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Bank of India Ltd
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Ladies and gentlemen, good evening, and welcome to Bank of India's Q4 FY '24 Conference Call. I would like to thank all of you for taking out time and joining us today. We have with us Shri Rajneesh Karnatak, MD and CEO; Shri P.R. Rajagopal, Executive Director; Shri M. Karthikeyan, Executive Director; Shri Subrat Kumar, Executive Director; Shri Rajeev Mishra, Executive Director; and other top management team from Bank of India.
[Operator Instructions] I would now request Shri Rajneesh Karnatak, to address the gathering. Thank you, and over to you, sir.
Yes. Thank you, Kejal. Good afternoon to all the dignitaries, ladies and gentlemen present in today's analyst meet. It is my pleasure to welcome you all for the interaction post publication of the financial results of the bank for Q4 FY '24 as well as full year of FY '23-'24.
In the current scenario of ongoing geopolitical tensions and spiraling inflationary pressures, Indian economy navigated the challenges steadfastly and emerged as the new growth engine for the global economy. India became the fastest-growing major economy in the world in '23-'24 for the third consecutive year by logging 7%-plus real GDP growth underpinned by strong domestic demand and backed by robust macroeconomic fundamentals.
Bank credit played an important role in this by registering a growth of 20.20% while deposits grew by 13.5% in the last fiscal year. Against this backdrop, the bank is focusing on sustainable development by achieving its goal through enhanced customer experience. The thrust areas to be generation of low cost resources like CASA and retail term deposits, growth in high-yielding RAM segment, mid-corporate advances, consistent improvement in asset quality, along with slippage containment and improving collection efficiency and NPA recovery.
This is supported by increasing scale of digitization with resilient cyber security measures, robust compliance and governance and also reskilling and upskilling of the staff. In this direction, a few new initiatives are taken. Number one, on the business side, Bank of India Star family savings account has been launched to give privileges and benefits to the customers and their family members.
Number two, to promote green energy emission, our tailored product, namely BOI Star Rooftop Solar Panel Finance has been launched with loans up to INR 10 lakhs for individuals and up INR 100 lakhs for registered housing societies. Number three, tie up with Exim Bank for facilitating cross-border trade under Trade Assistance Programme called TAP. Number four, Bank of India Shareholding Limited, wholly owned subsidiary of the bank, has been mandated to act as a BSA, which is business sourcing agent for our lending products.
On the HR side, number one, initiation of HR transformation project, BOI [ Starlight ], leading innovation and growth with human talent with Boston Consultancy Group, BCG, which will assist in preparing human resources for strategic growth and new age banking. Number two, StarConnect, an empowerment program, [ Star Summer ], a new initiative launched to empower and assist the employees to share career aspirations, goals and other challenges faced by them.
On the IT side, automation of business process under Intelligent Process Automation IPA solution given by Accenture has been onboarded to enhance AI and ML capabilities in enhancing quality business through better underwriting, customer experience and fraud prevention through data lake.
Number two, procurement of cyber solutions for proactive management with focus on detection and containment of cyber risk. Number three, implementation of API-based digital document execution of lockers by using the services of NeSL.
Number four, procurement of Oracle web-based enterprise addition licenses for the AMLOCK AML compliance solution for overseas operations. Number five, introduction of RuPay Bharat credit card for benefits from Amazon, Flipkart, Swiggy, BigBasket, et cetera.
We have published the shared financial results of the bank for Q4 of FY '23-'24 and full financial year '24 on 10th May 2024. The main highlights are as under: On the business side, business -- global business increased by 11.65% Y-o-Y from INR 11.85 trillion in March '23 to INR 13.23 trillion in March '24, with an incremental growth of INR 1.38 trillion. Global advances increased by 13.52% Y-o-Y from INR 5.15 trillion in March '23 to INR 5.85 trillion in March '24, with an incremental growth of INR 69,000 crores.
CASA increased by 7.03% Y-o-Y from INR 2.52 trillion in March '23 to INR 2.69 trillion in March '24, an incremental growth of INR 17,000 crores plus and CASA ratio stood at 43%. Domestic advances increased by 14.08% Y-o-Y from INR 14.31 trillion in March '23 to INR 4.92 trillion in March '24, with an incremental growth of INR 60,000 crores. RAM advances increased by 15.55% Y-o-Y to INR 2.74 trillion, led by a growth in retail Y-o-Y by 18.12%, touching INR 1.11 trillion.
As regards profitability and asset quality, net profit for FY '24 stands at INR 6,318 crores, witnessing a Y-o-Y growth of 57%. Global NIM stood at 2.97% and domestic NIM stood at 3.34% in FY '24.
Net interest income for FY '24 has increased by 14% on Y-o-Y basis to INR 23,053 crores. There has been improvement in the asset quality with reduction in gross NPA and net NPA ratios. The gross NPA ratio stood at 4.98%, improved by 233 basis points Y-o-Y for FY '24. Net NPA ratio at 1.22% improved by 44 basis points Y-o-Y for FY '24.
We are projecting domestic credit growth of around 13% and domestic deposit growth of around 12% for FY '25 with focus on CASA and retail term deposits. The thrust will be on increasing average deposits and advances consistently to increase the interest income and curtailing controllable expenses. The strategy will be augmenting high-yielding advances like RAM, retail, agriculture, MSME and mid-corporate advances, garnering low-cost deposits and maintaining NIM at 3% for FY '25.
By leveraging digitization levels, we will be improving our underwriting standards and further minimizing fresh slippages to bring down GNPA and NNPA ratio. We will continue to strive towards enhanced customers' experience through new digital initiatives for sustainable business growth with focus on robust compliance and governance.
Our bank will be the partner in progress of the nation by contributing in India's vision of Viksit Bharat by 2047 by fostering inclusive growth, increasing stakeholders' value and improving profitability parameters.
I would like to thank you all for patient hearing and joining today. The floor is now open for discussion and question and answers. Thank you so much.
[Operator Instructions] The first in line is Mr. Ashok Ajmera.
Otherwise -- except this higher provisioning, which has dented our profit for the quarter, otherwise, the results are good. The performance is very good and the various initiatives which you have taken will definitely will bring in lot of fruits in coming future. Having said that, the first, sir, what is this provisioning for INR 1,826 crores in this quarter, NPA is INR 2,043 crores, NPA provision. And what was the -- I mean, how the same is increased so much vis-a-vis the last quarter?
Yes. Thank you, Ajmera ji. Thank you so much for your observation. As regards to this provisioning, you are right that we made a provision of INR 2,043 crores in this quarter in Q4. If you compare it with the Q4 of FY '23, the provision is quite higher. That time, it was only INR 546 crores.
However, if you look at, Ajmera ji, our Y-o-Y numbers, so the provision is only INR 4,109 crores on bad and doubtful debts as against INR 3,600 crores. So the increase is only 14% in the provision.
Now coming to your point, what is this INR 2,000 crores and what does it comprise of? So let me clarify here that it comprises of additional provisions, there is some one number of around INR 800 crores, which is due to the aging. That is one provision. Then there is reversal of provision in the PWO accounts to the P&L due to cash recovery, that is around INR 312 crores.
There is one provision of reversal of SR, which is INR 125 crores, and there is some correction of provision in the Srei accounting, which we had done in December. That is to a tune of around INR 55 crores. Then there were certain NPAs because of which the provision had to take place. And we have also done some prudent provision with respect to small MSME accounts and other accounts where we thought that the security is not there and the provision was on lower side.
So we have treated those loans, small loans as unsecured and made full 100% provision. So thereby totaling INR 2,043 crores. So this is an aberration in this quarter. Definitely, the provision will not be high in the ensuing quarter. Definitely, as you rightly said that this provision has dented our final net profit. Otherwise, the net footprint would have been even better.
Finally, we could still show a net profit of INR 6,318 crores, Ajmera ji, as against last year's INR 4,000 crores, which is an improvement of around INR 57 crores of net profit.
So sir, you said some additional provisions has been made. So in the overall bank's book, how much additional or floating provision we are having over and above the IRAC -- provision as per IRAC norms?
No, that number is as per IRAC only, no?
No. I mean, do we have any additional provision in the books of the bank, other than the normal provision which is required?
No, no, no. We are not having any additional provision which is required, whatever the provision is there, that is all as per the IRAC norms.
Okay, sir. My second question is, sir, on this recent RBI guidelines for the higher provisioning on the project loans, which is, of course, at the very initial stage. But I think every bank has done some rough calculations or some ballpark figure can be arrived at that if it becomes effective, then what would be our provisioning requirement, at least in first financial year after its implementation? And how much is the project loan total portfolio? Out of the entire infra and project portfolio, how much is the project loans, which comes under the purview of this circular?
Yes, yes. So this circular of 3rd May 2024 by RBI, in which, as you are aware that we have to submit our feedback to RBI because this is just a draft circular by 15th of June. Our risk department is already working on it. They are doing the detailed calculations.
At this present moment, we have only ballpark numbers. If you see the impact of it, on the ballpark number, it is around only 20% of the portfolio of our infrastructure portfolio and our project funding portfolio on the industrial sector.
It will be around 20% only because it relates -- this circular relates only to those accounts where -- which have green financing, where the COD is yet to be achieved or where COD is recently achieved and this provisioning has to take place for the next 3 years after the COD is achieved. So that -- our portfolio that hit, which is coming is around only 20% of the total book of that. That is one part. The second part is...
What could be that number, about INR 12,000 crores, INR 15,000 crores total?
So that book is around INR 90,000 crores, 20% of which may be impacted under that. That is one ballpark number. As regarding the credit cost is concerned, we have calculated as a ballpark figure. This is a tentative figure only at present that will come to our increase in credit cost will be 10 basis points only.
And that too, as on March 2027, when the third year happens and it is at -- the provision is at its peak. And this 10% -- 10 basis point projection, estimation rather is also on the basis of the fact that our credit growth grows by 10%. So that is on the credit cost.
On the CET1 impact side, the CET1 may increase from 20 to 22 basis points. That is the only impact. And one thing I would further like to clarify that it will not impact the CRAR of the bank because CET1 impact under this circular will not shave off the CRAR of the bank. That is the guidelines from RBI. So this is our submission presently on whatever the working has been done on the circular.
That's good to know, sir. Sir, our treasury has performed well. If you look at the segment-wise results, the treasury profit is INR 1,374 crores, whereas the major hit taken is the wholesale book of the higher provisioning. So going forward, where do you stand as far as the treasury profitability is concerned and the kind of the AFS book, which your are having, though, now the AFS profit or loss, I mean, mark-to-market or profit will not be taken in the P&L? But what -- can you give some color on that on the treasury performance in the coming quarters, sir?
See, with the new RBI circular, Ajmera ji, what we think is that treasury will transform into a NIM center rather than a profit center. So this is our clear understanding because of the new RBI circular. So whatever the profitabilities bank used to get because of the change in yields on a higher side or a lower side, that will not much be available to the banks henceforth. So it will be more of a NIM center rather than a profit center. That is what I can say at this juncture.
Next in line is Mr. Jai Mundhra.
Can you hear me?
Yes, sir.
Yes, we can hear you, Jai ji.
Sir, my question is, last quarter, actually, we had a negative -- wherein margin declined in third quarter and fourth quarter, we have seen higher slippages, right? So I mean what is the reason for the higher slippages this quarter? Could this be a new normal for the bank? Or what are the key reasons for rise in agri, SME and corporate slippages this quarter?
Yes. As regards the slippages are concerned, if you see the slippages in the Q3 -- Q4 of FY '23 was INR 2,625 crores. That is in our presentation also. In this quarter, the slippage has been INR 2,038 crores. Though the slippage in this quarter, Q4 of this financial year have been lower than last year, still but it is INR 2,038 crores is still on a higher side because we had shown a fresh slippage of only INR 1,313 crores in the Q3 of FY '24.
So it is higher, definitely, we agree. But if you see on the Y-o-Y basis also, Jai, our slippage in last year FY '23 was INR 7,969 crores. And in this year, total aggregating for 12 months, it is only INR 7,551 crores, which includes fresh slippage and debit in these accounts.
So further breaking down, as you asked, what is the breakup of this INR 2,000 crores of fresh slippages. So if you see there is in the presentation also, 70% of this slippage is in agriculture and MSME only. And remaining INR 440 crores is in one of the large corporate accounts, which is there in Odisha and another state government account in Punjab.
Let me tell you that there is INR 300 crore plus account which slipped to NPA in Q4 in Punjab. Out of that, INR 65 crore of overdue has been recovered. Another INR 65 crores will be recovered within next 10 days, and this account will get upgraded. So this INR 300 crores will get upgraded out of that. So we are cognizant of that, and we are trying to minimize the recovery.
However, if you see our SMA numbers. So SMA number, which was INR 16,900 crores, above INR 5 crore number as on March '23, it has come down to only INR 7,100 crores as on March '24, and which is only 1.28% of our total standard loan book.
If I further give you a color on this number of INR 7,000 crores, out of that, there are 4 accounts of INR 4,400 crores of state government of Telangana accounts. If you remove them, so then our SMA INR 5 crore and above is only INR 2,600 crores, which comes to only 0.47% of the total standard book. So we are very confident that this quarter has been an aberration and definitely moving forward in Q1 and Q2, the slippages will be considerably less than what has been in Q4.
Next question is from the line of Mr. Rakesh Kumar.
First question, sir, just a continuation of the last question. You were saying that in Q1 and Q2, slippage would be reasonably less. So could you quantify that figure, sir, how much less and what will be the number?
Yes. So if you see -- if you see our slippage ratio for this quarter, you must have seen in our presentation also that the slippage ratio has increased considerably. So it was 1.94% in March '23. It has come down to 1.58% in this March '24. So we are very confident that for March '25, it will be considerably lower, and we are giving a guidance of around 1.20% for March '25 as far as the slippage ratio is concerned.
Okay. Sir, in the SMA1 and SMA2 in the agri as on December was INR 259 crores. And what was the slippage in this quarter, sir, in agri?
In agri, the slippage you are asking?
Yes, sir.
Yes. So in agri, the slippage -- net slippage was INR 626 crores.
No, no, gross slippage, sir, gross slippage in this quarter from agri, sir?
Gross slippage was INR 1,021 crores.
And the SMA1 and 2 put together is INR 260 crores, sir, December, correct, sir?
So SMA1 and 2 is for INR 5 crore and above accounts in the presentation. So this slippage is a global slippage, which includes all accounts, even our INR 10,000 account comes under that. This is final slippage.
So what would be the SMA, sir, in the below INR 5 crore account, sir, in agri currently, sir?
So that will come back to you separately. Presently, I'm not having this number because I'm having the presentation only with me. We'll come to -- back to you for this separately.
Next in line, we have Mr. (sic) [ Ms. ] Mahrukh Adajania.
Sir, I had -- sorry, but just to harp again on slippages. Sir, what -- I know that year-on-year, every fourth quarter, there may be high slippages and you also explained earlier on that in September and March, there's seasonality and slippages generally tend higher in agri and maybe even in MSME.
But this time around, the Q-o-Q growth in MSME and agri slippage is much higher than the last few years. So what really drove that? I mean, why is it that seasonality is sharper in the fourth quarter this year? And also -- so that's my first question. I'll ask the next question later after this.
Yes, yes. So you rightly observed that there has been more slippage in agri and MSME in the last 2 succeeding quarters, in December quarter also, in March quarter also. That is because of the fact that there is some stress building up in agriculture and MSME saw typically small ticket accounts. As you have heard the previous question also, why this above INR 5 crores is not reflecting here because these are all small accounts where the slippage has taken place. That is why it is not showing up in the presentation.
So they were -- they are typically those accounts which are small accounts and obviously less than -- very much less than INR 5 crores, they are less than, in fact, less than 50 lakhs kind of accounts. So there is where the slippage is. And in agriculture, there are a couple of states every quarter seasonally, a couple of states show stress and NPA in agriculture. This time also, there were a couple of states where agriculture NPA came out larger in numbers than in other states.
Okay, sir. And in terms of provisioning, you mentioned a lot of breakdown. So what was the Srei portion? And are you certain that in the first quarter, a lot of the agri and MSME slippages will revive in the first quarter as in that they will be upgraded?
Yes, yes. So we had a VC on Friday also with our field people, our FGMs, 13 FGMs and zonal heads, and today also we had a meeting internally at the top management level. So there are 2 pieces to it, Mahrukh. One part is that the fresh slippages have taken it in the -- mostly typically in the March month of FY '24. And the other is the slippages which are taking place here after 1st of April.
So we have sensitized the field. Now they have started working in upgrading of these accounts. So whatever the amount has to be recovered, overdue account, they will be recovering and upgrading these accounts. So we are expecting a good upgradation happening from the slippage, which happened in March also and whatever slipped after post of March, that is from 1st of April.
Okay. And the Srei provision, you said there were some extra on Srei. So...
So it was not extra. It was a correction in provision of Srei of INR 55 crores, which was a difference which was left out last quarter. So this INR 55 crores has taken -- was taken care in Q4. So everything is taken care in Srei now.
Next in line, we have Mr. Sunil (sic) [ Sushil ] Choksey.
Congratulations for very stable numbers by one event, which is not in your hands. My first question comes from your TV interview where you spoke about credit growth -- credit pipeline already visible. Can you elaborate that a little bit?
Yes, yes. So as regards to our credit side is concerned, you are aware that we have touched INR 5.75 trillion on the credit number with a growth of around 13%. And Sushil ji, if you see our domestic credit number, there, the growth is more than 14%. So for the guidance also for FY '25, we have given a guidance of 13% to 14% of global credit growth.
Presently also, we are having, as I told in my TV interview, that a pipeline of nearly INR 50,000 crores we are having as on 31st March '24, out of which around INR 38,000 crores is with respect to corporate credit and around INR 12,000 crores with respect to the RAM credit in typically in retail and MSME.
So this will get -- be disbursed in the next ensuing 2 quarters in Q1 and Q2. And within that, there is a healthy pipeline with respect to -- we have pipeline in infrastructure with respect to power also green power. In solar, we have; in wind also, we are having; and then some of the thermal power plants are also coming for refinance. That is also there in the pipeline.
Then the steel industry, textile is there, pharmaceutical is there, chemical is there. Oil companies also sanctions we have given. And about from that, I would say that the retail and agriculture good growth is having Y-o-Y growth. If you see in the retail side, our growth was around 18% on this one -- this agriculture, it was 18% -- 16% and in the MSME, it was 10%.
And we have also adopted these cluster-based schemes. From there also, we are getting good traction in the MSME. Apart from that, under the PLI scheme also, we are funding Gati Shakti also, there are road projects which are coming, which we are funding. So all in all, we are seeing a broad-based credit growth coming not only from the RAM sector but also from the mid-corporate and large corporate sector.
And Sushil ji, one thing more we would like to tell that apart from the 9 large corporate branches, we are also having 18 emerging corporate branches across India. So these 27 branches of our branches in corporate credit are sending us and marketing the proposals with respect to INR 50 crore and above corporate credit. So we do not see any challenge as far as credit growth is concerned.
Your processing and ability speaks for the volume. So I don't want to elaborate on it. But we have signed up with REC, PFC, IREDA and various other organizations. Are we doing some kind of a joint lending program or it's a downsell which is more happening underwritten process by them?
No, the agreement that we have, MOU which we have signed is only with the REC. There also, we are very selective on the projects which we will be taking. So it is not a downsell. It is a joint lending whichever we are doing. So we are open to all things. We are open to all syndicates also which are happening. So we are also open to syndication teams which are there from HDFC, ICICI, Axis Bank, SBICAPS, apart from REC, PFC, et cetera.
And my next question is India is getting included in various indices on the global market where the bond market is concerned and this will have a huge impact on not only money market but also in FX market. Being a leading institution with global presence, how are we capitalizing on this opportunity, which we may have starting July for domestic trading as well as FX and participants whom we can capitalize as our customers for future?
Yes, that is -- the opportunity is there, as you rightly said. We are keenly looking into that. Our domestic treasury team and the international treasury team is closely watching it. Though there has been some shrinkage of the margin as far as the ForEx derivatives are concerned because of the high interest rate in the overseas market. But definitely, we also feel that with the softening of interest rate, this market will come back, and we'll be able to make some money in those ForEx derivatives also.
My question was more pertaining towards your participation, linkage with investors who are coming to GIFT City or there may be a huge inflow of FX as well as depository participants or participation via bond market, where our government security SLR and holding is concerned, I was looking from that direction because besides your corporate credit, treasury can have a super profit. At the same time, retail can grow on a sustainable basis.
Yes, that our GIFT City is already looking into it. Some products we are contemplating for having in the bank for which we are already working on.
Sir, the next question, we've got a text via Mr. Jai Mundhra. His follow-up question is, can you give some guidance on FY '25 loan growth, NIMs, credit cost and ROA?
Okay. Credit cost, I have already explained the credit cost part, we are saying that we'll have a credit growth of around 13% to 14%. That is on one part. As regards NIMs are concerned, so NIMs, if you see our NIM has gone down from 3.01% to 2.97% as on 31st March '24, though we have protected the NIM in spite of the tight liquidity position, which is there all around in the market and resources is a challenge. But still, we were able to protect the global NIM at 2.97%.
As far as our domestic NIM is concerned, the domestic NIM was 3.34% in spite of the fact that all tight position was there in the domestic market also. As regard guidance is concerned, so on the global NIM side, we are giving a guidance of around 2.95%. And on the domestic side, we are giving a guidance of 3.30% considering the fact that in the near term, the liquidity tightening will be there, and we feel that July onwards, the liquidity tightening would ease and maybe the rate may come down by the end of this calendar year.
As regards ROA is concerned. So ROA for us, ROA is now 0.70% as against 0.49% as on March '23. So as regards the guidance is concerned for March '25 specifically, we are very much hopeful that we will be able to reach the ROA of around 0.90%.
Next in line, we have Mr. Ronak Daga.
So the question from my end is that you had lower standard asset provisioning in FY '24. So can you elaborate on the same?
Yes. Lower standard asset provisioning?
Yes.
Yes. so this standard asset provisioning, which was there earlier, that was mainly because of the 7th June circular, which we had to do. So if you see the standard asset provisioning, which was there at INR 2,354 crores for the 12 months, March '23, has come down to INR 162 crores -- minus INR 162 crores.
That is because whatever the accounts we had to provide because of the 7th June circular, these all accounts were showing standard regular in performance and SMA 0,1,2 stress was not there. So with the discussion with the auditors and others, we have taken out these provisions in the standard book. This was typically all because of the 7th June circular in certain accounts.
Okay. And sir, what will be the number in FY '25?
Yes. Come again, please?
Sir, what will be the standard asset provisioning in FY '25?
So we do not see much of provisioning here because all the accounts presently in none of the accounts as we speak, such kind of SMA 0,1,2 is happening. So none of the accounts also has been flagged by any of the auditors or anything. So we expect a minimal provision to be there in the standard asset as on March '25.
Okay. And sir, what will be your slippage guidance for FY '25?
So as regards the slippage guidance is concerned, so slippage ratio, if you see in our presentation, presently, we have given a slippage ratio of around this one, 1.58% as on March '24. As regards to the guidance, we'll improve our collection efficiencies and the guidance would be at around 1.20% for March '25.
[Operator Instructions] Next in line, we have Mr. Ashok Ajmera with a follow-up question.
Sir, what is our total TWO book or ACA book, what is the overall aggregate figure? And how much do we expect to recover in FY '25 from the total book of?
Okay. So INR 43,000 crores is our total TWO book.
Okay. And generally, how much...
[ Total ] book is around INR 40,000 crores, yes.
And how much do we expect to recover year after year or say, in FY '25?
Yes, yes. If you see our figures for this financial year, we had recovered INR 7,500 crores which is less slippage and debits in the existing NPA accounts. So cash recovery against this was INR 6,305 crores through cash recovery and upgradation. Plus there was also some recovery done in the return of accounts during this financial year. This year also, we plan to have a better ratio than this.
Internally, if you see, we have given a guidance to our on-field functionary, whatever the fresh slippage happens, 2x of that we need to recover as a total recovery. So that is the guidance under which we are working in the field level. So whatever the recovery which we had in this financial year of INR 6,300 crores plus the recovery and written off, definitely, it will be better than that.
Okay. Okay, sir. And on the whole -- on the technology front, sir, we have been talking for last 6, 8 quarters. We have been spending also good amount of money on the technology, even -- I mean, the discussion is going on for the last 2, 2.5 years, 3 years.
But finally, how many like such verticals which were planned and have been completed and put into the practice? And what is the advantage of this technology upgradation so far, we are getting quarter after quarter or year after year? Can you little bit elaborate on the total technology development and the expense and the budget now planned?
Yes, yes. So Ajmera ji, as regards our technology part is concerned, so we had a budgeted number of INR 2,000 crores for financial year '23-'24. Against that INR 2,000 crore of budget, we have already spent 75% of this budget as on March '24.
Within that INR 2,000 crores, we have splitted into this CapEx and OpEx. In OpEx, the expenditure budgeted was around INR 1,200 crores. And for CapEx, it was around INR 800 crores. So -- and 75% of that has already been spent. So that is the broad numbers that I'm giving you.
Apart from that, what are the benefits which have accrued to the banks. So definitely, there are many benefits which have accrued to the bank. One thing I would like to say that we have already started a data lake project also under Accenture, which will be giving us a generative AI, AI and ML. So that is one thing which we have started and we are expecting that by Q3 of this financial year, that number will start coming in. So that is one part.
The other part is with respect to the digital banking landscape, which is there. If you see our numbers on the digital lending side, I would just share that number, which is on Page 31 of our slide. So 7.5 lakh of loans, retail loans, whether it is retail, agriculture, MSME have been sanctioned on the digital platform.
These are personal loan, pension loans, vehicle loans, gold loans, Kisan Credit Card, SHG Mudra loans all the 3, Shishu, Kishore and Tarun. So this 7.5 lakh of loans which have been sanctioned on the digital platform, the amount aggregating is around INR 15,000 crores for this financial year. So apart from that, 35 new projects will be -- products will be launched in this financial year, FY '25.
One more thing I would like to tell is under the digital platform, another thing that we have done is that renewal of small Mudra loans which is taking place through the automated mode. So what has happened is that branches are now free from doing the renewal in these small digital loans from these small Mudra loans. And it is getting renewed under the digital format. And so, so much of operational efficiency and saving of time at the branch level officer has happened in the bank level.
Apart from that, you are aware that mobile app also we have launched with 300-plus features. Another thing which we have done is that Wipro is working with the bank very closely for giving supply chain finance project and also some product on the cash flow -- this management of cash flow.
So all these things taken together, definitely in the next 12 to 18 months, a lot of digital and IT transformation will take place in the bank, which will further help us improving our operational efficiency and showing better profitability.
And sir, the last question is, sir, like every other bank, we were also trying for last 2, 3 years to have some good co-lending franchise -- franchisee. So have you made some major breakthrough on that? And what is our co-lending pending total overall portfolio and the kind of returns which we are getting?
Yes, yes. So as regards co-lending and pool purchases, there, we have already 7, 8 partners, which are there. So aggregating, if I tell you the ballpark book, the book is around INR 4,000 crores as on March '24, co-lending and pool purchase together.
And the kind of IRR or returns a little better than -- I mean, in what range are we getting on this?
IRR will always be better in this one co-lending and pool purchase because there is not much of operational cost involved over there. So if INR 4,000 crores of RAM sector loan we have to do, entire 5,100 branches would have got involved in doing small, small retail MSME and agri loans. But here at one single branch, everything is getting place. Only 5, 7, 8 staff is there. And the entire thing is going through a digital platform seamlessly. So definitely, operational cost is less, and definitely, the IRR is much better over there.
Next question we've received in the chat from Narendra. His question is what would be our guidance on cost-to-income ratio?
Yes. As regards cost-to-income ratio is there, March '23, we had a cost-to-income ratio of 51.08%, which increased to 51.73% in FY '24 for the simple reason that the employee cost had also gone up because of the wage revision and the full impact of it up to March -- 31st March 2024, we have taken, both on the employee number side and also on the AS-15 side. So for the guidance, as regards the guidance for March '25, we are saying that the cost-to-income ratio shall be around 51% 5-1.
Last in line, we have Mr. Ronak Daga with a follow-up question.
So sir, what will be the tax rate in FY '25?
What would be the...
Tax rate?
Tax rate. Yes, Kumar?
It will be 25%, it has already been migrated to new tax regime. So we'll continue to maintain the same tax rate, sir. 25%.
So we have already migrated to the new tax regime, Ronak, on September '23. So the new tax rate for us is 25%. That is the rate that will continue.
Okay. And the last question would be, what would be the impact of the new guidelines on investment classification and valuation, which has become effective from 1st April?
Treasury. So if you want to...
Yes. Sir, basically, the volatility in the G-Sec portfolio, especially the investment portfolio, will reduce because the shifting is no longer allowed. So we'll be focusing more on interest income as far as the HTM portfolio is concerned. However, it will give us an opportunity to have a medium-term view in the rating portfolio where the removal of that 90-day ceiling will help us hold on securities for a longer period from the trading perspective.
So more focus on increasing the interest income and view based trading. So both ways, we don't see overall income will not be impacted. But volatility in the -- because with every interest rate cycle, the capital gains booking will come down.
Thank you. With this, we would conclude our analyst call. I would now request Shri Rajneesh Karnatak for his closing comments.
Yes, Kejal, I would just like to clarify on behalf of the bank, 2 points to all our analysts who are there. So I was expecting some question on that, but it had not come because some of observations were coming in the press also with respect to our noninterest income and the operating profit, which is there.
So I just want to clarify further in detail. So as regards noninterest income is concerned, we had a quarter-on-quarter reduction in the noninterest income from INR 3,099 crores in Q4 of '23 to INR 1,751 crores in March of '24. Y-o-Y there is a reduction of 43%. So however, we would like to clarify that in Q3, Q4 of March '23, there was one-time income of INR 1,646 crores on the SR side, which were booked under the profit from sale of revaluation of investments. So that was a onetime book entry, which was there.
If we net it off, so last year's noninterest income was last quarter's, Q4 of FY '23, this income was, noninterest income was only INR 1,453 crore, netting it off. So actually, there is a growth of 20% on the noninterest income side on a quarter-on-quarter basis.
As regards the Y-o-Y basis, noninterest income, if we net off this INR 1,646 crores from the total noninterest income of the year of FY '23, the net income from INR 7,100 crores comes down to INR 5,454 crores. And this year, we have shown an income of -- noninterest income of INR 6,095 crores, which is an increase of INR 641 crores. So instead of a negative of minus 14%, our noninterest income, in fact, has gone up by 11% if you remove that one-off item, which was a book entry, which was there in the last year.
Similarly, on the operating profit side, so operating profit, if you see in our presentation, in Q4 of FY '23, it is INR 4,184 crores. Again, this INR 1,646 crores of SR impact, which was there in book entry last year, if we net it off, the operating profit for last year Q4 was INR 2,584 crores. And this year, we have shown an operating profit of INR 3,557 crores, which means an increase of INR 973 crores. So as against the presentation, which is there at minus 15%, after netting, we have an increase of actually 37% in operating profit on Q-on-Q basis.
Regards Y-o-Y basis, we had shown last year INR 1,393 crores of operating profit. If we net off that onetime entry, which was of the SR of INR 1,646 crores, the net operating profit was INR 12,353 crores. And this year, since we have operating profit of INR 14,069 crores, the increase in operating profit is INR 1,716 crores for Bank of India. So as against 5% which we have shown in this slide, if we net of this SR number, which is an accounting number, actually, our operating profit has gone up by 13%.
So on both the sides, net noninterest income and operating profit, the numbers were actually high, but due to one single entry on the book side -- on the accounting book side, we had to show a lower operating profit and the noninterest income. So this is one clarification I wanted to give before we close this analyst call. Thank you so much from Bank of India side, and thank you all for joining. Thank you so much.
Thank you, Rajneesh sir, for the detailed explanation. Participants, on behalf of Bank of India, I now announce that this conference is concluded. You may disconnect. Thank you very much for joining us today.