FY26 credit beat 19.44% vs 12-15% band.

If I look at the guidance given for 2026-27, it seems that either some geopolitical situation is there in your mind, or the impact of the West Asia war. Have you already started seeing some kind of stress, especially in small businesses and MSME, due to the West Asia war and other geopolitical situations? How do you plan to deal with it?

Thank you, Ajmera ji. First, let me talk about guidance. You have apprehended that because of the West Asia crisis, we have toned down the guidance. Let me make it very clear that if you look at our guidance for the last three years, it has been in this range only, and our achievements have always surpassed the guidance. Last year also our guidance was 12 to 14% credit growth; this year also 12 to 14%; and next year also we are planning 12 to 14%. So, the guidance remained 12 to 14%, but achievements were much higher than guidance. So similarly, guidance continues in the same range, looking at all scenarios. Coming to the impact of the current situation, I would request you to look at our SMA numbers. Consistently, our SMA numbers are under control. More than 1 crore of SMA 0, 1, and 2 together are at 0.45% of standard advances. While SMA 2 is lower and SMA 1 is higher, this is due to the February effect. So it is not that SMA 1 has jumped significantly; overall SMA remains the same, only bucket shifting is happening.

One phenomenon we are seeing in some other banks is that when profits are good and results are strong, they start providing additional provisions on standard assets, more than the IRAC. In our bank, provisions seem to have gone down. Are you not anticipating unexpected impacts, like ECL, etc.? Even in case of wages, the salary i.e. the employee cost has gone down to 182 crore as compared to 278 crore in the last quarter. How are you dealing with those unexpected or unforeseen circumstances without creating some kind of a buffer?

Ajmera ji, last quarter we declared a buffer of around Rs.720 crore ECL provision, and this quarter we have increased it to 1,038 crore. So, ECL provision held as on this quarter is Rs.1038 crore, plus Rs.341 crore contingency provision is also made. So, if we take both of them together, more than 1400 crore is already available towards ECL. Along with that, during COVID times, we made Rs.530 crore of provision for COVID-19. So that is also available. So, all three put together today, we are holding around Rs.1,900 crore of additional provision as a buffer towards our ECL framework. Now coming to the wage part. See last year, we made an additional provision of Rs.260 crore towards our PLI, the previous financial year, whereas the actual payment is around Rs.100 odd crore only this year. So, we are still carrying Rs.160 odd crore of provision for the next financial year. Last year we made additional provision, which we are not required to make this year. So, on that account, our wage or employee cost is slightly down.

You already got the Board approval for the QIP. But what are the plans in the immediate future? With this present share price, when you have a cushion of Rs.1,900 crore, at this price, would you like to come out within this quarter? Do you have any plan for that?

So, this quarter we do not have any plans. We will be going to the AGM for approval. First, we will get the approval of the shareholders, and thereafter, at the right opportune time, when the market also supports, we will go for the QIP. That will not be in the immediate, this quarter.

On the credit front, for the last three years it has been 15%, 17.5%, and now 19.5% to 20%. Going forward, I believe that even though the targets are very modest, you will be crossing that. So, can I know about our sanctioned pipeline, or what kind of industries or businesses where we see the scope for increasing further and maintaining this kind of growth in credit going forward?

See, we have around Rs.14,000 crore of pipeline in the Corporate segment currently, and we have certain sanctions already in place, but because of the pricing issue, we are not able to disburse. We do not want credit growth in the Corporate segment at the cost of margins. So, that is the reason we are not growing corporate credit below our expected price. The growth or demand is coming from renewables, data centers, smart metering, and even road projects have started coming a little. So, there are a number of areas from where the growth is coming, and there are many sunshine sectors. But pricing is the biggest challenge, where we would not like to compromise before entering into a deal.

We have seen a good, healthy deposit growth on a QoQ basis, about 6%. So, how do you view the same growth going forward, because if there is a slight rebound even in capital markets, do you see this sticky deposit growth staying intact? Secondly, from last quarter to this quarter, our lending split, we have cut quite a few larger cheques to more AAA-rated corporates, particularly on the PSU side. So, incrementally, how has the yield been on that book, and if we were to lend more in the AA bracket, would our yield be slightly better?

Thank you, Sumere. First, let me talk about deposits. Earlier, we were not focusing on deposits because our CD ratio was quite low. Now we have reached a CD ratio of around 80%, and our target was 74 to 77%. That is the reason we focused more on deposits. While focusing on deposits, we have not stopped chasing CASA. So, our focus while raising deposits is more on the Retail franchise than bulk deposits. Going forward also, when we have to support growth, deposit concentration will continue to focus on Retail term deposits, savings, and current accounts, with some portion in bulk deposits. As far as AAA-rated exposure is concerned, if you look at our balance sheet, though this quarter we have increased exposure to AAA-rated and PSU, the same trend was there last year also. Last year, in March '25, AAA-rated exposure was around 33%; now also it is around 33%. AA was 29%, now it is 26%. Whenever there is a better opportunity, we will continue lending to AA and A-rated accounts as well, in additional to AAA-rated accounts.

On the digital side, we have seen very good traction, particularly in mobile banking. Any new digital initiatives we are working on, especially for younger customers who are high-volume transactors on UPI and possibly new to credit? Also, in Retail loans, which products are covered under the 'others' category? 25% of overall Retail loans and has seen a 40% YoY growth. And how is the demand for vehicle loans in the current quarter?

On digital, we have revamped our entire digital journey. On 6th January, 2025, we launched our digital transformation project, Parivartan, and since then, we have been launching customer journeys. Till now, 31 journeys have been launched across Retail, MSME, Agri, and liability products. Total digital business has booked is Rs.25,000 crore, with Rs.11,000 crore in advances and Rs.14,000 crore in liabilities. For young customers, more than 50% of fixed deposits are now created digitally through the mobile banking app. More than 50% of loans against FD are also processed digitally by our customers. Our car loan STP journey is well accepted, with more than 50% of car loans processed digitally. For MSME, we have launched GST Smart Finance, MSME Smart Finance, which is also very well accepted. For the ease of our young customers, we have revamped the UI/UX of our mobile app, and its rating is in the range of 4.7 to 4.8 on app stores, among the best in both the public and private sector banks. Second, you talked about Retail. In Retail, the 'other' portfolio includes a small portion of co-lending; it's not huge. It mainly is gold and staff loans. So gold loan portfolio out of that is around 5,400 crores. And the growth which we are seeing in the other portfolio is mainly coming from the gold loan portfolio.

Which external benchmark rate would we have linked our loans, could you just shed some light on that?

Mainly it is Repo linked rate. More than 65% of our portfolios linked to Repo. Because if you look at our Retail and MSME, that itself is a huge portfolio. So, RAM is 65%. So, Retail and MSME itself is more than 1 lakh crore. I think around 66,000 crore is Retail and 48,000 crore is MSME. Both put together is under Rs.116,000 crores. So, more than 50% portfolio is in that segment itself. So, 65%, because in some of the corporates also, they were short term loans linked to Repo rate corporate, in the Corporate book. Though they are sanctioned at MCLR, but they short term when they have to take WCDL, they take Repo linked rate.

On our cost to income ratio, we've shown a good decline this year down from 56.99 to about 52.92. So, we've seen a significant drop for a second year running. So, can you just speak about your initiatives on that front? And just one specific thing, in the last quarter we've seen a 45 bps increase also. So, if you can specifically speak on the cost-to-income bit first.

So, on cost-to-income front, we have taken a lot of initiatives. From the last 2-3 years, we are working and very closely monitoring our cost-to-income ratio. There are two components. One is to control the controllable cost; non controllable, you can't control. But controllable cost, how can you control? And also, how can you improve your fee-based income? If you look at our fee-based income, it has been growing on a QoQ and YoY basis. For fee-based income, our growth during this financial year is around, I think, 32%. 32% on a quarter basis, and on a YoY basis it is 25%. And the second, our control on the cost also, we have been very particular about the budget given to the field. And second thing, if you look at our previous year, our cost-to-income ratio was high. At that time also, our recovery from the written off accounts was very high. So, that was around Rs.2,400 or 2,500 crores. This year, it is around Rs.1,300 crores. In spite of that, we are able to reduce our cost-to-income ratio.

Now, if I look at a segmented NPA book, within personal loans if you see, there's been a slight uptick in this quarter. Any specific reason?

See, I think there is a very small uptick; it's not substantial. Against Rs.2,700 crores of book, our NPA is only Rs.39 crores. Yes, last quarter, it was Rs.31 crores, but this is 39 crores. That maybe because of some reasons. But there is no specific reason. It is hardly 1.43% in personal loan book. That's not a very big thing for us.

On the future vision, like your broader vision for the bank for the next few years. We've significantly improved our ROAs and our performance last few years, and now we're ending the year somewhere around 0.8%. So, what are the steps we're undertaking to build towards a 1% ROA franchise?

To build on ROA, we need to improve our net interest margin. We need to continue to focus on our CASA growth also, and our NI improvement also. So, there are a number of parameters where we are working. We need to work on our TWO recovery also. So, a lot of initiatives are being taken. We have reached 0.87, and if you look at for last so many quarters, every quarter, there is an improvement in our ROA. So, the same trend is expected to continue in the next financial year. And I believe that by end of next financial year, we should be nearing 0.95 to 1% ROA levels.

How do you see the impact of the ongoing West Asia war in your MSME portfolio? And what percentage of your MSME portfolio is covered under CGTMSE?

See, in the current scenario, we have not yet seen any major impact. Currently, if you look at our slippages, they are in tandem with the previous quarter from the MSME segment. There is no sharp surge in slippages, number one. Number two, if you look at our SMA book also, within the overall SMA book, the SME, SMA book, that is also in the same trend as the earlier quarters. So, I don't foresee any major impact. There can be some impact, but it's not going to be a very major impact in the next financial year. But to counter those contingencies in case, if at all, we have built already Rs.341 crore of additional buffers by way of a provision in our standard book. So, that will take care of all the requirement going forward. And around 40% of our advances are covered under CGTMSE.

What is your total AFS reserves as on FY26, March '26?

AFS reserves, give me a second. It's -140 crore. (Negative) 140 crores.