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Punjab National Bank
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[Audio Gap] As far as business -- as far as business of the bank is concerned, gross business of the bank has increased by 9.33% on a Y-o-Y basis.
Similarly, the gross deposit increased by 7% on a year-to-year basis and gross advance increased from the figure of INR 735,724 from September 2021 Figure to INR 830,212 crore with a growth rate of [ 12.84%. ] At the time of the guidance, our key credit growth we are targeting in the range of the 10% for the whole of the financial year.
Since we have already achieved the 12.84% the Y-o-Y growth in the gross advances so we are revising our credit growth guidance. It will be within the range of 12% to 13% because now there is too much of demand from the credit from the market.
Saving then there is a growth of the 5.84% and CASA of the bank stood at 44.91% as against the 46.35% in the June quarter. Come to the operating part, there is a robust growth in the net interest income of the bank 30.19% on Y-o-Y basis. In the last September 2021 quarter, it was INR 6,353 crore, which has improved to INR 8,271 crores with the growth rate 30.19%.
Even if we compare with quarter-to-quarter, June to September, there is an increase of 9.65%. Similarly, the operating profit, there is a growth of 38.4% of Y-o-Y basis. And if we compare quarter-to-quarter, it is 3.5% growth. As far as net profit of the bank is concerned, if we compare quarter-to-quarter, there is an increase of around 33.44% because last quarter profit was INR 308 crores, which has increased to INR 411 crores.
But if you see year-on-year wise, definitely, there is a dip in the -- around 62%. Come to the assets quality. Assets quality, which I am comparing only content to quarter, and I will give you the number of the last year also. 13.63% in September '21 and which was reduced to 11.27% in June 2022, further reduced to 10.48%.
And similarly, amount has also reduced of the gross NPA also. Net NPA it was 5.49% in September 2021, 4.28% in the June last quarter and further reduced to 3.8%. The last time we have given the guidance, our gross NPA will be in the single digit by March '23. So we are maintaining that. My purpose was telling to single digit, it may be 9.98% or the 9.90%, but since we have already achieved 10.48%, and you have seen every quarter, there is a reduction of around 70 to 75 basis points.
So although I am maintaining single digit, but it will be further reduced, maybe whatever it is coming in the single digit. Similarly, the net NPA guidance we have given, it will be in the range of 3.5% by March '23. This we are revising.
Since we have already achieved 3.80% by the September quarter. So now we are confident -- I'm fully confident by March '23 this net NPA figure will be 3% or less than 3%. PCR has improved to 83.96%. And 1 more thing I want to tell you, last time we have told, we have made target of the INR 32,000 crore of the total recovery in the full financial year. It means INR 8,000 crores per quarter.
And if you see the number of the both the quarter, first quarter June it was INR 7,057 crores. In the second quarter, it is INR 8,564 crores (sic)[ INR 8,565 ]. This number, which I'm telling you, it is including the technical write-offs as well as the part of the recovery booked in the recognized interest also.
Because the movement of the NPA, technical written off and the income which we have moved in interest that is not reflecting. And second point I have told you, our endeavor is like this, our slippage should be less than the recovery number.
So if you see both the quarters, we have achieved that parameter also. In June 2022, total recovery was INR 7,057 crores. Whereas the addition was INR 6,400 crores plus. And in the current quarter, means September quarter, recovery were INR 8,564 crores, and the addition was less than INR 6,000 crore. So we have achieved both the number, there should be INR 3,200 crore recovery [Foreign Language] or similarly, the addition should be less than the slippage.
And this is about the asset quality. As well as capital adequacy, you may be interested in the capital adequacy results. As on date, my Tier 1 is 12.2% as against the normal [indiscernible] 14.74% as against the [indiscernible] with further raising of the capital there is no immediate need of the raising the capital.
But definitely, we will raise the capital either in the current quarter or the next quarter, seeing the market -- what is the market expectations and whatever the rate we are going to get. So we have already got the approval from the Board for the INR 12,000 crore out of is INR 5,581 crores and INR 6,500 crores in the Tier 2. Out of INR 5,500 crores, we have already raised INR 2,600 crores plus in the last quarter -- September quarter.
So remaining, we will see the rate at which we want to raise the capital, definitely, we will not mind raising the capital also, particularly in Tier 1 and if there is a need of the Tier 2 also, we will also raise the Tier 2.
And coming to the asset quality again. I reconfirm my statement, which I had given last quarter also, there is not a single big account as of date in my kitty, which we have to recognize. We are working for the big account already recognized. We are doing resolution as well as the recovery.
But definitely, there was issue in the small account RAM that we are addressing. Even as of date, whatever the addition is the INR 5,900 core plus in the September quarter, highest single account is only INR 178 crores.
And even for the SMA-2 figure, it was INR 10,287 crores in September 2022. As on date, it is further reduced to INR 4,363 crores and highest account in the INR 4,363 crores is only less than INR 100 crores, that is INR 94 crores single account. So again, I'm reconfirming big account, we are not thinking as of date to recognize in the times to come.
And 1 more thing. When we are talking of the asset quality, I told there was an issue in the small account. So [indiscernible] both the accounts, underwriting standard as well as the collection efficiency. I am giving 1 very important data. From the -- we have made the analysis from the July 1, 2020 till date, September 30, 2022, more than 2 years.
What type of credit acquisition we have made. So in that more than 2 years, last 2 years, INR 270,812 crore, we have sanctioned against which as on date outstanding is INR 190,756 crores. Out of this NPA, INR 190,756 crores, hardly INR 945 crores, which is coming INR 0.35 crores -- 0.35%. And further, I'm giving breakup because you may be interested further about the segment.
Agriculture, only 2.25%. MSME, there is a little bit on a higher side 2.14%, retail 0.38%, others means corporate 0.02%. So it means it will give up the cushion which type of underwriting we are doing and which I told you there was an issue in the RAM. So I think 1 or 2 quarters everything will be clear.
So as far as NCLT account is concerned, as on date, 560 account of 66,855 already admitted and [indiscernible] only 4,869 is to be recognized. And in NARCL we have already identified in the first phase, 9 accounts of INR 2,752 crores out of it 5 account so we have got the offer from -- consortium offer for the -- where the outstanding of the PNB is INR 1,099.
Fraud, as far as dispersion of the fraud is concerned, entire amount, [ INR 651 crores ] was pending in the last quarter, which was to be amortized in 2 quarters, half in the September quarter half in the December quarter. But entire [ INR 6,51 crore, ] we have already provided in this quarter itself. Nothing about is pending for the amortization in the times to come.
So this is from my side. If you have any question also, I would like to answer your -- all the queries. Also, I can confirm that bank is on the right path. Bank is on the very right path. Whatever the future guidance we have given, I think, we have achieved all the guidance which we had given the last time.
Bank is on the growth part, only there is also 1 or 2 quarters '23, '24, whatever the number I have given, it's -- I think it should be a golden period for the Punjab National Bank. With this word I'll conclude my presentation, now floor is open for you. For Suraj, you can take over the charge.
[Operator Instructions] We have the first question from the chat window. It is from [ Harsh Agarwal ]. So the question is why we still have very high NPA from agriculture and MSME sector?
Yes, I have already explained in my opening remarks also, there was definitely a legacy issue and which we are addressing also. Out of this INR 6,000 crore number, around INR 6,000 crores in slippage the agri was INR 2,785 crores.
This is not only in the Punjab National Bank, NPA in the agriculture is the issue of the banking industry. It is not only the issue of the Punjab National Bank because some of the states, if the government has already announced the debt waiver also, the customers are not making the payment. This is the only reason -- but I have given -- I have already given the data for the last 2 years for agriculture also.
Total amount, we have sanctioned agriculture from the 1 July '22, September 30, 2022, INR 35,485 crores we have sanctioned fresh loan, where NPA is only INR 89 crores, which is coming 0.25% only.
The next question is from [ Neel Mehta. ] Your voice is very Can you conclude it to the mic and ask your question?
Yes. Am I audible now?
Yes, you're audible now.
[ Neel, ] go ahead. [ Neel, ] go ahead. Now you are audible. Yes.
So sir, we posted a profit -- a treasury profit this year -- this quarter of INR 102 crores, which was against a loss of INR 532 crores in the last quarter.
Just wanted to understand what was the reason behind us posting a profit in a rising interest rate environment? Because our modified duration of the book, it actually rose back to 3.15 around. So if you can please explain what led to the profit on the treasury front?
Treasury profit, it was INR 160 crores, point #1. It is INR 160 crores treasury profit. And mark-to-market, we have to provide INR 158 crores. So your specific question is the increasing interest rate, how the profit has come.
Some of this security was already purchased in the prior to increase of the rate of interest, which were in the profit we have sold. And this is profit not only related to the G-SEC only. There is some profit also, which is related to the trading in the equity also. It is the combination of the sale of the equity, combination of the SLR and non-SLR also. And sometimes there is a profit in the SR also. So it is a combination of all these things.
Okay. Got it. So you're saying it's not just on account of dealings in government securities. This was also on account of equity investment. Got it.
And if you could also give some color on what would be the guidance for the growth of the corporate book? I guess, currently, it was, I think, 14% Y-o-Y. So if you can just throw some color on how would you -- what rate do you expect it to grow at?
Yes. If you see my credit growth, it is 12.84% in total. And if you see the composition of the 12.4%, it is 14.15% from the corporate sector. In addition to the retail, it was around 16.95%. If we go further for the retail -- in vehicle it was 35%.
So our focus is on the RAM side. I'm very honest to all of you. Our focus is on the RAM side, and we want to increase the RAM portfolio because yield is much better as compared to the corporate book also. But we are also financing in the corporate also because in corporate there is a good demand in some of the sectors like there is a good demand in the road sector also.
Infra, there is a good demand also. And the government PLI scheme and the government is giving the first only infrastructure in the other port, et cetera. So there is also a demand. Even 1 more sector, NBFC also there is a lot of demand.
As on date, we are having the exposure of around INR 118,000 crore in the NBFCs. And we have taken a good exposure in the good NBFCs. And I'm happy to share you out of INR 118,000 crores, 97% exposure to the NBFC either A or AA or AAA externally rated. So we will do financing of all the sectors, but RAM is the focus and corporate maybe, if we are getting good proposal also, we will not mind to go away the opportunity, which is available as on date, yes.
The next question is from Sanjeev Damani.
Am I audible, sir?
Yes, you're audible.
Sir, actually just now you mentioned about INR 6,500 crores, which is amortized. So amortized means, it is already written off from the P&L account? Should I take it this way?
I think -- may I correct you, I've not told the figure of INR 6,500 crores. I told you INR 651 crores fraud. Fraud, which was to be amortized in 2 quarters, 50% of the INR 651 crores part we are to provide in September. We are providing entire. Nothing is the amount pending to the next quarter.
So it is written off from our P&L account. So to that extent, our profits are lower in this quarter.
Yes, it is coming under the head of the provision. Because as per RBI guidelines, if any account that has been declared fraud, we can take the dispensation to make the provision in the four quarters. So INR 651 crores are outstanding, which had to be amortized in 2 quarters. 50% was to be provided in the September and 50% was provided in December, but we are providing entire amount in this quarter. Yes.
You are right. By this amount, profitability has been impacted, yes.
Impacted. And since it is a provision, this will carry on for next quarter if it is recovered, then we can always take it back as profit.
Definitely, definitely. It is not an actual expenditure. I fully agree with you. It is not an actual expenditure, it is a provision. If we will make the recovery in the fraud account also, definitely, there will be a reversal of the provision. Fully agreed.
The next question is from Mr. Anand Dama.
Sir, first question was on -- in this quarter, RBI auditor basically had asked a lot of banks to make some standard asset provisions on the public sector entities.
First, whether we have got any instruction like this? And if yes, what is the kind of provision that we have made? Is it the INR 170 crores that we have mentioned in these 2 accounts? Or is it more on that.
Anand, actually, there is no communication, let me clarify. Normally, this type of provision is being suggested -- as on date, we have not received the report of the [ AFI ] but we are aware, we are aware. Some of the account. The other banks already made the provision. And we are also having the exposure in those accounts also.
So we -- around INR 900 crore, around INR 900 crores we have made a provision in the standard asset also in this quarter also.
Okay. So is it pertaining to that instruction itself or like is it on an ad hoc basis that we have done it.
I told you, Dama, I clarified you. There is no written instruction from the RBI to make the provision in this account, point #1. Point #2, regulator is taking the holistic view. If there is a weakness in some of the accounts, not in a particular bank, if there's weakness in the other bank also. So they're suggesting -- I think it is a right approach also. So as on date, it because our -- we have not received our [ AFI ] also. But we have got the information some of they were required to make the provision.
So we were also having the exposure. So we have made, it is not on ad hoc basis it is account specific.
Okay. So you believe that this is largely done with, right? So all the provision that we had to make, we already made it.
Around INR 800 crores to INR 900 crores, we have made a provision in 3, 4 accounts also. Definitely, if we receive the report also, if this account will already be there. So not required. If some other account will be there. So definitely, we are required to make.
Okay. Okay. Got it. Sir, secondly was the outlook on the margins from here on. One is basically that you said that growth is going to be far better in the second half of the year, again, where you are basically focusing more on RAM, but even the corporate growth is going to come by. So what is the outlook on the margins in the second half of the year and then going forward?
Anand, I may clarify you. I've not told that will not do the financing to the corporate, and there is no question on the bank also. But in corporate, suppose we are very cherry-picking, AAA, AA also what yield we are getting. This is the reason I told you, our focus in the -- on the RAM side because we are getting the more yield as compared to the corporate.
If you see my NIM also -- in terms of the accrued number, already I've told you 30% growth is there. And I have told in the last call also, I have given guidance of only 2 numbers. I have never given the guidance of the net profit. I have given guidance for the 2 numbers, the operating profit, and there will be a growth of 10% year-on-year basis.
And similarly, I've given the guidance 10% growth in the NII also. But in particular quarter, there is a very good growth, 30% in the NII and 38% in the operating profit, it is only for the 1 quarter, and I'm maintaining whatever the guidance I've given.
NIM, last time, we have given the guidance it was 2.9% -- I'm talking about the domestic NIM. It was 2.90%, which has improved to 3.11%. So last time, we have given the guidance here, our NIM will be within the range of 2.80% to 2.90%. So today, we are revising our guidance, we are giving the guidance that our NIM will be in the range of 2.9% to 3%. So we are improving 10 basis points.
Absolute number, I'm again telling that quarter-by-quarter, our NII should be increased.
Sir, third is about your staff costs. So for the past 2 quarters, basically staff costs were lower and again it spiked up in the current quarter. So is it more of a normalization of staff cost because earlier, I believe you were carrying excess provisions.
No, no, no, Anand, it is only the 1 impact because on account of the hardening of the interest. There was a reversal of the AS-15 provision in the earlier quarter, march quarter as well as the September quarter.
But you may remember last time what was the reversal of our level we have made the entire provision of the family pension -- total provision of the family pension was INR 394 crores and part we have provided in December and March. The remaining we have provided in the June itself. So this is the impact of the only on account of the AS provision, nothing more.
Otherwise, there is no any increase in the salary cost, yes.
This run rate should continue going forward, is it?
Yes, yes. But definitely, I am very honest to all of you because November will be the time where the wage settlement is due for the next year. So definitely, we would like to make the provision, whatever the provision we have to make from the November itself for the wage revision.
And sir, any increase in DA cost that you expect.
Any?
Increase in the DA cost, dearness allowance. So that also will have an impact...
It depends on the inflation. That is -- it is difficult to provision also, what will be the inflation rate. So it depends on the inflation there. So definitely, we....
Sir, any ballpark figure as to at what would be the impact on a quarter-on-quarter basis on the -- because of the wage settlement that you would try to build.
It will be very difficult to say. Normally, if you see the past and also, okay. November 2020 next revision is due. If you see the past and also the wage revision was in the range of the 12% to 13% also. So definitely, I think it will be within the same range 10% to 12% also definitely will be there.
The next question is from the line of [ Priyansh. ]
Hello. Am I audible?
Yes, yes, please. [ Priyansh, ] you are audible. Please go ahead.
I think there is some technical difficulty from the line of [ Priyansh. ] We'll go ahead with the next question that is from the line of Mr. Bhavik Shah. Mr. Bhavik also seems to be unresponsive. So we'll go ahead with Himanshu Taluja.
Just a few questions at my end. Firstly is on the restructured pool of INR 14,000 OTR 1 and OTR 2. Can you just give a breakup, where is this in the DPD buckets. Right now they are part of standard SMA-1, SMA-2. And how much is already the part of the NPA?
The OTR 1 as on date outstanding in the retail and the other INR 3,088 crores and MSME, it is INR 479 crores. If you make the total OTR 1 outstanding is INR 3,567 core. It is a standard book.
And you are also asking whatever the NPA also. So the NPA in this INR 1,930 crores in the OTR 1. And OTR 2 outstanding as on date in the individual and small is INR 5,927 crores and MSME it is INR 4,446 crores. If you make the total of INR 10,373 crores which is coming in the standard book. And NPA was around INR 1,850 crores -- INR 1,900 crores, INR 589 crores was the NPA and the individual and small and INR 1,384 crores was in the MSME, yes.
Sir, what portion of your standard pool -- standard restructured pool is out of the moratorium right now? And how much you expect overall how much of this standard pool you expect to slip.
I think 2 years is already over. 2 years -- is because 2 years was the moratorium. 2 years have already been over as on date. So I think nothing is in the moratorium. Let me -- yes -- but still because some of the amendment was on the later side. So as on date, moratorium up to 30th September 2022 was around INR 3,558 crores.
Okay. Fair. So of the remaining of INR 13,000 crores standard pool out of this moratorium is INR 3,500 crore, how much you expect the restructure to slip basically in the coming quarters?
As of date, we are not of the view that any account will be slipped. But considering the -- whatever the out of the total restructuring, major portion, which was to be downgraded, is already downgraded.
So whatever I'm trying to tell you in OTR 1, only INR 1,221 crores is the moratorium and the OTR 2 is around INR 2,329 crores. So as on date, I think there is no threat. As on date because some of the accounts, even they are not coming in the SMA-02 book also. So I am quite optimistic. Whatever account will be downgraded is already downgraded.
Because you see the number which you [indiscernible] already around INR 1,607 crores or INR 324 crores if you make the total, INR 1,925 crores already downgraded [indiscernible] any further slippage [indiscernible] nominal amount will be there.
Okay. Sure. Sir, second is, we have already given since there are no big accounts, which are under stress, and we have already given the SMA-2 about INR 5 crores. Since the [ pain ] is in the lower end of the accounts, can I give the number of the SMA-1 and SMA-2, which is below INR 5 crores.
I may correct you also the number in presentation, they have given INR 5 crore and above. But I'm giving you total number. Whatever the number I have repeated in my conversation INR 10,287 crores was the number of the SMA-2, it is an entire INR 10,287 crores is not more than INR 5 crores. It is the entire SMA-2 number bank as a whole, which has reduced to INR 4,363 crores. And if you want to SMA-0-1-2 number also, as on date, I'll give you the latest number. SMA-0 INR 16,183 crores and 1 is SMA-1 is the INR 9,553 crores.
Total SMA-0-1-2 as on date is around INR 30,000 crores only. There is no question of the INR 5 crores and above or less than INR 5 crores. This is even a INR 1 account, that is SMA-0-1-2.
Okay. Sir, now finally, ultimately, our pace of the recovery is healthy. But when do you expect the slippages because we are still on the gross slippages we are on elevated side. So when you expect the slippages to normalize?
Himanshu, I think I have given you the answer of your question, in my conversation also. What was the issue? Issue was if there is a stress in the RAM sector also. There was a major issue what type of fresh underwriting we are doing. So we have worked on both the sector, both the -- first, the underwriting standard and other is the collection efficiencies.
I have given you the data of the last 2 years sanctioned also. And I have told you NPA slippage is only 0.35%. So whatever your specific query [Foreign Language] I think only by March '23 maybe 1 or 2 quarters. So whatever the legacy issue of the RAM is there, it will be completely wiped out. And the '23, '24, as I told you earlier also, will be the golden period. No slippage, no -- only the recovery will come. And you see the GST collection also.
GST collection has improved INR 1.40 lakh crore. So this is also giving one of the signal that there is -- economic growth is on the right track, consecutive from the last 8 months.
The next question is from the line of Mahrukh.
Sir, my first question is, can you see -- tell me the ECLGS slippages -- ECLGS slippage? And if you could please repeat the SME numbers? Yes.
Yes. Yes. ECLGS, Mahrukh, around INR 21,460 crores, we have sanctioned, out of which INR 12,868 crores is the outstanding. And out of which, NPAs already is INR 840 crores, which is coming around 6.53%.
Hello. Can you please repeat the SMA numbers, please.
SMA number, SMA-2 was INR 10,287 crores from the INR 0. It is not INR 1 crores above, INR 2 crores above. INR 10,487 crore was the entire SMA-2 in the bank as a whole in September 2022, which has drastically reduced to INR 4,363 crore. If you want to ask the number of the total SMA-0-1 also it is [indiscernible] and INR 16,183 crores for the SMA-0, then SMA-1 is INR 9,553 crores, INR 4,366 crores is SMA-2.
We'll go ahead with the next question, which is from the line of Mr. Bhavik Shah.
Sir, I have 2 questions. Sir, first is, so what is your current liquidity coverage ratio?
Current?
Liquidity coverage ratio.
Liquidity coverage ratio. It remains between the 150% to 160% as against the requirement of the 100%, it is 150% to 160% because we are having so many excess SLR INR 50,000 crores excess SLR we are sitting as on date.
Okay. And sir, 1 more thing. Sir, what would be the outstanding deferred tax asset? And when do we plan to consider shifting to the new tax regime?
As on date because we are already having the accumulated loss in our book. So we have taken the opinion over consultant also, I think, as on date, we are not getting any benefit to shift to the new tax regime. And we have given the disclosure in our note to accounts also. So as I said, there is no plan.
We will take appropriate decision when we will -- of the view that definitely it is the right time to shift from the old regime to new regime.
Okay. And sir, we saw a couple of banks getting divergence report from RBI? Is that divergence done? Is it reported in the period?
Bhavik, as of date, we have not received our report.
The next question is from line of Mr. [ Priyansh. ]
Sir, my first question is that with respect to our CASA growth, our current account deposit growth has been very, very minor. You can see that as of September '21 we had current account deposit of INR 71,958 crores, whereas as of September '22, it's only INR 72,741 crores hardly 1% growth. And current account deposit is like free money, no interest has to be paid. So I would like to understand -- and I would like to give you constructive feedback that the Board must give a concrete target to all the CGM and GM and the branch managers to incorporate and to introduce additional number of corporate accounts wherein we can get current account.
[ Priyansh, ] we are aware whatever you are saying. It is really concern area for us also. As you have told, there is a very nominal growth. We are aware of that. It is 1.09%, but if you compare from the June also. From June, there is a good growth. It was INR 69,332 crores, which has increased to INR 72,740 crores, around INR 3,000 crores.
What we have done, we are targeting the corporate client where we can open the saving account also and some of the large corporate, if they are having some other associates also we are targeting those also. And we have also provided a tab to over all 10,000 branches.
After providing the tab, there is a lot of improvement in opening of the account, time has reduced, TAT has been reduced, but that is being done on the saving bank account as on date. We are shifting the saving to the current account. The time will come definitely, current account, mobilization will also be improved, but I fully agree whatever your concern have shown, we are fully aware of it.
So appreciate your positive feedback. I'm only requesting that you being the chief of the bank from the Board level, some solid guideline and structure must be passed on to all the executive management of the bank to mobilize additional number of corporate accounts and also salary account.
So that we can have this like when the final will be bigger, automatically what money will pass through, bank will make some money out of this. So I think this is one of the niche area to be tapped into with a constructive implementation strategy.
You are right, [ Priyansh. ] We have already -- part of the advice has already been done. We have already instructed to our zonal heads who are in the state capital because current account normally can garner big account in this sector also. So the instructions have already been issued to the zonal heads, they should garner more word current deposit account in operation.
The next question is from the line of Mr. Sunil Mehta.
This is not Sunil Mehta. He's my colleague. I'm Ashok Ajmera. I was waiting for a long time. Most of the queries have been answered. But I just need to ask a few questions and some observations.
Now you see with the interest rate hardening up and inflation going up, we feel that even in the RAM book, there can be some pressure. So though your SMA-2 is INR 10,287 crores going forward, especially in this quarter, September, December quarter, do you see some pressure coming in SMA-2 book, if not the NPA finally?
As on date, there is not much pressure also because I have given data also INR 10,287 crores figure, which I have given to you, that is outstanding of the SMA-2 as on 30th September. But we have taken the data of the -- current data also. So it has reduced INR 4,363 crores. So it means there is no pressure there is reducing.
Because all of our machinery, all our machinery in the field -- we are having 10,000 branches, main focus of the bank is on the recovery. Because profit has to come from the recovery and the INR 90,000 crores, it has reduced to INR 87,000 crores is the recovery in the gross NPA number.
And in addition to this, INR 87,000 crores is the technical write-off. So each and every employee of the bank is for the recovery. When they are making the recovery of the NPA, they are also making the effort of recovery in the standard account.
But definitely, whatever your specific question because interest rate has started harder. And the MCA that has already been changed, even the RLLR has also been because as per the RBI guidelines, all the retail and the MSE loan has to be linked with the external benchmark.
When external benchmark is already increased naturally, there will be an increase in the EMI or they have to make payment. But as on date, we have kept our watch open for this also and we are really -- we are thinking how to address this. As of date, we are not seeing any pressure.
Okay, sir. And now sir, in case of this NARCL, you said the 9 account of INR 2,752 crores have been considered now. And out of that 5 you have got already the offer from NARCL for INR 1,099 crores.
So this is our portion in the consortium or -- the total consortium amount.
Yes. I have -- I'll get clarified also. Out of the 9 accounts, in 5 accounts we have got the offer from the NARCL, INR 1,999 crores is the outstanding. It is not the amount also. It is outstanding in my book.
Because in some of the accounts, the other bank is the leader of the consortium. So it is only a my share INR 1,099 crores is my outstanding...
Approximately a realization of about 20%, 25% because in 1 account, we see only 5%. In another account, we are seeing about 35%. So in this 5 accounts, you must still buy now calculated that how much percentage of it, especially with NARCL, we are getting -- forget about the cash recovery and the SRs, but what is the total recovery you expect from these 5 accounts, sir?
Yes. Ajmera Ji, it will be finalized only after the completion of the processes. I may tell you in 1 account we were the leader of the consortium. And we have got the -- it is in the newspaper also, it is in the newspaper also, where we have got the offer from the NARCL, around INR 238 crores. I can take the percentage, what is my share also.
But we are -- but we have gone to the Swiss challenge method. So we have got around more than INR 400 crores. So it is very difficult to say what will be the actual recovery. It is under process. The final outcome will be -- we will be in a position to -- what will be the actual recovery.
Okay, sir. My next question is on the treasury front. How are we placed like so far, you have managed it well. But going forward, if we expect about 50 to 60 basis points is still rise in the interest rate, depending on the fed rate today, late night coming in.
So how much we are pushing for any treasury mark-to-market losses and also the trading income point of view?
My treasury is very active. My treasury is very active and they are making very good profit also. But on account of the increase in the interest rate, which is the function of the interest rate not the function of the treasury person also. So as of date whatever the requirement of the mark-to-market provision we have already provided in the June and September also. So we are immunized.
So whatever you are saying, if there is a further increase in the rate of interest also. So naturally, we have to make the provision -- additional provision we were required to make also. But if you say it is keeping on the changing also. Why I'm saying keeping on changing that if you see the 10-year G-SEC, it was 7.45 in June 2022. And in between also, it has reduced to 7.19 also. So treasury, it is a function of the treasury. They must have taken any provision also to make the profit also.
But as on date we are immunized, we have provided. But definitely, if there will be a further increase in the rate of interest. So we have to make the provision also, yes.
The next question is from the line of Ashlesh Sonje.
Sir, just 1 question from my side. Can you explain what is driving the 27% Q-o-Q increase in staff expenses this quarter?
Ashlesh, your voice was breaking, can you repeat your question? Ashlesh, can you repeat your question, your voice was breaking.
Sir, I think the question was what is the reason behind sharp increase in the staff cost on a Q-o-Q basis?
Okay. Already, I have explained to the Anand, there is no increase. Last quarter on account of the increase in the interest rate, AS provision in the June quarter as well as in the March quarter, there was a reversal.
But in this particular quarter, there was some provision also in the -- that was the only reason. Because interest rate, if you compare from the June to September, it has reduced. Because it was 7.5% in the June quarter and 7.45% there was a difference of only 5, 6 basis points.
On account of this, we have to make the provision for the AS-15. Otherwise, my employee cost is flat. That is whatever increase you are seeing that is on account of the AS-15. Because last time, there was a reversal. And whatever the reversal was there, we have not utilized. We have made the entire provision of the family pension, which was supposed to be in 3, 4 years.
The next question is from line of Ronak.
Am I audible?
Yes, yes, yes. Yes, Ronak Ji, please.
So I wanted to ask what is the segment wise slippages breakup for the quarter?
Segment wise slippage, the bifurcation of the INR 5,978 (sic) [ INR 5,979 ] crores is INR 2,785 crores in the agriculture. MSME, there is INR 1,597 crores. Retail INR 623 crores and others INR 296 crores and remaining INR 378 crores in the existing account. So it is coming INR 5,979 crores.
And 1 more question was what is the guidance on advances and deposit growth?
Advances growth last time, we have given the target of around 10% because we have already achieved 12.84%. So we are revising our guidance. Current year, there will be a 12% to 13%. But deposits, I think there is no need for any guidance also. Deposit is the function of the how much you require.
Whatever the increment growth is there. So either we can raise the fund. If the fund is not available at a cheaper rate, we will also try to redeem some of the SLR, if we are in a position considering the movement in the interest rate. Otherwise, need based, we will raise the deposit from the market.
Okay. And what will be the cost income ratio and slippages and the credit cost for the next quarter?
Credit cost, if you see, it was reduced to -- last quarter, it was 2.46%, it is usually 1.76%. So we are giving the guidance. It will be around 2% for whole of the year. And cost-to-income, I think, it will remain in the same [indiscernible] as on date. There is not much -- as I told you, we have to provide for the wage revision. Also the little bit, there may be an increase also.
But we are trying to increase the NII and also the other income. So whatever the ratio, the ratio should not be impacted.
The next question is from the chat window. So the question is, sir, on the loan book breakup by benchmark that you present on the presentation, the share of FCI and other currencies loans, other variable debt loans seems really high at around 27%. While your overseas book seems to be only 5% of the overall loans.
So can you give some color that why the share of FCI and other...
Yes, yes, I can give you the breakup of this also. Actually, 26% we have given the which is in the foreign currency and the others. The major portion of this in the -- this -- which is apart from the RLLR or the MCLR. The maximum portion is coming in the -- in this particular bucket is the TBLR, all of the loans which have given this 26.48%, it is basically on the floating side also.
So I can give you the further breakup of this TBLR 9.07%, Elite is 12.43%. Elite is another category of the repo-linked rate and the foreign currency is the 4.98%. It is floating. I'm confirming it is floating. Your worry will be whether it is a floating or fixed.
As on date, my fixed rate is only 7% to 8% only.
Okay. And a related question to that is regarding the overseas book growth. So that book has -- saw a healthy growth this quarter. The question is, if you can just give us some color on the from where the growth is coming? Is it local credit or buyer's credit or Indian -- or linked to Indian corporates or any other refinancing or I mean, what it is?
Major portion is from the bank -- to the bank also, major portion in this is the exposure to the bank.
Bank, again, sir, I mean, is it related to Indian corporates or buyers credit or...
Some portion to the Indian corporate also is there, but major portion is the total exposure in the loan to the banks, where we are getting some spread.
Okay. Understood, sir. Understood. Okay. The next question is from the line of Mr. [ Satish. ]
[Foreign Language].
[Foreign Language].
The next question is from the line of Mr. [ Priyansh. ]
So like end of February 22, Mr. Tushar Mehta, Solicitor General, has submitted to Honorable Supreme Court that INR 18,000 crores have been recovered from the 3 defaulters, big defaulters, Nirav Modi, Choksi and Vijay Mallya. So sir, how much is the share of PNB, proportionate share of out of that recovery and when that money is going to come to our bank.
We are trying in the process of the recovery also. So it will take some time. We are taking -- because some of the amount has been which have been taken by the [indiscernible] have been given to the government, some has been released to us also. So we are taking up the matter. It will take some time. But I think around -- maybe around INR 800 crores to INR 1,000 crores, I think we can have another [indiscernible] -- that is our estimation.
Few questions, sir, from my side. Sir, you mentioned this SMA-2 number, which has come down from INR 10,000 crores to INR 4,600 crores. This is from September to as on date, right, 1, 2 days before.
Yes.
So sir, this INR 30,000 crore is actually corresponding to this INR 4,600 crores of SMA-2, right, on that basis. If you can share the SMA-0-1-2 number as of September numbers, sir, so that would have over quarter-to-quarter...
It is not INR 40 crores. It was INR 91,000 crores plus in this number. It was INR 91,000-plus number because SMA-0 on account if there is a 1 day, INR 71,614 crores was the number, which has reduced to INR 16,183 crores. I may tell you, it is not a -- sometimes, it is not the actual SMA-0. Please try to understand. I'm trying to explain that is an accounting issue also.
Suppose we have given some loan. We are working on that. We are trying to address that issue also. Suppose we have given a housing loan, their installment is due on the second of the month or the third of the month or the fourth of the month.
So whatever as on date suppose we are debating the interest on the last day of the month. So system is generating the demand of the interest where it is included in the EMI. The very next day, it is coming in the SMA-0, but moment we are receiving the EMI installment it is brought down immediately.
So we are trying to change the system also. So it is accounting issue sometimes on account of the -- due to default, it is not the actual SMA, but it is coming.
Understood, sir. Understood. And secondly, sir, is there any NPA recovery that goes to interest income in this quarter or in general also that if there is an NPA recovery, how do we apportion that towards principal interest...
Yes, definitely. I told you INR 8,564 crores was the total recovery. And if you see my movement of account, total cash recovery and upgradation is INR 6,497 crore. It means INR 1,705 crores has come either in the recovery in the written off account and either in the recovery in the interest. So I have the number of the recovery in the written off account is INR 1,053 crores. If you reduce INR 1,053 crore from the INR 1,705 crore remaining is in the interest income.
Understood very well explained, sir. So the principal or the order would be NIIC and then lastly, in the provisions, right? Is that the way to understand. Because that is what most of the...
It is our -- as per the Board policy. It is our -- the Board policy. This, I can tell you, yes.
Sure, sir. And last thing, sir, because you would have seen a lot of question on staff cost. It would be easy, sir, if you can bifurcate either now or maybe from next quarter onwards, the proportion into cash salary and AS-15 provisions so that there is more clarity that...
I am going to tell you that this particular quarter, around INR 300 crores was AS-15 provision. The remaining was the cash basis, yes. Whereas there was a reversal in the last quarter because I told you last quarter because there is a gap of the 5, 6 basis points in the G-SEC. In September it has reduced as compared to the June.
Next question is from the line of Mr. Bhavik.
Taking this question further. Hello? Am I audible?
Yes, yes, Bhavik. Please go ahead.
Yes. Taking this question further. So the recovery, which is apportioned to NII, sir, what was the amount last quarter? I understand this quarter it was INR 650 crores.
INR 650 crores. It was on the same rate, hardly a difference of the INR 50 crore, INR 100 crore. So you cannot say that NII has increased only on account of discount because there is hardly a difference of INR 50 crore or INR 75 crore.
Sir, will this sustain over the coming quarters? I guess this will be a function of recovery, right? The traction of recovery? Or how do we look at it?
Yes. Yes, definitely recovery is in the INR 7,057 crores, INR 8,500 crores plus, and we have the target of the INR 32,000 crores whole of the year, this will remain same also. Some of the accounts, which is substandard also if they will be upgraded also, so entire money, which is over to, it will come to the interest income only.
Sir, next year, what would be the recovery target then?
I think, first we should be in a position to recover INR 32,000 crore, then we will set a target for next year also. But next year, I told you because slippage will be very less recovery will be the only focus area. So that will be the golden period for the Punjab National Bank.
Okay. And sir, last question from my side. Sir, for example, if repo hike happens today, the reset is on T plus 1 basis or it happens after...
Same. Very next to day. Very next day.
The next question is from the line of Mr. Daga.
So wanted to ask sir, what is the reason for decline in core fee income quarter-on-quarter?
Fee-based income quarter-to-quarter, if you see there is on account of the -- some exchange income also. Some of the processing fee also -- normally the processing fees, we are mostly recovering in the first quarter. That is the major reason, otherwise not.
And if you see the year-to-year also September 2021, it was INR 1,162 crores and it has improved to INR 1,307 crores year-to-year, it is increased per quarter on account of policy, accounting policies also.
Okay. And another question was that why is there a depreciation on investment in the second quarter despite some moderation in 10-year yields quarter-on-quarter.
That was not the -- that was 2 type of provision. One is the INR 551 crore was in the provision side on account of the NPI. NPI that is not in the mark-to-market. That is not in the mark-to-market. So whatever the provision is there, which you are saying that is we have taken some position also. We have taken some position because I told you, please remember my sentence also the 7.50% was the yield in the June and in between 7.19% was also the -- it has gone to 7.19%.
Maybe some position must have been taken. So this was the reason of that also.
A couple of questions for the chat window. Question number was, sir, last quarter, you mentioned some INR 25 billion of restructuring for the earlier restructured scheme, which was CDR, SDR 527, et cetera. So if you can just provide the number for the same number for the corresponding this quarter?
Number we are restating now CDR, et cetera, is not as of date -- all the account of the CDR, SDR has already been returned to the NPR. So as on date, only the OTR 1 and OTR number is relevant. We have already given. As on CDR, SDR, I think we don't have any audit pending, as on date.
Okay. Understood. One more question from the chat window is relating to the food credit. So if the food -- I mean, if we see that RBI data of the food credit growth, that growth is coming down for the last couple of months. And related to that is that 1 of the larger government, semi government kind of account has a larger exposure, you have something around INR 14,000 crore, INR 15,000 crore related to food credit of India.
So if you can just provide us what would be a total exposure of Punjab National Bank to FCI? And are there any concern in that particular account?
I may tell you 1 more thing also particularly. There is a 2 type of the food credit. Like you have raised the specific question of relating to FCI. In FCI some parts are coming under the food. Some part, they are after trading from the market from the market, which is [indiscernible] food credit. I may tell you, we were having the very good exposure on the FCI before September. But as on date, September, apart from the food credit, we are having the nil exposure.
Whatever food that is there. But apart from the food credit, it has become paid by them.
Okay. Okay. And sir, how the exposure to FCI would be divided amongst many lead bankers like including you and other PSU banks?
That is based on the data -- every year, they decide how much share based on your total exposure to the balance side register? That is on the base on the balance side of the each and every bank. On the basis of the assets of the particular bank, it has been divided yes, on the same proportion.
Okay. Understood. And 1 last question from the chat what is the strategy for gold loan business? What is the target for gold loan business going ahead?
Gold loan, if you see the gold loan as compared to the other bank, our portfolio was very less. We have revamped our gold loan scheme, which is at par with the industry also. And we have given a good target around INR 4,000 crore, INR 5,000 crore for the bank as a whole for this current financial year.
Okay, understood. And I think that was all. I mean that was the last question from the investor side. So I think we can now close this question-and-answer session. I hand over the mic to MD, sir, for your closing remarks.
Thank you very much, Suraj Ji, very live interaction with all the analysts also. And whatever -- I think whatever their worry and the question also, we were in a position to reply all the questions also. So we have noticed some of the suggestion also. 1 or 2 good things, there was a good suggestion also. So we will try to implement those suggestions for the betterment of the country. So I may tell only the bank is on the right path. Bank is on the right. Why I'm telling why the bank is on the right path, operating profit is increasing. Net interest income is increasing. Recovery is increasing, slippage is declining as compared to the recovery number, gross NPA is reducing, net NPA is reducing and PCR is reducing.
Only concern -- you may be aware also only the net profit also because we are addressing the earlier issue which is also RAM, because there was a lot of delinquency in the RAM. So time will come in the -- after 1 or 2 quarters. I think we will be in a position to show the decent net profit also. So this is my assurance to all the investors also. Nothing more I want to add. I want to convey my thank you to all the persons who have joined this meeting on the announcement. Thank you. Thank you very much.
Thank you, sir.