Loan growth jumped to 15.8% YoY in Q4FY26 (all-round).

On loan growth - have you tightened or been cautious on some segments, especially PLCC, overall retail, corporate growth? Loan growth is a tad lower than last few quarters. Is there any cautious approach?

Nothing specific incrementally in terms of caution on the credit side. We are pretty comfortable with what we are underwriting. Of course, on personal loans and cards, we had tightened a few quarters ago, and that is showing up in the volumes over the last couple of quarters. Largely a function of what is happening in the system. On the pricing side, some consciousness given that during this quarter, we were at the cusp of the downward movement in benchmark rates. So, we had to be a little more disciplined in terms of the spreads.

On deposit growth - banks are cutting deposit rates to transmit policy rates. With the liquidity situation improving, is there confidence that sustained deposit growth will now flow through?

We have seen liquidity improve substantially over the last couple of months with all the measures the central bank has taken. Deposit growth for us has continued to be quite strong. The numbers for the fourth quarter have also been pretty strong. As the repo rate has fallen by 50 bps, that will start to see a transmission into deposit rates, which is what has started. That's in the natural course of things.

On margin - there has been 21 basis points expansion in yields. Partly lower reversals on KCC. Was there any one-off interest in recovery besides interest on income tax refund?

There was no one-off in the yield on advances. The largest component driving up the yield was the benefit of the day count, which brought down the yield in Q2 vis-a-vis Q1. We had mentioned at that time that this would reverse out largely in Q4, which has happened. Second factor is the absence of the KCC non-accrual in Q4 relative to Q3. We did speak about the 2 bps of interest on tax refund. There would be some better returns on liquidity deployment, a little better interest collection on NPLs, but no single item that requires to be called out.

On business banking - loan growth has been exceptionally good. Can you help us understand the risk in this business? How are you assessing incremental risk versus your corporate book? Is it going to contribute to higher average credit cost?

We have invested in three aspects - distribution (equipping more branches to deal with the business banking segment), credit underwriting models and processes, and digital and transaction banking capabilities. The risk profile is a fairly granular portfolio, well diversified geographically and industry-wise. It's pretty at the higher end of the quality spectrum. In terms of credit performance, it has actually been quite good. Currently, credit costs are pretty low, almost mirroring what we are seeing on the corporate side. But it has to be tightly monitored as we go along.

On asset quality - the normalisation trend has reached a fair degree of stability. How comfortable do you feel about asset quality now versus six months back? How is unsecured retail trending?

We were always quite comfortable. The corporate portfolio continues to behave extremely well, as does business banking. On the retail secured products, behaving quite well. On unsecured, the NPL formation has broadly stabilised. We would hope for it to come down, but let us wait for that to happen. Maybe it will take another couple of quarters. This quarter we had a very low credit cost of some 30 basis points. Even adjusting for KCC provisions writeback, it will still be just about 40 odd bps. As we go into the year, what happens to the overall economy globally and in India and trade related issues is something we will have to watch out for.

On growth - retail growth has moderated. With other banks becoming more aggressive, will growth remain skewed in favor of select products that meet PPOP/profitability thresholds, or can we expect more broad based growth?

We are really focused on the risk adjusted PPOP. If we want to make tactical calls on pricing in a particular customer or segment, our funding franchise gives us the flexibility to do that. Overall, we are quite focused on the overall PPOP. We would continue to see pretty healthy growth on the business banking side. Retail, we will see how the market evolves. As the rate environment stabilises during the year, pricing may also stabilise. On the unsecured side, probably the growth has bottomed-out. We may see some improved growth from here.

On PSL - stronger growth in business banking, slightly toned-down growth in retail and rural. How is the Bank faring on the PSL front?

Pretty similar to past quarters. We meet our overall PSL requirement. We also meet our MSME requirement. In fact, overall and MSME, we have some surplus. In some of the categories like the small farmer and weaker section, we do have shortfalls which we have addressed through either buyouts or through purchase of the PSLC certificates.

On income that moves on the interest income line on recovery of bad loans - if security receipts come in on cash basis, does anything move to the interest income line?

The cash portion of the NPA sale would be reflected as a writeback in provisions, not as interest income. There will always be some interest recovery on NPLs in any quarter. It may vary a little quarter to quarter, but it will always be there.

On the current differential on benchmark loans between private and public sector banks - how much does it hurt you right now?

Clearly it is an issue. In retail, it's not just about pricing because you really need the distribution scale, processing capacity to back up your pricing. There are very large, capable competitors who are also priced meaningfully below us. It does create some challenges in terms of growth, but that's part of life. We will have to keep dealing with it as we go along and look at how we can drive other levers to continue to maintain profitable growth.

On unsecured loans - have you well passed the peak in terms of fresh slippages?

I would say it has, it's broadly stable. We are yet to see it coming down meaningfully. More importantly, the behavior of portfolios originated more recently, post making credit changes maybe 18 months ago, the behaviour of those portfolios gives us a fair degree of comfort on building the portfolio incrementally.

On RWA growth - it's 17% year-on-year for loan growth of around 13%. What drove the faster growth in risk-weighted assets?

It is an evolving mix of the different categories of loans and how one classifies them, what you can justify, in which risk-weight category. In the year end, market risk also went up because we did take some larger positions as the interest rate environment turned favorable for taking trading positions.

On net-worth movement in the quarter - it's up Rs. 20,000 crore quarter-on-quarter, which is higher than the PAT. Is that the AFS mark to market that's happened?

One of the main items this quarter would be the issue of shares, the recording of the additional investment in ISec. We would have issued shares to the minority shareholders of ISec - while it's capital neutral, it would have increased the net-worth by a substantial amount. That would be the biggest item.

Would you think the worst of the CASA pressures for yourself and the sector are largely behind?

Logically, that should be so.

On CASA pressure being over - why do you say that? Also on vehicle growth slowdown - is it more competition or are you intentionally scaling back?

I said logically that should be so given the monetary easing, the improvement in system liquidity and to the extent that it was a factor, some calm in capital markets. But it's something we will have to see as we go ahead. On vehicle growth, it's more the underlying demand and maybe at the margin a little bit on the pricing side, nothing on asset quality per se.