unsecured loan book, predominantly which is in the retail, our exposure, if you see. So in that, there is that personal loan segment, which is there, which is unsecured, so out of INR 1.21 lakh crores of retail book, INR 11,542 crores of the personal loan book is unsecured and which constitutes nearly 9% of the total retail book. However, if you see the global bank book of the loan book, it is only 1.93%. Out of that INR 11,542 crores, the NPA is only around INR 100 crores and SMA-2 and SMA-1 number if you see in the personal loan book, that is around INR 300 crores.

So overall, the total stress with respect to the personal loan book, the NPA plus the SMA-1 and 2 is only around INR 400 crores. It constitutes at around 3.6% to 3.7% of the personal loan book. And we do not see much of a challenge over there for the simple reason that lot of guardrails we have placed in the personal loan book, while we are sanctioning.

Number one, the credit score is more than 700; number 2, we are taking the cash flows also we are taking into account. Majority of these personal loan accounts are having salaried accounts with us. saving account with Bank of India.

The third one is that quite a few number of them are having housing loans and mortgage loans with us. And overall, when we are doing this personal loan book, the credit underwriting is happening through the digital mode and some of the credit rating is also happening through the physical mode at the branch level. So having all these guardrails with us, so we are very confident in the kind of stress which we are seeing, which is quite minimal. So we are very comfortable with the personal loan book, and it is also growing at a healthy pace because of the low base.

[Unknown Executive]

Thank you, sir. Sir, we take your question, unmute yourself.

[Unknown Analyst]

Ramesh Bhojwani from [indiscernible] Three points of observation. The power sector our lending export and everything going down if you see comparative chart which you have given in which [indiscernible] also now are in amount of INR 15,000 crores, so we'd like to have a clarification of this.

[Rajneesh Karnatak, executive]

So power sector, you are saying that the exposure is coming down in SEBs?

[Unknown Analyst]

Yes.

[Rajneesh Karnatak, executive]

Also coming down. Yes.

[Unknown Analyst]

I hope the SEB exposure is absolutely healthy and normal. .

[Rajneesh Karnatak, executive]

Yes.

[Unknown Analyst]

And second, the power sector is like at the government and all the entire power ministries [indiscernible] financing are on a war footing because what power we are generating today 252 gigawatt, we have to add so much in the next 5 years, so we [indiscernible] big part to play or big role to play in this. And I would like to have your thoughts on that one?

Second, we have an exposure in NCLT of INR 29,000-odd crores. So what will be like the second half [indiscernible] is better half than the first. So going forward in the next 2 quarters, what would be the returns from this -- which will go straight into our bottom line and leave our net interest margin above 3?

And the third one is in the fresh slippages with the corporate slippage INR 1,094 crores apart from retail, agriculture and MSME, so the corporate slippage of INR 1,094 crores plus the second quarter of this year, there has been [indiscernible] in the large, medium and small sectors, so is it a trend, it will gather further strength, further roots, or it will be reverse?

[Rajneesh Karnatak, executive]

Okay. So to answer your first question regarding power sector, if you see our slide also the power exposure, which were INR 42,000 crores in September '23 has went down to INR 35,000 crores in June '24 and in September, it is come down further to INR 34,800 crores.

See, the outstanding is coming out for the simple reason that whatever the power sector have been funded their own legacy funding. And the [ COG ] has happened and the repayments are coming as per the normal schedule of payment. That is one reason.

The second reason is that thermal power the outstanding, which is there, now it is getting consolidated among a few large lenders. For the simple reason that we are the thermal power was sanctioned by 10 or 12 lenders, public sectors and private. Now, they are getting it consolidated. Now the [indiscernible] rating is also there and A rated or AA rated and they are getting consolidated at very fine price. So that fine price in some of the cases, we have left those transactions. We have let the account get -- taken over in the thermal power sectors where the rates were very fine, and it was not sustainable for us, so that is also one of the reasons that is coming down. As you said and Ajmera-ji also said that in the energy column we have already stated that we have a pipeline of nearly INR 5,000 crores.

I also stated we have a pipeline of INR 15,000 crores. So we have pipeline in infrastructure sector of nearly INR 15,000 crores, predominantly that is into the power sector only. That is into the grid energy. So that will take some time to get disbursed and get allocated finally because all these projects take time right from the land and till the time the installation happens and finally, the machinery, lot of bank guarantee and LCs have already been established in some of the accounts where the imports will be happening and the disbursal will happen after 360 days, normally typically in such kind of transaction.

So this amount will increase, but presently, it is tapering down for the simple reason that normal repayments are happening. Second point was related to the stress in this sector, in the state electricity board. We do not see any stress presently in any of the accounts. And I don't think any of the account is appearing in SMA-1 or 2 list also.

So those are public accounts, which are clearly in SMA 1 and 2 list are the non-public sector accounts. So that is another clarification I would go. On the NCLT side, see a lot much not much is there in our assets as far as the resolution is concerned because lot of it depends on the COC, on the resolution professional and also the bids which are coming and finally, the NCLT or NCLAT [indiscernible] approval on the bids which are coming.

So -- but still we are confident that a number of resolutions will be taking place in this H2 of this financial year. As we said earlier, to just give you a number, so the recovery was last year INR 6,300 crores in FY '24 and we are really confident with the kind of run rate that we have that the recovery during this financial year should be INR 7,000 crores-plus in this financial year. So that is one number. .

As with regards to the fresh slippages, this fresh slippage number, which has gone from -- see, last quarter, it was INR 1,950 crores, this quarter, it is INR 2,500 crores. So if you remove this one single lumpy fresh slippage, which has happened of around INR 1,000 crores, so had it not been there, our fresh slippage was only INR 1,500 crores. So it is much better. In fact our slippage ratio, our credit cost, which was there in this quarter had this one single amount not being there, both would have been much better than the June quarter. So this is a one account aberration which has happened during the quarter.

And I said -- as I said earlier also, in H2 we do not foresee any further corporate account of this size and segment falling down into NPA category, so we do not foresee much of a stress in this segment.

[Unknown Executive]

Thank you very much. There is 1 question, sir, coming from the chatbox. So it's from [indiscernible] Securities. Last 2, I have [indiscernible] what is the total IT expenses [indiscernible].

[Rajneesh Karnatak, executive]

Yes. I'll take the second question first on the IT expenses. As regards the IT expenses are there in financial year '24, we had budgeted our expense of around INR 2,000 crores. Out of which, we had spent nearly INR 1,600 crores which were debited to the P&L. So that was our OpEx and general IT expenses and also on the cybersecurity.

So 80% of the budgeted expense on the IT side was paid -- was debited in the P&L account in last financial year FY '24. As regards this financial year FY '25, this year, we have budgeted a figure of INR 2,100 crores, out of which around INR 700 crores, we have already spent in this half year, H1 of this financial year up to September. And some INR 200 crores, INR 300 crores additional we have budgeted next quarter also during this P&L also. So that is on the IT side. As regard the EBLR is concerned. So EBLR number is around 40%-plus for us, 47%. And in that repo rate is 6.5%.

Normally, we are lending at around, frankly speaking, our 1 month MCLR overnight MCLR is 8.15%. So what is happening in the corporate is that many corporates are asking for very fine rates. And in that in the MCLR segment, we cannot go below 8.15% because our overnight MCLR is 8.15% at presently. So what we have to do is if we have to keep that account with us being a AAA borrower, maybe it is a PSU or a corporate AAA borrower who is asking for repo rate or a rate below 8.15% when they are not agreeing for the MCLR rate we have to go to the repo rate.

So there, we negotiate as much as possible, and we are trying to negotiate at a rate of interest of somewhere around 8%. So which means that 6.5% is the repo rate. So 8% effectively if we are taking, which is building at around 6.5% plus 1.5% is equal to 8%.

So that is the kind of range which is coming in the EBLR-linked advances. That is on the corporate side. Apart from that, EBLR is also linked there on the retail segments and also on the MSME segment, there also that is as per housing loan, presently, we are giving to the best-in-class housing loan at 8.3% where the credit score is more than 8.50%.

And then also, there are some discounts in the agriculture -- this MSME segment on the EBLR side. There, the interest rate in ranging between 8.25% to 8.75% or up to 9% also.

I further clarify that in our bank, we have only one kind of external benchmark, which is the repo benchmark. We're not lending against the T-bills. There is no exposure against the T-bills.

[Unknown Executive]

Thank you, sir. Yes, please. [indiscernible].

[Sushil Choksey, analyst]

Sushil Choksey, Indus Security. Congratulations to team in Bank of India. Specifically after a decade, we are coming out of slump to improve annuity and [indiscernible] Sir, media interacted [indiscernible] done. would you like to give some guidance for the current -- second half specifically on ROA, ROE domestic and advance and both the advance fee.

[Rajneesh Karnatak, executive]

So as regard to the top line is concerned, as I said that -- the overall credit growth will be at around -- global credit will be at around 14% and domestic credit growth will be at around 15% for FY '25. As regards deposit is concerned, the deposit growth will be around 12% to 13%. So that is the number. As regards to the ROA is concerned, so we have already touched the ROA in this quarter at 0.94%. For the Q3 and Q4, we will be somewhere very close to 1% ROA on a quarterly basis for quarter December and quarter March. So that is the guidance. And overall, the ROA should be at around 2.90% for FY '25. So that is our guidance, which is there.

ROA for the -- ROA, it is there. So for the quarter, it will be near to 1% for December and for the March quarter. As regarding the NIM is concerned, see, NIM is already at 2.82% I have already explained. And for the domestic NIM it is 3.14%. And it is because of the international NIM that it averages down to 2.82% which is there for this quarter. But the guidance FY '25, we are saying that it should be at around 2.90%.

[Sushil Choksey, analyst]

Sir, looking at the credit pipeline, which you have highlighted of INR 70,000 crores, market condition where growth in the second half is going to be much better because the first half was [indiscernible] Bank of India gets credit pipeline of higher than INR 70,000 crores, how are we preparing for that kind of growth part, will you sacrifice growth or we take the advance because we are adequately prepared at the employee and management level to [indiscernible] pattern?

[Rajneesh Karnatak, executive]

Yes. We are totally prepared for taking the numbers. See, we have 9 large corporate branches. We have now emerging corporate branches 18. There also the proposal pipelines are coming. And then we have 400-plus credit underwriting centers in retail, MSME and agriculture. So the entire bank is well tuned now with 5,000-plus branches to take on the credit growth. In fact, the entire credit growth comes from the fees only. And the pipeline, which is coming is from the fee level only. So we are totally attuned to that.

In fact, a lot of campaigns and other things we are doing to match this credit growth with the deposit growth that is also there. So when we are saying that we have a credit growth will be at around 14% on a global level. And the deposit growth will be 12% to 13%. The gap is also there that we will be funding through the other measures, which are there like infra bond, we have already raised for INR 5,000 crores, another INR 5,000 crores we will be raising in the second half of this financial year.

So Tier 2 bonds, we have already raised INR 2,500 crores in H1. In H2, we'll be raising Tier 1 bonds in H2 that is INR 2,500 crores. Apart from that, we are doing some refinance also from SIDBIs and others. And apart from that, we have excess SLR also against which also we are doing the borrowing, so whatever the deposit is available to the bank and the deposit growth that will be available to the bank plus the other resources that we have, they will be adequate to meet the credit growth.

Apart from that, as a strategy, what we have done for increasing our resources is that already 36 branches we have opened that we planned till date and we are planning to open total 200-plus branches in this financial year, which will help the bank not only in the raising of resources like CASA and retail term deposit, but also for increasing RAM advances in the bank. So all these things plays together, we are very much poised to the growth trajectory, which we have planned for ourselves and top management is totally committed to that.

[Sushil Choksey, analyst]

Sir, your commitment is well taken. To sustain the employee motivation, the growth in pattern, what are we doing to boost our digitization and employee strengthening which were driven through perpetual [indiscernible] trajectory where the banks get back to broadly and the sustaining number?

[Rajneesh Karnatak, executive]

Correct. So as far as the digitization is concerned, if you see this slide, we have 17 products as on date, which have been digitized. So if we see the total digital book of the bank of the loan book and the overall book, INR 51,000 crores is the digital book of the bank as on date when we speak, which constitutes around 8% of our total business number. So that is the kind of number we have already achieved digital number, which is totally digital also and then also some assisted journeys at the branch level, which happened in the rural branches, which happened.

Overall, digital book is at around INR 51,000 crores. That is 1 part. 17 products are already there which are on the digital platform. Another 10 products will go to the digital in the next 3 months. So 27 products will be digital. That is 1 part. Apart from that, on the digital side, we have already put Accenture for digital lead project, artificial intelligence and machine learning and generative AI where use cases have already started -- they have started pushing and we have started pushing them on the field not only for marketing but also for sales and also for the early warning system of the credits and other things. So that part has already started.

Apart from that, we have also onboarded recently McKenzie for our next-gen, which is also there in the presentation for the digital and IT transformation and also on the cybersecurity side. So once they are also on board with their resources and other things, next 2 years will go for the digital and IT transformation of the bank. That is another part, which is there.

Lot of the processes which are mundane process and routine processes, they will be automated so that the staff is made free for -- number one, for doing sales and marketing; number 2 for doing collections and number 3 for doing the recoveries in the NPA amounts. This is what we want to do for our staff, which gets free from all these automated processes while that digitization happens.

As regard the staff motivation is concerned, there also we are running the [ Starlight ] program under the BCG, where which a lot of initiatives we have taken for improving the motivation and the skill and upselling level of the staff at all levels, right, from the clinical level, sub-staff level and to the officer level, right from scale 1 up to the top management level. So all these things taken together, will transform the bank in the next 1 and 1.5 years through a shiny star and we'll be able to compete with the best in the market.

[Sushil Choksey, analyst]

Sir, what is the CapEx number linked to all this new initiative.

[Rajneesh Karnatak, executive]

So CapEx number in the sense that, that is only the consultancy charges which has already paid.

[Sushil Choksey, analyst]

So the entire digitization...

[Rajneesh Karnatak, executive]

Yes, that I said in the first year, it is INR 2,000 crores. That is the budget, INR 2,100 crores, out of which INR 600 crores to INR 700 crores we have already spent in the H1 and INR 200 crores to INR 300 crores we have already booked in advance. So that is which is there.

[Sushil Choksey, analyst]

Sir, a lot of questions are being asked about renewable sector. I have read in the press that we have signed up with Tata Power, we have signed up [ Zerodha ] how is the traction [indiscernible].

And possibly a lot of cross-sell may be possible for Bank of India [indiscernible] various other things. How are we progressing on this kind of initiatives where you are already tied up?

[Rajneesh Karnatak, executive]

On the rooftop solar government scheme is there, a lot of good traction we are seeing. And that we are seeing in particularly some states which are in North India like Rajasthan, it is there. In Haryana, it is there. UP, it is there. Gujarat, it is there. Madhya Pradesh, it is there. A lot of traction is there where there are [indiscernible] where you can have a solar rooftop. So a lot of traction is coming over there and disbursal and sanctions are also happening. And we have done a lot of vendor tie-ups. The vendors will be getting these equipments and like doing the O&M work for the laying of the equipment at the rooftop. That is one part.

The second part is the sanctions that we have given under the JLG platform under the renewable energy, both in solar and also in the wind energy. Hydel not much is there, frankly speaking. But definitely, solar and wind, we are doing aggressively. And it is, as I earlier said also that 5, 6 players under whom platform we have sanctioned and it is spread across the entire geography in the country. And good traction we are seeing present outstanding is in the form of non-fund based. Once the 360 days or 270 days happen, they will get converted into fund-based outstanding.

[Sushil Choksey, analyst]

Are we targeting any treasury operation between international and domestic book like few of your peer banks which are well known to you -- directly book income on the FX arbitrage.

[Rajneesh Karnatak, executive]

So presently ForEx arbitrage because of the present situation, which is there in the international market. ForEx arbitrage presently is not there, which used to be earlier, but I would request Subrat to take it further.

[Subrat Kumar, executive]

So whenever there is any opportunity in the arbitrage market, we are always there to take advantage of that. Otherwise also, if you see the treasury operation -- so the performance has improved a lot. And I think it is -- we maybe one of the outliers also so far as performance is concerned.

[Sushil Choksey, analyst]

You said that this additional income was visible in the past, will it be visible?

[Unknown Executive]

No. So again, the treasury operation goes with the interest rate scenario, right?

[Sushil Choksey, analyst]

And what is your view on interest rate?

[Unknown Executive]

So based on that exchange rate also are there. So we can't say at this point in time guarantee the same kind of tempo limited yes. But any time the market gives us opportunity, we are there to grab it, simple.

[Sushil Choksey, analyst]

How do you see the TAT of the bank overall improving from where we are today?

[Rajneesh Karnatak, executive]

So we have taken a lot of initiatives to improve the TAT over the last 18 months, I can tell you. So whatever the TAT was earlier and what is the TAT today is definitely much better, I can say government, retail, agriculture, MSME, but also in the corporate credit. But as a top management, we have to take that thing that it can be improved further. So we are doing some of the things in the processes to make the loan application simple to make the process internally at head office more simple so that the TAT is improved even further, not only for the sanction Choksey-ji, but even for the disbursal.

So what we see from the sanction date till the disbursal date, the TAT is also high. So the disbursal is not taking because of which the interest income is not coming to the bank. So that also we are trying to simplify so that the processes and other things so that the disbursal takes place as early as possible after the sanction so that the interest income starts coming to the bank.

[Unknown Executive]

Thanks so much. [indiscernible]. Yes, Rajiv?

[Unknown Analyst]

Congratulations on a good set of numbers. My first question is that the -- while the FY '25 guidance on loan growth is encouraging, I would like to know your medium-term target or where do we see Bank of India 2 or 3 years down the line, where do we see our advanced book and what kind of growth are we seeing given our initiatives that we have been taking on the IT part and all that. And also on the credit cost I believe we have a guidance of 0.7% -- 0.7% for the entire year. And are we on track for that? And how do we see this panning out over the next couple of years, if you could shed some light on that?

[Rajneesh Karnatak, executive]

Yes. Thank you so much. As regard to our strategy, near-term and short-term strategy, see, we have already got a 3-year road map approved from our Board. So a 3-year means up to March '27, wherein we have said that the total book of the bank will look like around INR 18 lakhs crores. So we are at INR 14 lakhs crores at present. So what we plan to touch a figure of INR 18 lakhs crores by March '27, in which INR 10 lakh crores will be deposit and around INR 8 lakh crores will be the advances. That is one number. Another thing which we have done recently in our Board strategy meet is that we have kept ourselves a thing which is called the BOI Star -- at BOI@125. So on 7 September, we completed 119 years of our foundation. So the 125th year will happen in 2031 for us.

So we have -- through the Board approved strategy, we have come out with the BOI@125. So how Bank of India will look in 2031. There also, we have taken a lot of initiatives. Each of the verticals in the bank have given their vision what Bank of India will look like in 2031. Broadly to give you the numbers we are saying that we will have a total business of nearly INR 32 lakh crores by 2031. That is another vision and number which I can share with you and for which each of the verticals have given their presentation and entire data sheet is available with us, how we are going to move it around in quarter-on-quarter basis and year-on-year basis with the first milestone being at March '27 with a total business of INR 18 lakh crores. That is the first part of your question.

Second part is with respect to the credit cost. So credit cost, we have given a guidance of 0.70% for March '25. So that we continue to maintain which will be at 0.70%. As regards the corollary to that is with respect to the slippage ratio, we are giving a guidance since one lumpy account has slipped in this quarter of nearly INR 1,000 crores. We are giving a guidance of slippage ratio of around 1.40% for March '25.

[Unknown Executive]

[indiscernible] Yes, anybody from the [indiscernible]. can we take -- Mr. Deepak Gupta from SBI Pension. Mr. Deepak Gupta?

[Unknown Analyst]

So my first question is -- sorry, I joined in the call a bit late, but I'm just trying to understand the dichotomy that domestic NIMs have declined by 28 basis points on a quarter-on-quarter basis, while we've seen the retail segment doing quite well for the bank in terms of loan book growth, especially personal loans, which have grown by nearly 10% on a quarter-on-quarter basis. So what has led to the sharp decline in domestic NIMs if the Chairman could articulate that?

[Rajneesh Karnatak, executive]

Yes, yes. So we had explained this thing. Actually, you are right that the domestic NIM has come down to 3.14% as against 3.43% in the June quarter. So the basic reason for that was around INR 18,000 crores to INR 19,000 crores of corporate advances got paid off within the 10 days in July. So these were all repo-linked advances wherein the rates were very fine. We thought it prudent to let go these advances because of the very low margins, which were available in those advances and the cost of deposit was also rising during the month of July and August. So that was the simple reason. And to recoup those advances around INR 18,000 crores to INR 19,000 crores, it took some time. In fact, the disbursal started happening from the 15th August afterwards. So only 40, 45 days were available for the interest income on those corporate advances, that kind of book, which was there. So that is one of the reasons why the NIM got impacted -- domestic NIM got impacted during this quarter.

However, this quarter, we are seeing a lot of traction as far as the disbursals are concerned, Sanction is one part, but disbursals are there. And the July month, the disbursals were quite less in the bank because of which the average advances also was lesser in the Q2 of this financial year. But from this quarter, with this busy season happening in Q3 and Q4, we are very sure that the interest income will be much better and the domestic NIM will also improve. In fact, we feel that they have bottomed out and the 2.82% domestic NIM for us is bottomed out.

[Unknown Analyst]

Sure. Just wanted to understand, was there any impact of interest reversal on the...

[Rajneesh Karnatak, executive]

Obviously, it is there. Yes, that goes without saying, see, we had this INR 1,000 crores of NPA happening. So because of that also, whatever the uncharged interest was there, that had to be reversed. And then apart from that, there was another INR 1,500 crores of NPA and some agriculture NPA. When the agriculture NPA happens, the interest reversal is even higher near to 1 year of interest. So all these things contributed to the reversal of interest income and plus the INR 18,000 crore payout, which happened in the first week of July. So that is why there is an aberration in this quarter in the net interest income. In fact, on a quarter-on-quarter basis, it has gone down, which finally resulted in a domestic NIM at 2.82%.

[Unknown Analyst]

Sir, my second and the last question is that the personal loan as a segment has grown very meaningfully on a quarter-on-quarter basis for you. And similarly on a Y-o-Y basis. But we've had most banks reporting a slowdown in the personal loan segment. What is it that Bank of India seeing in this segment? And if they have some perspective of this [indiscernible] INR 11,000 crores of book that you have built?

[Rajneesh Karnatak, executive]

Yes, yes. So this question also I had answered earlier, the question had come, but let me -- your clarification again reply. INR 11,500 crores is the book and it is growing at 40% plus on a Y-o-Y basis. So a lot of guardrails we have placed in the personal loan sanctions. Normally, the [indiscernible] are happening with a CIC score of 700 plus. That is one guardrail. Number two, a lot of these borrowers are having housing loan and mortgage loans with us and the top-up is happening as a personal loan, though the house is not charged to us, but at least some relationship is there with respect to mortgage with the bank.

Number three is that majority of these accounts are salaries accounts where the salary is coming into Bank of India, and we are debiting the installments. So that is one part as far as the guardrails are concerned in the personal loan books. And this INR 11,000 crores plus it also includes the INR 500 crores, INR 600 crores credit card book outstanding, which is there. As far as the asset quality of this personal loan book is concerned, we have an NPA of less than around INR 100 crores, which constitutes -- that is one part. Second part is the SMA 1 and 2, that is around INR 300 crores. So total stress in the personal loan book of INR 11,500 crores is around INR 400 crores, which is in form of NPA of INR 100 crores and SMA 1 and 2, which is nearly 3.4% or 3.5% of the total personal loan book.

And if you see the personal loan book, it is only INR 11,500 crores and it constitutes only 1.9% of our global loan book, and that is quite insignificant also. So we are very much comfortable with the present asset quality in the personal loan book. And the kind of growth is happening is also happening through the digital and physical mode at the branches and a lot of traction we are seeing and majority of these customers are existing customers in which we already are having relationship, credit relationships.

[Unknown Executive]

Thank you very much. Sir, there is another question coming up in the chatbox. It's from Mr. Shreyas. His question is [indiscernible] are strong, but from which customer segment is this recovery coming?

[Rajneesh Karnatak, executive]

Yes. So as far as the recovery is concerned, so I already said that in the noninterest income, there has been recovery from the written-off accounts. Apart from that, we have done some good recovery as regards to the general accounts, which is there. So the total recovery, which has happened during this quarter is around INR 2,800 crores, which also includes a write-off of around INR 1,000 crores. Apart from that, nearly INR 400 crores, we have also recovered in form of the uncovered interest also. So net-net, around INR 2,200 crores we have recovered and it is spread across all sectors, whether it is agricultural recovery from agricultural NPAs, recovery from NPAs, which were MSME, recoveries from the OTS schemes which were retail and also from the corporates. We have at least 3, 4 OTS schemes which are ongoing at present in the bank for different segments for segments which are up to INR 25 lakhs segments, which are from INR 25 lakhs to INR 1 crore segment, which is INR 1 crore to INR 10 crores and INR 10 crores and above.

All these schemes are giving good traction at the field level at different levels of sanction, they are happening. And this -- whatever the recovery has happened, it is agnostic, totally agnostic to any particular credit account, large credit account, and it is spread across the sectors in RAM and also in the corporate -- yes ARBs also. So my idea has prompted me that we have also strengthened the ARBs. So presently, there are around 20 ARBs in the bank. So what we have done is all the NPAs which are INR 25 lakhs and above have been consolidated in these ARBs. And the entire focus of this staff which is placed in the ARBs is with respect to the recovery in the accounts which are parked to these branches and branches now have been freed. They are doing the recovery work, which used to be there earlier. So that is another initiative which we have taken over the past 1 year, which is now yielding results for us.

[Unknown Executive]

Thank you, sir. Another question coming in the chatbox is from Mr. Rakesh Kumar. What is the total provision on central government [indiscernible].

[Rajneesh Karnatak, executive]

Yes. So as per the IRA guidelines, whatever the provision is required, we have already done. It is somewhere between INR 150 crores to INR 200 crores.

[Unknown Executive]

[indiscernible] Next question is question [indiscernible] that has come in the chat. [indiscernible].

[Rajneesh Karnatak, executive]

So interest income accruals. See -- recovery from URI and UCO, which we say is around INR 400 crores, which is INR 4 billion, not INR 2 billion. INR 4 billion recovery we have done in the NPA accounts through interest income.

[Unknown Executive]

Okay, sir. Thank you. [indiscernible] He has congratulated the management for such excellent progress. Bank has not given restructured book [indiscernible] analyst and investor presentation for Q2 financial year '25 as we did in Q1 FY '25, can you just provide the same?

[Rajneesh Karnatak, executive]

Yes, yes, we'll provide you the same. I have clarified today in the media -- this channel interaction also. So we had removed that slide because there was not much change in the outstanding and the book number. So the restructured book for the bank remains the same, let me clarify. But we'll further give the details of that.

[Unknown Executive]

All COVID related, COVID restructuring...

[Rajneesh Karnatak, executive]

Yes, these are all. Same number is there. In fact, I have this March number, which is -- which will again be similar to that. I'll just -- 1 second.

[Unknown Executive]

His another question is can we sustain noninterest income at around INR 1,500 crore to INR 2,000 crores per quarter?

[Rajneesh Karnatak, executive]

We are not having that number, but we will share that number.

[Unknown Executive]

Mr. [indiscernible] the number which you asked for will be shared. His next part of the question is can we sustain noninterest income at around INR 1,500 crores [indiscernible] quarter?

[Rajneesh Karnatak, executive]

Yes, yes. So INR 2,500 crores was the noninterest income in this quarter. Earlier was it was coming at around a run rate of around INR 1,500 crores, INR 1,600 crores. So with the kind of written off accounts, we have INR 45,000 crores of written account and the treasury income that we are seeing. So we will be able to sustain these kinds of numbers. And do we have that number, Prashant?

[Prashant Thapliyal, executive]

INR 1,480 crores.

[Rajneesh Karnatak, executive]

That is the restructured. So our CGM recovery is informing that the restructured book is at around INR 19,000 crores.

[Unknown Executive]

Structuring 1 and 2.

[Unknown Executive]

Domestic restructuring total....

[Unknown Executive]

Standard portfolio is around INR 6,500 crores.

[Rajneesh Karnatak, executive]

INR 6,500 crores is standard asset portfolio under...

[Unknown Executive]

Okay that is then INR 6,700 crores.

[Rajneesh Karnatak, executive]

So the number which you are telling is including NPA. So standard is around INR 6,500 crores.

[Unknown Executive]

INR 6,511 crores.

[Rajneesh Karnatak, executive]

Correct.

[Unknown Executive]

[indiscernible] So if there is no more questions -- how can we leave you?

[Unknown Analyst]

Sir, my just some observation on the -- basically a data point, some explanation on the segment-wise results which we give, which also has some importance because we divide it into the wholesale banking, retail and treasury and has some meaning. In this quarter, I see a very big divergence in those numbers like wholesale from INR 1,041 crores has come down to INR 170 crores profit -- operating profit. And the retail from INR 370 crores, it has come up to INR 1,946 crores. So is there any reclassification or how the segment-wise so much of variance can happen. One is provision that is in the corporate book -- that is -- see because of the from INR 1,000...

[Rajneesh Karnatak, executive]

Kumar, will you be able to clarify. If you want the segment....

[Unknown Executive]

Segment wise profit and maybe operating profit which has come [indiscernible] In the last quarter, in case of wholesale and [indiscernible] INR 1,041 crores which has come down to INR 170 crores, [Foreign Language]

[Unknown Executive]

For the retail INR 1,946 crores.

[Rajneesh Karnatak, executive]

Kumar, can you throw some light on this?

[B. Kumar, executive]

[indiscernible] the same thing was underlined this one that 20% or like which could not able to contain [indiscernible] and the reversal of the [indiscernible] INR 1,946 crores from....

[Unknown Analyst]

One question is that we have got about 35,995 touch points with the customer [indiscernible] large bank with [indiscernible] which can take to the bottom line. Can you throw some light on that, which are the sources, you got year of subsidies also [indiscernible] where we have invested plus we have got such a large customer engagement touch point. Can you give some color on that, that [indiscernible] similar kind of infrastructure [indiscernible] so any particular strategy one has [indiscernible] and what is the road map ahead to take it forward?

[Rajneesh Karnatak, executive]

So as regard the customer touch points are concerned, you rightly said that there are around 36,000 touch points as on 30th September. So which has increased by nearly 1,300 during this quarter. 36 are the branches which we have opened out of which 27 branches are in the semi-urban area. And the remaining are the VC points. So these are all touch points we have introduced in the bank so to engage more with the customers and bring more business for the bank, both on the deposit side and also on the advances side and also from the third-party products. So that is one part.

As regard the third-party business is concerned, so one is the mutual fund. So mutual fund business where AUM was around INR 3,000 crores to INR 3,500 crores as on March '23. Today the AUM is around INR 11,000 crores. So that is the kind of AUM growth we are seeing in the mutual fund, which is our own 100% subsidiary. So there also good traction is seeing and we are seeing that by March '25, this AUM will grow even further. That is one part through which the income is coming. And in fact, as on the October month, this subsidiary also became profitable on its own. So that is one positive thing which has happened in the bank.

The second part is the insurance selling, which is the life insurance. There also, if you see from the third-party products, 60% of the income Y-o-Y increase has happened in the noninterest income from sale of third-party products like insurance. So there also, we are getting good traction by selling our own subsidiary joint venture with Union Bank, which is the SUD Life Insurance product, number one and also selling the insurance products of LIC, which is our prime partner as far as the life insurance is concerned. That is the second part. Third is now we are having from the top management side, a strategy for increasing our credit card business. So that strategy also we are working on and some tie-ups and other things will be happening very shortly. And that also we will be going to scale up in the coming quarters, our credit card business.

Fourth is our BOI shareholding subsidiary in which now we have got the RBI approval for doing the DSA work. So in that DSA work, the work has already started and this is kind of retail growth which we are seeing. So the DSAs are now employed by our BOI shareholding. They are deploying them in various zones and FGMs. Already 5, 6 FGMs offices have already been deployed and zones have been deployed these DSAs and they are giving good business to the bank and their commission is based on the disbursal which happens from the [indiscernible] which they are giving. So that DSA business is also there now, which has started picking up. By the end of financial year, all 13 FGM offices will be covered through this DSA business. So the loan side will get covered.

After that, in the second phase, we will do the liability products like they will be marketing savings and current accounts and also retail term deposit. And in the next phase [indiscernible] products like selling of insurance, mutual funds and Demat accounts and also credit cards and other things. And in the fourth phase, we'll be going for collection also through them, collection for the SMA accounts and recovery in the NPA. So that full strategy we have already made and this will get panned out in the next 18 to 24 months from the BOI shareholding. So all things done there.

So we are trying to make as much profit as possible from third-party products. Apart from that, a lot of work is happening on the IT side through the digital platform, which is Finastra, which is a [indiscernible] platform for supply chain financing. So that will also get enabled by end of March 2025. Once that online happens, a lot of supply chain financing through digital mode will also start in the bank. So all these things taken together, I think a lot of products and other things will coming.

[Unknown Analyst]

In fact it should be known to everyone [indiscernible] the public sector bank these days recently in last 1, 1.5 years, is the most cheapest stocks available. Your book value is about INR 136, INR 137 and you are priced at INR 108, which is still running at a discount where many of the public sector banks are improved plus 2.5 plus book that they are aiming. So you are doing a lot of things. And I think it should be the [indiscernible], you should have a little more interaction with the people and people should know that how much you are doing for the bank.

Sir, 2 things, credit cost target and cost to income for FY '25?

[Rajneesh Karnatak, executive]

Yes. Credit costs, I already said that it will be 0.70 for FY '25. And cost to income, the...

[Unknown Analyst]

Will it come down below 50?

[Rajneesh Karnatak, executive]

No, not in this financial year, not in this financial year. It should be around 51. It should be around 51.

[Unknown Executive]

Thank you very much. As there are no further questions, I would now like request our CEO, sir, for closing remarks.

[Rajneesh Karnatak, executive]

I will only say thank you to all of you who have come physically and also joined for the virtual mode. Thank you so much for being part of this analyst meet, which is there today. And we'll be happy to interact with you on a regular basis. And if any queries there, anything is there, you can outreach to the top management at any time, and we'll be happy to answer all your queries.

[Unknown Executive]

Thank you very much, sir. Thank you very much.