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Indian Bank
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Good afternoon, everyone. We have with us today, Indian Bank MD and CEO, Mr. S.L. Jain, Shri Imran Siddiqui and Mr. Ashwani Kumar for the Indian Bank's second quarter post results con call.
I would request, Jain sir, first to brief on the results that we had in the second quarter and also provide some outlook on the growth margins and asset quality. Also, I would request, sir, to discuss about the standard of asset provisioning norms, which have been implemented and been enforced on a lot of public sector banks in the recent past. And that has been talked about by a lot of public sector bank managements during these calls. So I would request, sir, to touch upon that point as well.
Over to you, sir.
Good afternoon. Welcome to all analysts and investors in the post results second quarter's. So as far as business of the bank is concerned, we have grown by 10% on a Y-o-Y basis. And our business deposit, we have grown by 7%; saving deposit, we have grown by 7%; and our current deposit, we have grown by 9%. So CASA, we are maintaining 41%. In the credit side, we have grown by 14%.
So the credit -- in the RAM sector, we have grown by 13%. Under that RAM: retail, we are growing 14%; agriculture, we are growing 15%; MSME, we are growing 9%; and corporate, we are growing 6%. And we are having the RAM share of 62%, which has improved from [ 61.2% ]. So the RAM share is a time area of growth.
This is the business number. If you see the profitability number, our NII has grown by 15%. Our operating profit has grown by 11%. Our net profit has grown by 12%.
In addition to NII or other incomes: that the fee-based income has grown by 18%; our ForEx income has grown by 171%; and PSLC incomes increased. So excluding the treasury impact, our other income has grown by 7%. So NII, 15%. Other income net of treasury, 7%. Operative expenses have grown by 4%, resulting increase in operating profit by 11%. And provisioning, since our asset quality is improving. So the net profit has grown by 12%. If you see the pretax profit has grown by 116% or so.
Now coming back to the asset qualities, our asset gross NPAs have come down from -- to 7.30% and net NPA to 1.5% from the 2.12%. The reason being cost slippage was around INR 2,300 crores, and the recovery was around INR 3,300 crores or so. Under slippage, basically, in the INR 2,300 crores, around 45% of slippage comes from the agri and around INR 400-odd crores is from the restructured book.
The slippage from the restructured book is coming down, which was around INR 1,400 crores in March than the June INR 1,000 crore, and then September, it is around INR 400-odd crores. So that -- now that restructured book is you can see it performing well.
As far as the capital part is concerned, we are at 16.15%. And if we add 6 months profit of INR 2,400 crores, it must come to 16.92%, close to 17%. So bank is adequately capitalized.
Look, coming to your specific questions about the margins and on. Last year, margin was 2.91%. In the first quarter, it was 3.10%; and the second quarter, it's 3.20%. The repo increase of 190, 140 has been passed on during the quarter ended September and 50 bps, which was announced in September will be passed on this current quarter.
As far MCLR is concerned, if you see from 1st April till today -- or MCLR -- 1 year MCLR, which is a major increase from 7.3% to 8.10%. So around 80 bps MCLR increase we have done.
If you see the deposit rates from say, 1st April till today, we have increased the deposit rate in various buckets. So it is from 1.1% to 1.4% in the range of various buckets. So that -- since 41% is a CASA and 60% is a term deposit, so on an average, 130 so you can see 60%, 78 to 80 bps we have passed on as a part of MCLR. So considering this and also considering the fact that interest rates are tightened in the markets, so we are of the view that we should be able to protect our margin at around 3% to be on a conservative side. This is the margin.
Now regarding the provisioning of standard assets and others, we are governed by the RBI guidelines and material of the RBI guidelines. And whatever has been told by the RBI through inspections and all, we have fully compliant. So this is where we stand today.
In addition to these number, bank is working very hard on digitizations. So in digitization, we have launched various journeys, whether it's a preapproved personal loan or sell lead, whether preapproved personal loan for professional and self-employed, loan against FDR, then the Mudra Loan, then the KCC renewables, then our insurance products, all we are giving through mobile banking.
And bank is totally focusing on digitizations. So mobile registration, which as around 5,800,000 a year back, has crossed 1 crore 2 lakhs. So since all these products we are offering through mobile banking, so mobile -- the bank is totally focusing on increasing the mobile activation. So you see 76% rise. Likewise, the Internet banking has also increased. And the digitization, which was around 70% a year back, has grown to 82%.
So in addition to this customer-friendly journeys, we have also rolled out the performance management system in the bank. We are -- the KRAs of each and every officer will be trade based on the targets given by. So it will give the productivity increases going forward.
In digitalization, in addition to this, we are doing a number of other things as well, whether it is middleware so that we'll be able to have API integrations and horizontally we can grow because with the API integration we can grow your main business. As omnichannel, we are also doing -- we have also onboarded the lending platforms so that we will be able to come out more and more customer-friendly journeys in the time to come.
We are also working on the trade finance model where we will be able to offer customer-facing services so as to have better customer experience and to increase our income.
Now, I am open for question-and-answer. And with me both the executive directors and the top management team here.
Yes. Sir, thank you for touching up on all the points. So particularly on the margins before we take the Q&A. I think that is one very important aspect that we have seen across public sector banks that some of the banks have seen very strong margin uptick during the current quarter. But the uptick that we had seen in our bank was related to moderate versus the peers. So any specific comments over there?
So margin, of course, 15%. But you see this year, this quarter, out of INR 2,300 crores slippage, INR 1,059 crores slippage is on agri. In agri, what happens in the KCC, which is a long time to classify account because there's not the duration of account. So that is an interest reversal of around INR 260 crores, whether interest reversal has happened on this account.
In addition to that what we have done, we have also done interest reversal for the restructured account from moratorium period interest, which has been capitalized as for the then guidelines, then also we've reversed. Because of these two, the NII growth, which is appearing 15%, or directly. But this is as per the RBI guidance in total.
Yes. Thanks, sir. Now we open the floor for Q&A. First question we have from Mr. Ashok Ajmera.
Sir, complements for yet another good quarter for the bank which -- I mean, the overall financial position of the bank, you have managed very well, along with the given asset quality and most of the -- the ratios and the figures are within the given guidance and parameters.
Sir, having said that, my first question or rather some information required on the overall treasury operations, though segment-wise, there is an income of INR 1,441 crores deposit in the treasury. But overall, if you look at it and with this rising interest rate scenario and now with this Fed increasing 70 basis points, again. And maybe RBI also now accordingly will match it maybe 50, 60 basis points going forward. What are your views and observations are on or your comments on the overall treasury operations of the bank, sir, including the money which you are making from the foreign exchange transaction, sir?
So our investment book is around INR 1,84,000 crores, right. So 25%, obviously, is in the HFT and AFS book. Here, you see what we have done, we have churned out the portfolio, the treasury bill which was around INR 9,500 crores has come down to INR 4,500 crores. So INR 5,000 crores of our amount we have churned out and invested in the central government or state government securities, where the yield is better. Because our -- what we are doing is wherever the yield is more than 7.5%, we are increasing our portfolio. But it is less than the 7.5%, we are selling.
That way we are doing last quarter. So we have made a profit of INR 125 crores as well in the last quarter even in this volatile time. So this is the one way we will continue to have that kind of a strategy. And in this process, what happened our yield has also improved in the overall treasury book as well as this is HFT and AFS book.
In the ForEx, we have from the last 6 to 8 months from last 1 year, you will see that ForEx profits has continuously increasing by 171% or so. So there are opportunities in the ForEx market, first point. Second point, we are in the city operation. Third point is, very active in the merchant turnover in the derivative markets. So on your ForEx desk, we have made it active, and as a result, you have seen that whatever is the losses -- whatever is the decline in profitability because of the treasury -- because of the market, mostly we are covering through our ForEx operations an all. And that is why how we are managing, and we'll continue to do so because still the margins are available in the business.
But sir, with the liquidity being sucked by the RBI majors, are you getting some pressure on the liquidity side because some of your money has got blocked in this ForEx forward premium and other things. So will it continue? Or do you price -- do you -- are you observing any pressure on the liquidity side, sir?
No, see, the liquidity side, we are comfortable, our LCR is around 142%, this is one point. Second point is that the way the liquidity has been tightened, both side we are increased in the rates. So either the deposit side and the advanced side and maintaining our margins. Of course, the liquidity has been tightened. So as a result what happens, the short-term interest rates with increase. But simultaneously, the yield is also increased and we are the intermediary. So still we have opportunity to do bank money.
Coming towards territory side. Sir, how comfortable we are as per the target given for the overall recoveries and recovery from return of accounts? And what is the development on the NCLT front, and also, NARCL front? How much accounts are going? How much money is going because now NARCL has become very active. So I think any color on that, latest position on that sir, on the recovery and NARCL -- accounts going to NARCL?
So -- but whatever is the beginning of the year, we said that our recovery will be around INR 8,000 crores. Right? So in 6 months, our recovery is INR 4,438 crores, which was out to around 55%. So in the half year, 55%. Remaining, we'll be able to achieve. Likewise, in [indiscernible] recovery, which we call PWO recovery, is around INR 1,600 crores of our targets, as against INR 1,000 crores we are at INR 890 crores or close to INR 900 crores. We are again 55%. So target vis-a-vis achievement, we are better than this.
So going forward, since we are recovering around INR 2,000-odd crores every quarter, we'll continue to do so. And from where we are getting strength because we are still having INR 24,000 crores of account on NCLT. We are giving a compromise pipeline. We are having NARCL as well, and we will do surplus. And last quarter also, we have done 58,000 number of compromises against 39,000 in Q1. So that way, we are focusing on this.
As far as NARCL is concerns, sir, around INR 5,400 crore of account, these are interest, which is around 21 accounts. And in the 4 accounts, we are at advanced space where the amount is around INR 500 crores. So we will be getting around 25% or 30% of that account because this swift challenge will happen and when the exact price come out.
You are telling that big 6 will challenge company also were as against 234, I mean, 500 -- some 430 at are something has come from Phoenix. Are you there in that account?
Yes. We are there in that account.
Just a couple of observations, sir. On your notes to the accounts, Note #15 under the COVID-19 framework, the outstanding is INR 18,422 crores, and NPA slipped is INR 1,190 crores and recovery is also around INR 1,163 crores. So INR 16,000 crores is still outstanding there. What is your guess on that, that if you look at the same proportion of the recovery and the NPA in slipping, I mean, it is almost equal so far. So going forward, out of this INR 16,000 crores outstanding, how much do you think will slip to the NPA?
So you see the INR 18,000 crores, basically 2, 3 big accounts, the future group and all accounts there will be restructured and they will see. And that is why these NPA numbers are showing higher. If you see the reality, how much has been slipped in the March quarter? How much in the June quarter? And how much in the September quarter? So September quarter, INR 463 crores, is against the June quarter of INR 1,094 crores. So it has come down 50%. And prior to that, last year, it was INR 1,705 crores. That is a future group and all. So when the slippage is coming down from the restructuring, it gives us a standard that the remaining accounts are standard and will continue.
Okay. But last is on Note #17, sir, under the prudential framework, INR 780 crores out of that provision that is a write-off, is the non-fund base amount out of total of INR 16,017 crores. So how much more is the non-fund base is there because that is as good as totally going, I mean, slipping?
Ajmera, sir, but it's the RBI guideline. RBL guideline said that as per the 7, June '19 circular, you have to make 35% provision on the exposure. So exposure includes your fund base and non-fund. So the number which you are telling is the INR 780 crores is a non-fund, where we have made a 30%, 35% provision.
Okay. So total will be INR 2,000 crores non-fund. I mean, if it is 35%, our entire non-fund is provided for.
INR 1,780 crores, 35% of which has been provided.
All right. So it's still -- I mean, some amount still left there.
What happens is 3 years current -- accounts are standard, sir. Accounts are standard so this is going on. So guarantees are which we currently suppose you've given guarantee for 1 year, 2 years, 3 years it will continue. And the guarantees are against performance, guarantees are against bid world. You can't say the entire will come.
Next question, we have to Gaurav.
Congratulations on very good set of results. Sir, firstly, on the asset quality, whatever numbers we have disclosed, they seem to point a very good healthy underlying recovery in all the assets that we own. But sir, 2, 3 quarters back, we used to disclose the SMA 1 and SMA 2 for the entire portfolio, which we even changed to an above INR 5 crore book. And it would be very great for all of us to understand how the recovery or how the performance of that portfolio is moving, which is below INR 5 crore book. So if you could share SMA 1 plus 2 the combined figure or individual figures for the entire book, that will give us a lot of comfort.
So actually in line with the industry trend, we have started showing this INR 5 crores and above. But you see, we are also showing the collection efficiencies. So collection efficiency is at 95%. So from then also you can make out because we are saying the collection efficiencies separately for retail, agri, MSME and the corporate. But in fact, this number ha come down from 0.61% to 0.5%.
Sir, what is -- what has come down from...
This INR 5 crore and above SMA 1 and 2, which was around 0.61% in the June quarter has come down to 0.5% in the September quarter.
Yes, sir, that is for the above INR 5 crore, right, which you have anyways disclosed. I'm talking about the below INR 5 crore, which was INR 18,000 crores at the end of December 2021. So any subjective indication would be really helpful, whether this INR 18,000 crores has moved to INR 15,000 crores? Or it has been the same or it has gone to INR 20,000 crores?
When the collection efficiency is improving, it should come down, sir.
Okay. Great. And sir, on the provisioning side, the current run rate of around INR 2,000 crores, INR 2,200 crores, do you expect this to continue for another 2 quarters or so? Or you expect this to come down substantially now that there is a very healthy performance across your advances?
So that the -- our net NPAs has remained INR 6,000 crores, right? So that is 1.5%. And so our credit cost, which is around 2.01%. So going forward, I'm expecting that our credit cost should come down from the 2%.
So for this financial year, you are expecting it to be at 2%, right?
It should be less than 2%.
Okay. And sir, for what -- next year FY '24?
So that decision, we'll take on 31st March based on the available numbers. Otherwise, the INR 6,000 crore is not a big amount considering our operating profit of INR 3,600 crores of 1 quarter. How the portfolio will behave then only we'll be able to tell.
Sir, it's at INR 6,000 crores or INR 8,000 crores because current run rate seems to point that the number will be INR 8,000 crores for FY '23?
But I'm talking about the net NPA. Remaining amount, which is to be provided.
Okay. So INR 6,000 crores, so that you can provide in 3 quarters itself, but...
That one can't say, there's big difference there. Because this is a dynamic position, this business.
And sir, in terms of loan growth, do you still intend to grow your book at 10% plus minus 2% or 12% or 8%? Or you would like to replace it to a higher number?
Sir, point is that you see the 14%, but because we are a retail bank, 62% of our book is retail and where the margins are also there, that is a healthy margin. So we'll continue to grow 12%, 13% in the RAM sector. But overall in corporate what happens because of the -- some of the corporate, the interest rates are not making sense from the risk reward point of view. So we will continue to remain selective, we'll continue to remain choosy because we should get a good margin over that. So that is why I told that 12% plus minus 2%. If there's opportunity in a credit substitute, we'll move to credit substitute. But at the end of the day, the initial rate with margin.
Okay. So I thought it is 10% plus, minus 2%, now it is 12%...
No, no, 12%, plus, minus 2%. So everything is based on the margin available. You can grow also. But ultimately, you should get a margin, you have some PSLC obligation, but because we are a PSLC also, we are selling. So from the risk reward point of view, it should make sense.
Sir, next question we have from Rajesh.
I have a few questions. The first question is, can you just clarify, did you talk about wage agreement revision? If yes, what can be the impact of that? And by when we can see some clarity on that?
Wage revision will due from 1 November, 2022. So it is not yet due. But we will -- we have to make some provisions from the December and the March quarter because this is a way every time we use to make provisions. So this time also we'll make provision based on estimate, but the negotiation has not yet started.
Okay. Sir, last time this provision was made in which year?
Every year based on every quarter we used to make.
Okay. So I think -- so you are saying that even in the FY '22, there was a wage revision and then what was the actual -- can you just tell me what was last 3, 5 years' trends, if any?
No, negotiation has not yet started, sir. So based on the negotiation, based on the demand, we will make our estimates what can be the increase and based on that we'll factor in.
No, no. My question is, when was the last revision?
Last revision was on '17. 1st November '17 and every 5 years, it happens.
Understood. And sir, from 1st November 2017, in the last 5 years, it means what has been the actual increase?
No, 1st November '17, actually, last time, around 10% or 12% of the rise has been given. So it depends what is the current rate...
You mean on annualized basis, 10% to 12% hike what you're talking about or the total 10% for 5 years?
10% on an annualized basis only. 10% was the last time. Actually, I'll go back and check, but this was the increment. So it depends actually what is the demand, where you stand.
Okay. And so from third quarter onwards, therefore, you will start making provisions assuming some estimates, am I right? That's what...
As you make some estimates. So that went the actual settlement will take place, we have a provision.
Understood. And our cost-to-income ratio, how do you see your cost-to-income ratio over for full year and for the next year?
So you see our cost-to-income ratio was 41% or 44%, right? So cost-to-income, 2 major factors is that: NII, we are growing 15%, 18%, absolutely no issue. In other income, because of the treasury, it gets fluctuated. Otherwise, expenditures are under control. So this should be in the range of which we are in, not substantial difference.
So are you seeing that your cost-to-income ratio -- because if I look at your total operating expenses for the quarter, it is about just [ 4% ]. So are you saying the operating expenses on a full year basis also, we should assume roughly about, say, last year was about INR 11,000 crores, we should assume about 5%, 6% increase every year? Are you trying to link that?
Yes. In normal situation, half year, it has grown by 4%, right? So that we can have -- this estimates you can make, sir, because I have given all information as we do.
Yes, that shouldn't tie because on operating expense, you on your point, we don't have any further.
Expenditures are under control, sir. Expenditures are under control and the way this is are growing naturally NII should grow.
Okay. And my last question is on an incremental basis, what is our CD ratio?
So you see, first, it was around 70% in September. In March, it was around 72%. It is 74% today.
Okay. Okay. Got it. So incrementally, it would be about [ 95%, 99% ] I think?
Because my point is that what kind of liquidity you are having. Based on that only you on take on that.
Yes. Correct. So by when you think probably you may need equity inclusion?
Sir, presently our capital adequacy is around 17%, 16.15%, which we disclosed and half year profit is 0.77%. So presently, we are adequately capitalized, sir. So even though we have a shareholders' approval and everything, so we'll take a call if the opportunities still arise. Otherwise, presently, we are comfortable.
No, no. There's no doubt at 16% you are comfortable. My question to you, sir, at what capital adequacy issue do you think you will need to raise capital to fund future growth?
Okay. Okay. Understood. So point is that 11.5% is a minimum requirement, right? So 12% -- 1% you can give over and above the minimum requirement. So 12% -- and 13% is a minimum level where we should go for raising capital. That is how we work actually.
So basically, if you are...
And one more point, sir. Second is from the generation point of view. So when you are generating, the 6 months we have generated INR 2,400 crores. So generation itself is taking care of your future needs. So going forward, the requirement of raising capital seems to be less to me because generation will take care of everything.
Next question we have from Mona.
So firstly, on the recoveries you had this quarter, which were pretty strong at INR 2,600 crores. Are there any one-offs there? Are there any large accounts?
No, one maybe INR 200 crores, INR 3 crores. NIM. Yes, 1 account INR 300 crores.
Sure. And when it comes to the restructured book, so I'm assuming that almost all of it is built by now. So from this current book, what sort of slippages do you expect here on?
So what I told initially, Q1, it was INR 1,094 crores. So close to INR 1,100 crores, which has come down to INR 460 crores, 50%. And so this gives us a comfort that going forward, the pain will be less from this book.
Okay. But you don't have a number in mind that of this maybe a 10%...
It is very difficult to say how much it will slip. But you see our collection efficiency, it gives us a comfort that no -- we should not have a undue worry on account of that.
Sure. So if I look at Slide 33, where you have given the details of restructuring. This recovery percentage, is that the collection efficiency for each of the portfolios? The last column.
Okay. This is a restructuring -- recovery in the restructured book of that portfolio. So it gives that 90% of the amount we are recovering. This is what you are saying?
Okay, sure. And just finally, on this restructured, the current outstanding under COVID restructuring is about INR 16,000 crores. And then there is also this MSME restructuring of another INR 2,200 crores. So is there any overlap between the 2 restructurings?
Yes, it will be, madam. It will be because it's just continuing the assets which were under state naturally after that COVID has come. So some overlapping will be there.
So is the entire INR 2,000 crores sort of also coming in the COVID restructuring or half of it...
May not be entire. Some can be. But we do not have that kind of a duplicate number or otherwise, I'll calculate and will provide you.
Yes, if you could just share the total restructuring, including the 2 extra overlaps?
Okay. Understood.
And just finally, on that tax rate, so we have had fairly low tax rates over the last few quarters, and this quarter, it was at 22%. So what sort of tax rate do you expect for the full year?
So what was -- tax provisions, we calculate based on the estimated profitability for the entire financial year because tax is to be calculated on an entire financial year. And the benefit which we are getting on account of carryforward or on account of income tax reductions under Section 36 (1) (viii) because rural, nonrural and all. Considering this, we calculate that tax liability for a full year, and accordingly, we provide. So since our profitability is increasing, naturally the incremental part, you have to give 25% of the tax because we are in the new tax regime. And therefore, on an average, which was 10% in the first quarter has come down to 16%.
Sorry, it has increased to 22%, right, the tax rate?
But for quarter alone, but we are not paying tax, we are tax for full year.
Okay. From H1.
So you calculate on H1.
So 16% is the rate one could assume for the full year?
Near to that.
It would be higher because of next 2 quarters' better profitability.
Based on the profitability estimates, which we able to. So it should be near to that level. Exact amount, of course, will be concluded based on the expenses.
Sure. And just one last point. On the employee expenses, you had earlier said that you expect employee expenses of INR 650 crores to INR 6,500 crores for full year. Now with this additional provisioning that you're seeing on expected wage revision, could this number be higher from a full year perspective?
Yes, that can be slightly higher because we have to provide for the [indiscernible] We make a provision on employee benefit based on the [indiscernible] rates. So what happened based on the 15 years rates. So rates have slightly come down a 15 years and we discount this as a liability for actuarial valuation. So there is still a slight increase in the salary -- this provision part. The other part of the rates are slightly increased because of the DA increase and increase in salaries and all. So going forward, earlier was INR 6,700 crores or so number. So it can be near to that level of INR 100 crore, INR 200 crore plus minus. Actual, will be able to know based on the actual valuation because the major part is this.
Next question we have from Manish.
Sir, I have just one question. If I look at your priority sector book, almost 97% of your NPA is contributed by priority sector loans, which is around -- which translates to 20% of GNPA against public sector peers number of 7% to 8%. So the 2 things here. Do you think we need to revisit our priority sector strategies, number one? And what other steps are you taking to bring this kind of number down to the industry level, maybe at 7%, 8%? That's it.
Sir, I agree with you. Basically, the priority sector the NPAs are in KCC agreements, are into the MSME and all. These are the major. So what we are doing, we have a specific OTS schemes for MSME also and specific OTS scheme for agriculture. And therefore, I told [ 58,000, 60,000 ] of the OTS we have done in the last quarter, and we'll continue to focus on OTS and build out this outstanding.
Sir, apart from agri, even if I were to look your MSME segment, there also the number looks pretty high compared to what other public sector bank reports. So if you can also touch about that, how do you want to bring that part down?
So how can you do the reduction, only through OTS because these are the small account, you can't go to NCLT or any other way. So either the asset sale as a bundle or as a part of the OTS. In OTS but it was your fair cut is less competitive to other. So we will -- we have come out with a specific OTS scheme for education loan for MSME because there are so NPAs are high and that agri loans. So we'll continue to focus through OTS for recovery of these loans.
Sir, what you talked about is the collection part. What I was more interested in understanding is on the underwriting part. So are doing any changes there?
Definitely. So you see in the agri part, we have grown 9%. But you see in 55% is at -- in agri the jewel loan, where we are growing 16%. So the NPS are basically coming other than the jewel loan. So there, we are not going through that extend, we are growing more on tax. So from an underwriting point of view. From the education loan also, we have entirely changed our schemes. We are going to premier institutions at competitive rate. So that also we are focusing on.
Third one, in the agri side, we have specifically created 421 branches. We have posted -- launched MPS. We have purchased [indiscernible] right? So we have a number of things in the gold loan side, not only to boost our portfolio but also to contain quality. Likewise, in the [ SSG ] where the NPAs are less and the yield is better, we are focusing in addition to southern part, we are focusing to the Orissa, Rajasthan, UP. So from the underwriting point of view where the NPAs are more, we are coming out from that. And focusing on the area where margins are better and these are less.
Nest question, we have from [indiscernible]
You shared that there was a interest reversal on restructured book, which has been capitalized. Can you share quantum of that?
It should be around INR 100-odd crores some. Some INR 100-plus crores - INR 115 crores.
Okay. And is there any particular reason it was done in this quarter or the -- whether it can come in next quarter also, in coming quarters also?
No. This is -- we have done -- basically what differs. This was a peculiar time when the 5 months moratorium was given and that amount was capitalized as a part of RBI. What to do with this capitalize part because there are installments and everything is based on that capitalized part. So that, therefore, this amount was kept. And this -- since whatever has been not realized, we reversed.
Okay. So restructured book, which slipped into NPA and whatever interest was accrued earlier that has been reversed?
Yes. For the moratorium period, for 6-plus months, from March to August.
And in future, whatever slippage come further from the restructured book, some amounts might continue in the future as well?
Yes, sir. Whatever uncollected will. So far it is that now this major part has been collected.
And second question like on agri slippage. So sequentially, it has been higher for us. Is it seasonal in nature because for other banks, agri slippage typically come in Q2 or Q3?
Yes. But first, we have major exposure [indiscernible], right? So based on the harvesting period, the time line has been fixed in July. So it came in the month of July and that is why it is higher. Based on the area where we are exposed more based on that the slippage comes. Because in the harvesting season is depends on that particular crop.
So for us, like agri slippage will be typically seasonally can be higher in Q2 and Q4. Is that were to look forward?
Yes, yes, yes. Basically, in July and January.
Got it. And to previous participant's question, like we shared that 12% to 13% growth. So that is plus, minus 2%. That is on RAM or that is on the entire portfolio?
That is on the entire portfolio. RAM we are continuously growing 12%, 13%.
Right, right. And in terms of like, from December onwards, you might start making some provisions. So assuming like a 10% kind of increase in the wages. So what kind of absolute provision we might have to make each quarter?
So that calculation we have yet to do. Because some part is a retirement benefit, some is another part. So that -- every calculation will be dependent on the demand and what can be the sustainable demand.
Next question we have from Jai.
Sir, on PCR, so we have seen a sharp increase from 75% to 80% this quarter. Is this due to some aging provisions? Or you have done some accelerated provisioning in this quarter? And how should one look at the PCR going forward? Do you intend to keep it at 80% or it can actually decline?
The whole PCR 91% and for the other than the [indiscernible] it is 75% to 80%, I agree with you. In some of the projects, road projects and all, we have done provision because some of the road projects have gone into arbitration where the security is a -- security may be the issue from the auditor's point of view. In some of the account, we have made 100% provision. So this is based on the security valuation in the particular asset.
And sir, related question is, you mentioned in your opening remarks that you are fully compliant on RBI, maybe directions on standard assets provisioning. But do you expect any more standard assets provisioning on some of these quasi sovereign, sovereign, civil supply discount kind of an account, which have been provided at accelerated base rate at other banks?
It depends on which account you are in, what is the position of your account, whether account is performing. And suppose it's a big account of INR 1,500 crores account. These are various banks, various bank where the account is SMA 0 or 1 and it has not been -- no reservation plan has come. All those accounts, basically, are 7 June '19 circular triggers, right? So that based on particular bank's position where we are -- they are who not there, we'll take the calls.
Yes. So sir, you would be knowing, right, so these are 5, 6 accounts. And is there any additional standard asset provisioning required for Indian Bank.
So from my that you see from the Indian bank perspective, I can tell you, we are in 62% of retail books. We are fair books. So we are not having much exposure on a bigger accounts. So that way, we are a retail bank. So any provision because partially, it comes -- it will not -- we're not having -- and to worry on account of that.
Understood. And last question, sir. If I look at your regulatory retail deposits, right, that number as per last quarter is the lowest of all PSU bank by wide margin at around 45%. So have you looked into that, that why is your LCR-compliant deposits are such low at 45% versus 60%, 65% at other banks -- other PSU banks?
We'll provide you the detail.
Our next question, we have M.B. Mahesh.
Sir, I had just one question. In Slide 6, the foreign loans that you have in your portfolio, if you could just kind of give us a breakup of that particular loan book, sir?
You're talking about the international book?
Yes, sir.
Yes. So international book, basically, around INR 26,000 crores. We are having branches in Singapore and Sri Lanka, these are the business. And the credit is basically the syndicated credit, which is a CV credit, the trade finance credit and flow through banks or institutions. It's a core measure of credit.
Out of this, how much would be, let's say, credits given to institutions, which are based out of India, sir?
That we'll calculate and we'll provide you. But these are the major 4 categories.
But just to kind of extend this question. In a reason, why we have chosen to grow this book given that it's in a low-margin business to begin with? And if domestic demand is reasonably strong, why bother growing this book?
No, actually, there's margins available on that particular book. That is the reason for growth on this book. So suppose we are getting a good margin there, they will grow.
But the domestic margins usually are much stronger as compared to the international margins, even if you adjust for the cost at which you operate in those branches. Just trying to understand why do this business in the first place?
No, what was -- some of our customers too are giving business in India and ours as well. So some of the business are through the clients here booked in the domestic business and some of the business is booked in the international. And somewhere we are also giving, suppose we've given them SBLC unit, so that in discount so we'll earn SBLC commission here, and we'll earn there also. So put together, it's a good margin. So some margins we are getting on account of commission, some margin we getting on account of income. So that is -- that both put together gives you a good margin to take the call.
Sir, just one clarification. What would be the duration that you're running on this book?
So duration may be less than 1 year for a major part of the book because trade finance and institutions are less than. But syndicated credit and -- go slightly 3 years. They are slightly 3 years, syndicated and ECB.
Next question we have from [indiscernible]
Yes. So I just had one question that to one of your peer bank's CEO said that for state-owned banks, the CD ratio peaks at 74%, 75%. So do you agree with that? As in that do you -- I mean, would this be your peak ratio? And beyond this, it will be faster deposit growth?
The point is that CD ratios, they are at 74%, 75%. But you see SLR, 30%. So ultimately, your overall liquidity has to be seen. So if we will be able to grow the deposit at a competitive pricing, then we can increase our CD ratio. But when you are in investment book at 30%, and this -- and advance 74%, 75%, then ultimately, how you manage the balance sheet, or you'll continue to have borrowings. Generally, we are a stable type of banks. So borrowings, generally, we take -- occasionally, we'll take against the SLRs and all.
Okay. But would you like to increase your CD ratio from here on? Or how do you view your CD ratio from current levels? Or would you like to maintain it at this level? Or it's not a parameter you would track as such?
No, no, we are taking 72% to 74%, we can go even 1%, 2% higher because we are expecting the credit growth to be 12% and the deposit growth to be 7%. Naturally, 2% it will increase in that situation.
[indiscernible]
A couple of questions. So what would be the share of your wholesale deposit in the overall term deposit. The reason I'm asking this question is because if I see your CD number that is on a flat on a Q-o-Q basis, while CASA has grown. But again, your cost of deposit has increased higher than the peers. So I just wanted to get a sense what would be the share of wholesale deposit in the overall term deposit?
The cost of deposit is around 3 -- 4.0% per annum. Our cost of deposit is under control. So because just a -- so there's not a increase -- major increase in our cost to deposits, 3.85% to 4.02%, because the interest rates have increased, we have increased our deposit rate cycle from March level to this, there are around 110 to 140 bps. So that impact will come sir. And your question that whether part of our deposit is in basically, a stable.
Okay. But what would be the wholesale share in this -- in the term deposit?
Exactly I don't know. But remember it should not you more because...
Sir, your voice is not clear.
Maybe INR 70,000 crores. So maybe around 10%, 11%. So INR 70,000 crores, so you can say 12%, 13% because INR 6 lakh crores of deposit [indiscernible] Are you getting my voice?
Yes, yes. Yes, sir, I am getting. Understood, sir. The second question is, sir, on the restructured book. So I mean, out of the INR 16,000 crores, how much of the book has come out of moratorium and how much is still under moratorium, if you can mention that?
No, major part of it has come down, sir -- come out of moratorium. The recovery percentage and everything. Already 1 year has passed.
Okay. Okay. Understood, sir. The question is then on the Slide #33, where you have given the disclosure on the restructured book here in the column, it is mentioned there is some additional funding to this restructured book. So if you can just explain what is this additional funding.
For us, we are having term loan, we are having cash price account as well. So what happens based on the availment of that particular day, it is a part of additional availment on our interest and somewhere interest also debited on the last date, servicing of interest. So all these factors considering this is the position as on a particular day.
Okay. Okay. Understood. Last 2 questions, sir, if you can disclose the ECLGS number? What will be your total outstanding ECLGS and how much NPAs you have on that book?
In fact, but we have INR 11,004 crores of ECLGS we have given. Current outstanding is INR 6,500 crores. And the NPA number is around INR 300-odd crores. So you get 3% of the total ECLGS we have given as a NPA impact.
Sorry, sir, I missed the NPA number, if you can repeat?
Around INR 300 crores -- exact about INR 300 crore something -- INR 370 crores or some amount -- INR 363 crores.
Okay. Okay, sir, understood. And the last question, sir. You mentioned a couple of interest reversal during the call. One is on the agri slippages, one is on the restructured loans and all that. If you can mention the cumulative total interest reversal in 2Q and a similar number for 1Q, that would be great? These all from my side.
So my CFO will.
What is the total interest reversal in the quarter -- sir, there is a total reversal of INR 230 crores, sir, that KCC interest reversal of -- it is INR 115 crores because of COVID moratorium.
What is the total reversal, that is the point. Total is to my mind, INR 400 crores, INR 260 crores plus INR 115 cores plus others, so around INR 400-odd crores, should be around. INR 260 crores plus [indiscernible] so it should be INR 400 crores.
Okay. And a similar number for 1Q would be, I mean, approximately.
Similar number of the last quarter can be INR 100 crores or so. It cannot be more that. Last quarter, it is INR 110-odd core.
Your next question we have from Mr. Ashok Ajmera.
Sir, in our non-SLR book, INR 37,199 crores, there is INR 1,034 crores of security receipts, SRs. So I believe that SR is 100% provided for. Is it the gross figure, net figure or net off provided for?
Ajmera, as our guidelines from Reserve Bank of India, when you take an SR, and whatever provision you are having in your book is to be netted off. And remaining, you have to do mark-to-market on an inward treasury book. So this INR 1,034 crores remaining amount is fully provided, sir.
Because in the notes through the account you have mentioned that we have 100%...
It is fully -- SR is fully provided all this account, big account all are fully provided here. Pension is fully provided. And bank is not advertising the product provision in 4 quarter and everything. Everything is taken care here.
And one item of this share of PSU corporate and other, share means it is equity shares because it's a share of PSU corporate and others in the non-SLR. Does it mean that equity shares?
Yes, it is equity shares because in treasury, we keep on purchasing them.
Yes, yes. I mean only little -- I mean, it is share of -- shares or equity share...
Our share can be 3 RRVs. I can tell you 3 RRVs and all 3 RRVs are hitting net NPA 0, sir, and a profit of INR 359 crores in the 6 months. So all by RRVs are basically healthy free that way. So that share can be there. So I can tell you, in the half year ended 3 RRVs have put together have a profit of INR 394 crores as against INR 283 crore of the last and growth of 39% in profitability. In all the 3 RRVs, are doing good.
And what about your 2 major subsidiaries. They are also doing well?
Yes. Sompo has given dividend to us as well and doing good profit.
Okay, sir. So now sir, any guidance on -- our credit cost is a little higher at 2.01%...
Yes, credit cost should come down from -- less than 2%.
Less than 2% or less than 1.5%?
So less than 2% includes less than 1.5% as well. So it will be less than that.
Sir, our NBFC portfolio exposure is around 14% as I see. What are our views on the lending through NBFCs through onward lending as well as co-lending and a tie up with the NBFCs for increasing our reach to the lower spread of the society?
So what our NBFC -- 99% of our NBFC is A and above. So that is one part. Second, we had done tied up with number of NBFCs for co-lending and we are having co-lending exposures as well. We have done co-lending for education loan. We have done co-lending for MSME loan. We have done co-learning even for the gold loan, wherever we are not having access, our NBFCs are doing gold loans and depositing gold with us at the end of the day. So the securities is with us so we have done number of co-lending tie ups with NBFCs.
And I believe that is the 20%, 80% proportion in the co-lending?
Right. Right. That is fine.
And what is the total approximate exposure there in co-lending?
Maybe around INR 1,000-plus crores because MSME is also there, retail is also there. Exactly should be INR 1,000 crores.
INR 1,000 crores. Okay, sir. Going forward, sir, you see I'll start with my first question only, that overall, in India, the things are looking good. Most of the public sector bank for the first time in the last quarter and this quarter have done comparatively better than what was originally expected from them in spite of all the pressures in the global turmoils, Ukraine, Russia war.
So according to you, you are a very senior banker, forget about only business of your bank, your size. But otherwise, you have handled very, very big, I mean, bank like Bank of Baroda also. So where -- I mean what is your opinion, sir, or on going forward, especially for Indian public sector banks that -- where are we going from here? I mean is there any -- still there are some hiccups. There can be some problem, there can be some chunky accounts coming in again or there can be some pressure on the recoveries, SMA 2 numbers going up or slipping to NPA. Or here onward, we will have a competitively smooth selling, sir?
So from the public sector bank space I can tell you that all banks are first, adequately capitalized. Second, adequately covered also. The ECR of the all public sector banks are ranging between 85% to 90-plus percent. So that's a fully, fully covered. Whatever recovery will come, either will come as a part of PW recovery or the major recovery. So capital-wise, they are fully covered, then that provision-wise they are fully covered, this is the second point.
And the third one, on business side, you see the all of the sector banks are growing, are growing in double digits, are growing in double digits are having good franchise, getting good CASA. So that their cost of deposit will continue to be lower. And then we are not having the provisioning buffer, naturally your spread will be higher. And cost of all banks are, they are doing a lot of digitization. Each bank is doing digitization.
Government of India is also having the ease reforms that a number of things are improving, best practices are coming, whether it is in HR, whether it's in the technology, whether it's in MSME, all sectors -- look, let's see all banks are improving their performance, productivity and all. So then their post will be under control, provisioning risk is not there, and they also learn from the experience as well. You see the corporate book of any of these public sector banks, hardly in the [indiscernible] very low, which is manageable. So going forward, this -- as a group, they should perform better, sir.
Okay. And even your treasury is also doing comparatively better, in fact, in spite of all these pressures. Congratulations and complements to all of you and all the best for future, sir. You just fill a chartered accountant and you are definitely handling this bank very well.
Sir, last question that I have is basically touching up on the same standards of provisioning stuff. So what is our exposure to FCI, that's Food Corporation of India?
The account-specific -- Anand, we don't discuss account-specific issues, unless it becomes NPA and otherwise a lot standard accounts.
That's it from our side. Do you have any closing comments to make?
Thank you. Thank you all the investors analysis for your insightful discussions and your discussion will help us and will, in fact, guide us for taking a better decision. Thank you once again. And kindly continue to support us.
Thank you, all. Thanks for participating. That's it. We will close the call now.
Thank you.