Q4FY26 absorbed the Rs. 646 crore fraud upfront.

Starting with margins. As you mentioned that margins have bottomed out this quarter. But how should we see margins moving in the next 2 quarters? Like should we place 4Q '26 margins to somewhere near the 6% number of 4Q '25?

In the last call also, we had said that we expect margins to definitely improve in Q3 and Q4. And my sense is by the end of Q4, the margin should be definitely upwards of 5.8%. We are also penciling in one more repo cut when we are giving this guidance.

On asset quality, while the MFI slippages have halved this quarter, but the non-MFI slippages continue to be around like INR20 billion-odd number. Like any sectoral color on where is this slippages coming from? And how should we look at the non-MFI slippages going ahead? And on MFI, like should we assume that this was the last quarter of pain?

MFI slippages have drastically come down. And for other than MFI, in terms of slippage ratio, that has reduced to 3.39% from 3.54% in the previous quarter. The SMA positions have improved at September. We definitely feel that this would be on a downward trajectory into Q3, Q4. And our overall guidance on credit cost still stays around that 2.05%, 2.1%, which we had guided in the previous quarter.

Lastly, again, on the draft credit risk, so have you done any analysis on the benefits which you'll get from that framework?

All of these are expected to kick in from April 1, FY27. Even on credit risk RWA, there will be a positive, net positive to our capital ratios. Taking all of this together, maybe ECL and the credit risk RWA and operational risk RWA, I think we will be broadly neutral on the capital front on transition.

So broadly, you're saying that in terms of credit cost, since you're holding on to that guidance of 2.05% to 2.1%, so which means credit cost in second half should be, say, 1.6%, 1.7% is what you're talking, right, and more or less that level in Q4?

Yes, you take it at 2.1%. When we do our modeling for Q3 and Q4, we do expect the credit cost to come down. So such that blend-blend it should come down to this number we're talking about. I want to just caution it's percentage of loans and not assets. So I guess maybe second half should be like 1.8% or so.

Coming back to that question on SA rate cuts. Most of your peers, the larger balance sheets, like names like IndusInd Bank, YES Bank have actually cut very aggressively on their savings rate. So why can we not use the lever at least to the extent of where the market is, which is at least 50 basis points below you?

At end of the day, if we do this, SA rate is even now coming to us at 5.8%. That's still cheaper than fixed deposits coming at 7%. So if you cut this and you need money, you'll go and raise it on fixed deposit. So I have a choice to make, whether I make everybody happy today or make people happy tomorrow. So I choose to make people happy tomorrow. Today, if we cut SA rates, I'll be a little on the edge.

Just had an observation that if you kind of look at some of the peer banks, the margin performance has been quite better than what we thought. But some of the peer banks probably have kind of even reported expansion in margins. We haven't cut SA rates, but that gives us additional ammunition. Have we kind of seen relatively slower decline in cost of funds?

We had a choice like many other institutions have done of cutting SA rates by 50 basis points and cutting term deposit by 50 basis points. That gives straight cash to the P&L. In our case, instead of exercising that choice of going 50 bps and 50 bps, we have chosen to go 100 bps into term deposit, so if you wake up 1 year from now, the net effect to the P&L is the same because CASA is 50%. So I'm playing the long game.

On the vehicle loans. This quarter, we have done very well, almost 12% quarter-on-quarter growth. What's driving that growth?

On 2-wheelers, as you would have seen in the past also, we have been gaining market share there. We have been expanding in that business. During the last part of the quarter, we also saw some pent-up demand typically in the last 10 days because of the GST announcements which came in, and that has given us this lift. We expect some bit of this traction could continue in Q3 as well.

Sorry I may have missed that for the non-MFI credit cost in percentage this quarter, you were saying how much was that?

It was broadly stable around the 2% mark, which was even there in the previous quarter. So for H1, the credit cost ex MFI is about 2.03%.

First is on MFI book. The disbursement is higher format versus last quarter, but the book has run down by around INR1,000 crores. So how do you see this book shaping up? Would you believe this will keep running down?

Our own guess is that by end of this year, it should stabilize, like it should taper off on the low bottom side by end of this year and then grow from there. We want to grow it because it has many benefits. It has private sector, it has weaker section private sector requirement. It makes money. The industry has learned its lesson.

The SMA 1 plus 2 portfolio that we show that has mortgage vehicle MSME. This MSME corresponds to which line item, just to pardon my ignorance?

This will essentially include Business Banking segment. This would include business installment loans, which Vaidya talked about. And in our disclosure, it largely corresponds Business Banking, we have given out separately. And there is an other component in the Business finance, which would include largely BIL and some of these loans.

If you have the number separate for current account and savings account, that will give a clear picture because the CASA as a block is doing very well.

Current account would be about, I would say, 14% of the total CASA deposits. And as I said, on an average basis, CASA did grow by 32% on a Y-o-Y basis. We have seen even our CA growth to be about 30%. Of course, in terms of the total proportion, our endeavor is to improve the CA in the overall pack.

How much of the business is driven by partners, partnership because the new guideline, you may have to change something when you source business from some other partners under CLP 1 and 2?

We don't do much of co-lending and all. To your previous question on current account, like I said that we are growing that. I'd imagine that we are about INR20-odd thousand crores of current accounts on our book or something like that, somewhere in that zone but it's growing.

If other than the microfinance sector, is there stress in any other sector?

The short answer is no. We are not seeing any. We are very watchful. We are seeing every business trends and signals like the numbers of every product on the SMA, broadly, I think they're all holding up well. So we're not seeing any significant amount, but we'll watch if we see any signal, we'll share with you.

My question was on Slide 65, where the cost-of-income ratio on the asset side has been a little sticky. So for last 3 years, it is on the upward trajectory. So just wanted to understand reasons for that and any levers for improvement on that front? And on credit cards, has seen a very sharp improvement in terms of cost to income.

On the asset side, the cost to income has gone up in the near term because of the income impact which we have seen, because of the sharp decline in the MFI book and because of the repo transmission, which has happened, while on the FD, the benefit will come with some lag. So directionally, while this may move slightly further into next 1 or 2 quarters, but directionally, we definitely see operating leverage playing out and this to bend down into the next year.

Just to clarify that. But that is fine for first half FY '26. But what I was trying to understand is that since FY '23, if you see that number, it has been kind of inching up from 52.7% to say, around 56% in FY '25 as well. So just wanted to understand in general.

FY '24 is 53.2%. In FY '25 is when the microfinance item hit us. So that's when you saw the number jump up from 53.2% to 56.1%. And even in this year, microfinance book shrinking, and that's why the mix is shrinking. So you've seen it go up from 56.1% to 59.1%. Now we believe that once this microfinance issue should be behind us and 1 year from now, the fixed deposit would have helped us reprice all the fixed deposit downwards meaningfully.