Q1 2027 State Bank of India Earnings Call

Speaker #1: जब 11 इंडियन के हाथ में पावर आता है, I have.

Pawan Kumar: When power comes into the hands of Indians. Yes. Good evening, ladies and gentlemen. I am Pawan Kumar, General Manager, Performance Planning and Review Department of the bank. On behalf of the State Bank of India, I am delighted to welcome the analysts, investors, colleagues, and everyone present here today on the occasion of the declaration of the Q1 FY27 results of the bank. I also extend a very warm welcome to all the people who are accessing the event through our live webcast. We have with us on the stage our Chairman, Sir Sri C. S.

Speaker #2: Good evening, ladies and gentlemen. I am Pawan Kumar, General Manager, Performance Planning and Review Department of the Bank. On behalf of State Bank of India, I am delighted to welcome the analysts, investors, colleagues, and everyone present here today on the occasion of the declaration of the Q1 financial year 2027 results of the Bank.

Speaker #2: I also extend a very warm welcome to all the people who are accessing the event through our live webcast. We have with us on the stage our Chairman, Shri CS Setty; our Managing Director, Corporate Banking and Subsidiaries, Shri Yashwini Kumar Tiwari; our Managing Director, International Banking, Global Markets, and Technology, Shri Rana Ashutosh Kumar Singh; our Managing Director, Retail Business and Operations, Shri Ram Mohan Rao Amara; our Managing Director, Risk Compliance and Saji, Shri Raviranjan; our Deputy Managing Director, Finance, Shri AS Paul; our Deputy Managing Directors, heading various verticals; and Managing Directors of our subsidiaries are seated in the front rows of this hall.

Pawan Kumar: Setty; our Managing Director, Corporate Banking and Subsidiaries, Sri Ashwini Kumar Tewari; our Managing Director, International Banking, Global Markets and Technology, Sri Rana Ashutosh Kumar Singh; our Managing Director, Retail Business and Operations, Sri Rama Mohan Rao Amara; our Managing Director, Risk Compliance and SARG, Sri Ravi Ranjan; our Deputy Managing Director Finance, Sri AS Paul. Our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the front rows of this hall. We are also joined by Chief General Managers of different verticals, business groups, Chief General Managers, and other senior officials of the circles, and various offices are connected through our live webcast. To carry forward the proceedings, I request our Chairman, Sir, to give a summary of the bank's Q1 FY27 performance and the strategic initiatives undertaken. We shall thereafter straightaway go to the question and answer session.

Speaker #2: We are also joined by Chief General Managers of different verticals, Business Groups, Chief General Managers, and other senior officials of the circles and various offices, who are connected through our live webcast.

Speaker #2: To carry forward the proceedings, I request our Chairman, Sir, to give a summary of the bank's Q1 financial year 2027 performance and the strategic initiatives undertaken.

Speaker #2: We shall thereafter, straight away, go to the question-and-answer session. However, before I request the Chairman, sir, I would like to read out the Safe Harbor statement.

Pawan Kumar: Before I request Chairman, Sir, I would like to read out the safe harbor statement. Certain statements in today's presentation may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual outcomes may differ materially from those included in these statements due to a variety of factors. Thank you. Now, I would request Chairman, Sir, for his opening remarks. Chairman, Sir, please.

Speaker #2: Certain statements in today's presentation may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances.

Speaker #2: Actual outcomes may differ materially from those included in these statements due to a variety of factors. Thank you. Now, I would request the Chairman, sir, for his opening remarks.

Speaker #2: Chairman, sir, please.

Speaker #3: Thank you, Pawan. Good evening, ladies and gentlemen. A very warm welcome to all of you, and thank you for joining us for today's analyst meet.

C. S. Setty: Thank you, Pawan. Good evening, ladies and gentlemen. A very warm welcome to all of you, and thank you for joining us for today's analyst meet following the announcement of our financial results for the Q1 of FY27. We greatly value this interaction as it provides us with an opportunity to go beyond the reported numbers and discuss the strategic direction of the bank, the operating environment, and our priorities for sustaining growth over the medium and long term. The Q1 has unfolded against a global backdrop marked by geopolitical uncertainty, evolving trade dynamics, and continued volatility across commodity and financial markets. Despite these external challenges, the Indian economy has continued to demonstrate remarkable resilience, supported by strong domestic demand, healthy investment activity, robust services growth and a well-capitalized banking system.

Speaker #3: Following the announcement of our financial results for the first quarter of FY27, we greatly value this interaction, as it provides us with an opportunity to go beyond the reported numbers and discuss the strategic direction of the bank, the operating environment, and our priorities for sustaining growth over the medium and long term.

Speaker #3: The first quarter has unfolded against a global backdrop marked by geopolitical uncertainty, evolving trade dynamics, and continued volatility across commodity and financial markets. Despite these external challenges, the Indian economy has continued to demonstrate remarkable resilience, supported by strong domestic demand, healthy investment activity, robust services growth, and a well-capitalized banking system.

Speaker #3: Credit demand has remained healthy across key sectors, and we continue to see broad-based opportunities for sustainable growth. As India's largest bank, our approach has always been to continuously evolve while balancing growth with resilience.

C. S. Setty: Credit demand has remained healthy across key sectors. We continue to see broad-based opportunities for sustainable growth. As India's largest bank, our approach has always been to continuously evolve while balancing growth with resilience. We continue to revisit and transform our internal operations. We have further simplified several customer-facing processes, including the launch of our digital re-KYC journey, which enables eligible customers to update their KYC seamlessly through a digital interface. We continue to strengthen the YONO ecosystem by introducing new digital customer journeys, including a seamless three-in-one onboarding process for savings, Demat, and trading accounts. We also introduced YONO G, our agentic AI-powered virtual round-the-clock assistant on YONO Business, and expanded WhatsApp banking for our current account customers. At the same time, we integrated our trade finance suite into YONO Business while adopting artificial intelligence in trade finance operations to improve turnaround time and customer experience.

Speaker #3: As we continue to revisit and transform our internal operations, we have further simplified several customer-facing processes, including the launch of our digital re-KYC journey, which enables eligible customers to update their KYC seamlessly through a digital interface.

Speaker #3: We continue to strengthen the UNO ecosystem by introducing new digital customer journeys, including a seamless 3-in-1 onboarding process for savings, Demat, and trading accounts.

Speaker #3: We also introduced UNOGy, our agentic AI-powered virtual round-the-clock assistant on UNO Business, and expanded WhatsApp Banking for our current account customers. At the same time, we integrated our trade finance suite into UNO Business while adopting artificial intelligence in trade finance operations to improve turnaround time and customer experience.

Speaker #3: On the credit side, we launched MSME Dream, through which we extended our business rule engine to cover SME loans up to ₹10 crore from the earlier ₹5 crore, enabling faster credit decisions while maintaining underwriting discipline.

C. S. Setty: On the credit side, we launched MSME Dream, through which we extended our business rule engine to cover SME loans up to INR 10 crore from the earlier INR 5 crore, enabling faster credit decisions while maintaining underwriting discipline. In the agriculture segment, we expanded digital document execution across the nation for Kisan Credit Card and agri gold loans to further improve customer convenience. Technology is also strengthening our risk management framework through PRISM, our predictive stress monitoring platform. We are leveraging internal and external sources to identify early signs of stress in borrower accounts. This initiative also enhances our preparedness for the implementation of the proposed expected credit loss framework. Collectively, these initiatives reflect our continued commitment to building a bank that is digitally enabled, operationally efficient, and well-positioned to deliver sustainable growth. Against this background, I am pleased to share that the bank has delivered another strong quarter.

Speaker #3: In the agriculture segment, we expanded digital document execution across the nation for Kisan Credit Card and Agri Gold loans, to further improve customer convenience.

Speaker #3: Technologies are also strengthening our risk management framework through PRISM, our predictive stress monitoring platform. We are leveraging internal and external sources to identify early signs of stress in borrower accounts.

Speaker #3: This initiative also enhances our preparedness for the implementation of the proposed expected credit loss framework. Collectively, these initiatives reflect our continued commitment to building a bank that is digitally enabled, operationally efficient, and well-positioned to deliver sustainable growth.

Speaker #3: Against this background, I am pleased to share that the Bank has delivered another strong quarter. Our net profit reached a record ₹21,121 crore, supported by healthy operating performance and disciplined cost management.

C. S. Setty: Our net profit reached a record INR 21,121 crore, supported by healthy operating performance and disciplined cost management. Operating profit grew by 9.77% year-on-year, while our domestic net interest margin remained resilient at 3%, reinforcing our confidence in maintaining our guidance for the financial year. Our balance sheet continued to expand with the total business crossing INR 110 trillion while deposits exceeded INR 60 trillion mark and advances crossed INR 50 trillion mark. Underpinned by our diversified business model, growth has remained broad-based across retail, agriculture, MSME, and corporate segments, reflecting healthy demand. On the liability side, we have continued to maintain robust deposit growth in a highly competitive environment. Our CASA franchise remains one of the strongest in the industry, providing a stable and cost-effective funding base. Strengthening and leveraging our liability franchise remains one of our key strategic priorities as we continue to optimize the balance sheet.

Speaker #3: Operating profit grew by 9.77% year-on-year, while our domestic net interest margin remained resilient at 3%, reinforcing our confidence in maintaining our guidance for the financial year.

Speaker #3: Our balance sheet continued to expand, with total business crossing ₹110 trillion. While deposits exceeded the ₹60 trillion mark, advances crossed the ₹50 trillion mark.

Speaker #3: Underpinned by our diversified business model, growth has remained broad-based across retail, agriculture, MSME, and corporate segments, reflecting healthy demand. On the liabilities side, we have continued to maintain robust deposit growth in a highly competitive environment.

Speaker #3: Our CASA franchise remains one of the strongest in the industry, providing a stable and cost-effective funding base. Strengthening and leveraging our liability franchise remains one of our key strategic priorities as we continue to optimize the balance sheet.

Speaker #3: Equally encouraging has been the sustained improvement in asset quality. Gross and net NPA ratios have further improved and remain at their lowest levels in over two decades.

C. S. Setty: Equally encouraging has been the sustained improvement in asset quality. Gross and net NPA ratios have further improved and remain at their lowest level in over 2 decades. This is a reflection not only of a supportive operating environment, but also of years of disciplined underwriting, stronger credit monitoring, and improved collection mechanisms. Our robust provision coverage ratio and strong capital position provide us with ample flexibility to support future growth while maintaining prudent risk standards. Digital transformation continues to be an important differentiator for the bank. Customer adoption of the new YONO platform has been increasing, with the digital acquisition continuing to grow steadily. Increasing digital transactions, wider use of analytics and AI, and continued automation of internal processes are helping us improve productivity, enhance customer experience, and optimize operating costs over the long term. Our subsidiaries have continued to perform well and remain important contributors to shareholder value.

Speaker #3: This is a reflection not only of a supportive operating environment, but also of years of disciplined underwriting, stronger credit monitoring, and improved collection mechanisms.

Speaker #3: Our robust provision coverage ratio and strong capital position provide us with ample flexibility to support future growth while maintaining prudent risk standards. Digital transformation continues to be an important differentiator for the bank. Customer adoption of the new UNO platform has been encouraging, with digital acquisition continuing to grow steadily.

Speaker #3: Increasing digital transactions, wider use of analytics and AI, and continued automation of internal processes are helping us improve productivity, enhance customer experience, and optimize operating costs over the long term.

Speaker #3: Our subsidiaries have continued to perform well and remain important contributors to shareholder value. The successful listing of SBI Funds Management Limited marks another significant milestone in unlocking value within the SBI Group, and we remain committed to supporting the long-term growth of each of our subsidiaries.

C. S. Setty: The successful listing of SBI Funds Management Limited marks another significant milestone in unlocking value within the SBI Group. We remain committed to supporting the long-term growth of each of our subsidiaries. Looking ahead, we will continue to focus on improving the quality of growth along with growth in volumes. We remain committed to maintaining a healthy balance between profitability, asset quality, capital efficiency, and customer franchise. At the same time, we will continue to invest in technology, analytics, and AI to ensure that SBI remains well-positioned to meet the evolving expectations of customers and the changing dynamics of the financial sector. As we progress towards our 75th anniversary in 2030, we are building an institution that is not only larger in scale but also stronger in capability, more agile in execution, and better equipped to support India's growth aspirations.

Speaker #3: Looking ahead, we will continue to focus on improving the quality of growth, along with growth in volumes. We remain committed to maintaining a healthy balance between profitability, asset quality, capital efficiency, and customer franchise.

Speaker #3: At the same time, we will continue to invest in technology, analytics, and AI to ensure that SBI remains well positioned to meet the evolving expectations of customers and the changing dynamics of the financial sector.

Speaker #3: As we progress towards our 75th anniversary in 2030, we are building an institution that is not only larger in scale, but also stronger in capability, more agile in execution, and better equipped to support India's growth aspirations.

Speaker #3: Before I conclude, I would like to thank all of our stakeholders for their continued trust and confidence in the bank. The performance we have delivered this quarter reflects the collective efforts of our employees, the enduring confidence of our customers, and the continued support of our shareholders and investors.

C. S. Setty: Before I conclude, I would like to thank all of our stakeholders for their continued trust and confidence in the bank. The performance we have delivered this quarter reflects the collective efforts of our employees. The enduring confidence of our customers and the continued support of our shareholders and investors. Thank you once again for joining us this evening. My colleagues and I will now be happy to take your questions.

Speaker #3: Thank you once again for joining us this evening. My colleagues and I will now be happy to take your questions.

Speaker #1: Thank you, Chairman, sir. We now invite questions from the audience. For the benefit of all, we request you to kindly mention your name and company before asking your questions.

Pawan Kumar: Thank you, Chairman, sir. We now invite questions from the audience. For the benefit of all, we request you to kindly mention your name and company before asking the questions. To accommodate all the questions, we request you to restrict your questions to maximum two at a time. Also, kindly restrict your question to the financial results only. No question be asked about a specific accounts, please. In case you have additional questions, the same can be asked at the end. We now proceed with the question and answer session, please.

Speaker #1: To accommodate all the questions, we request you to restrict your questions to a maximum of two at a time. Also, kindly restrict your questions to the financial results only, and no questions should be asked about specific accounts, please.

Speaker #1: If you have any additional questions, you may ask them at the end. We will now proceed with the question-and-answer session. Thank you.

Speaker #2: Yeah. Thank you. Good evening, sir. And of course, compliments to you all, sir, for the fantastic results as far as profitability goes. Definitely, I think this is the highest operating profit and net profit the bank has ever had in a quarter.

Ajmera Saab: Yeah. Thank you. Good evening, sir. Of course, compliments to you all, sir, for the fantastic results. As far as the profitability goes, definitely, I think the highest operating profit and the net profit of the bank ever had in a quarter, even surpassing that Q3 2026, which was also a good quarter profitability-wise. It is one of the highest. Having said that, sir, as far as the business growth is concerned, while we have seen that in some of the other banks, this quarter has been excellent, even exceeded whatever the expectation for there, for the entire deposit, credit, or entire business growth. In our case, if you look at the percentage terms, of course, this quarter has not been that good as compared to many of the other banks, though they are smaller in the size.

Speaker #2: Even surpassing that Q3 26, which was also a good quarter. Profitability-wise. So it is one of the highest having said that, sir, as far as the business growth is concerned, while we have seen that in some of the other banks, this quarter has been excellent, very I mean, exceeded the whatever the expectations for their for the entire deposit, credit, or entire business growth.

Speaker #2: In our case, if you look at the percentage terms, of course, this quarter has not been that good as compared to many of the other banks, though they are smaller in size.

Speaker #2: So, our deposits grew only by 0.5%. Advances at 2.32%, of course, is good, but the overall business growth is 1.33%. Secondly, sir, there is an element in the other operating expenses which has gone down in the miscellaneous expenses.

Ajmera Saab: Our deposits grew only by 0.5%, advances 2.32, of course, is good, but the overall business is 1.33%. Secondly, sir, there is an element in the other operating expenses which has gone down. In the miscellaneous expenses, if you look, it has gone down by almost about INR 3,600 crore in this quarter. Overall, the other operating expenses have gone down by almost about INR 5,800 or INR 6,000 crore, which are added to the profitability of this quarter. I don't remember exactly in miscellaneous expenses what was there in the last quarter of INR 7,774 crore, which has now reduced to INR 4,108 crore. If you can just give us a little highlight on that. Sir, I think after about many quarters, for the first time, there is an uptick in the absolute numbers of the gross and net NPAs in this quarter.

Speaker #2: If you look, it has gone down by almost about ₹3,600 crore in this quarter. Overall, the other operating expenses have gone down by almost about ₹5,800 or ₹6,000 crore, which has added to the profitability of this quarter.

Speaker #2: So one of—I mean, I don't remember exactly what was included in miscellaneous expenses in the last quarter, which was ₹7,774 crore, and has now reduced to ₹4,108 crore. If you could just give us a little highlight on that.

Speaker #2: The other thing is, sir, I think after many quarters, for the first time, there is an uptick in the absolute numbers of the gross and net NPA.

Speaker #2: In this quarter, and at the same time, the SMA numbers also—if you look at SMA 2, it is double than the last quarter.

Ajmera Saab: At the same time, the SMA numbers also, if you look at SMA 2, it is double than the last quarter. Even overall, SMA also have gone up a little bit. Fresh slippage has also gone to INR 7,000 crore from INR 5,500 crore. Does it give any indications that there is some stress which is building up in the system on that, and what do you see going forward in the coming quarters, whether it will continue? Similarly, if you look at the provisioning, of course, a small number, but the provisions have gone up. Other provisions have gone up to INR 1,270 crore as compared to reversal of INR 366 crore in the last quarter. What is the reason for that? On the whole, a good quarter, but few items like, as I said, in the miscellaneous income, as well as the expenses.

Speaker #2: And even overall SMA has also gone up a little bit. Fresh slippage has also gone up to ₹7,000 crore from ₹5,500 crore. So, does it give any indications that there is some stress building up in the system?

Speaker #2: On that note, what do you see going forward in the coming quarters? Will it continue? Similarly, if you look at the provisioning—of course, it's a small number—but provisions have gone up.

Speaker #2: Other provisions have gone up to ₹1,270 crore as compared to a reversal of ₹366 crore in the last quarter. So, what is the reason for that?

Speaker #2: On the whole, a good quarter. But a few items, like as I said, in the miscellaneous income as well as the expenses, miscellaneous income also has come down in this quarter.

Ajmera Saab: Miscellaneous income has also come down in this quarter by almost about INR 4,000 crore in the other income side. These are some of the pointer questions, if you can answer, sir. Thank you.

Speaker #2: By almost about ₹4,000 crore in the other income side. So these are some of the pointers; questions if you can answer, sir. Thank you.

Speaker #1: Thank you, Azmira Saab. I think a few questions I will answer, and my colleagues will take over from there. Deposit growth has to be seen from the lens of the liquidity which is available to us.

C. S. Setty: Thank you, Ajmera Saab. I think a few questions I will answer, and my colleagues will take over from there. Deposit growth has to be seen from the lens of the liquidity which is available to us. Deposits have become extremely competitive landscape and a lot of wholesale deposit rates have gone up, and which is not the rate which we are willing to pay. Our retail franchise has done extremely well. If you see our retail deposit, term deposit growth is 14%, continues to be 14%. Even in the last quarter, we did 14% deposit growth on the retail term deposits. More notably, savings bank, with a balance of INR 17.5 lakh crore base, has grown by 10%. With the whole industry is actually struggling with CASA, probably we are an exception that we have posted CASA growth rate.

Speaker #1: Deposits have become an extremely competitive landscape. A lot of wholesale deposit rates have gone up, which is not the rate we are willing to pay.

Speaker #1: Our retail franchise has done extremely well. If you see our retail deposit and term deposit growth, it is 14% and continues to be 14%. Even in the last quarter, we did 14% deposit growth.

Speaker #1: And the retail deposit term deposits, and more notably, savings bank, with a balance of ₹17.5 lakh crore base, has grown by 10%. And while the whole industry is actually struggling with CASA, probably we are an exception that we have posted CASA growth rate.

Speaker #1: And we also have very significant liquidity in our balance sheet. As as on 30th June, we had an excess SLR of 3.06 lakh crore.

C. S. Setty: We also have very significant liquidity in our balance sheet. As on 30 June, we had an excess SLR of INR 3.06 lakh crore. As we speak, also contributed by the FCNR(B) flows, we have excess SLR of INR 4 lakh crore. Which means that, we strongly believe, I mentioned earlier also, that the bulk deposit is a treasury activity. The treasury will decide whether they need to access this bulk deposit, or they can go to the market and borrow whatever is more acceptable rate. I think we really got this balance right in Q1, which is actually reflected in your cost of resources, overall cost what we paid for the resources. Contributing to the NIM stability. Almost seven basis point uptick has come mainly because of the cost of deposits going down.

Speaker #1: And as we speak, also contributed by the FCNRB flows, we have excess SLR of 4 lakh crores. So which means that, you know, we strongly believe I mentioned earlier also that the bulk deposit is a treasury activity.

Speaker #1: So, the Treasury will decide whether they need to access this bulk deposit or if they can go to the market and borrow, whichever is at a more acceptable rate.

Speaker #1: I think that we really got this balance right in Q1, which is actually reflected in your cost of resources—overall cost, what we paid for the resources.

Speaker #1: And contributing to the NIM stability, almost a 7 basis point uptick has come mainly because of the cost of deposits going down. And on the gross and net NPA, fresh slippages, I think we should not really be worried about this.

C. S. Setty: On the gross and net NPAs, fresh slippages, I think we should not really be worried about this. Just to give you a number, fresh slippages normally are higher in Q1. If you see, I think you should compare from Q1 of the last year to this. Out of this INR 7,000 crore slippage is what we had. As we speak, we pulled back almost INR 1,450 or INR 1,500 crore. There's no concern in any of these, gross, net or SMA front. On the miscellaneous expenses, if you have some data on that, you can respond.

Speaker #1: Just to give you a number, fresh slippages are normally higher in Q1. If you see, I think you should compare Q1 of last year to this one.

Speaker #1: And out of this ₹7,000 crore slippage is what we had. As we speak, we have pulled back almost ₹1,450 or ₹1,500 crore. So there is no concern in any of these gross, net, or SMA front.

Speaker #1: And on the miscellaneous expenses, if we have some data on that, you can respond. Okay.

AS Paul: Okay. In the miscellaneous expenses, apart from insurance expenses, where we have clubbed the insurance expenses to miscellaneous expenses this time. If I see, apart from insurance expenses, this quarter, it is INR 2,385 as against INR 2,266 of Q1 of previous year. There's hardly any increase. The insurance expenses as against INR 2,074 in Q1 last year, we have expended INR 1,723.

Speaker #3: So in the miscellaneous expenses, apart from insurance expenses, where we have clubbed the insurance expenses to miscellaneous expenses this time, if I see apart from insurance expenses, this quarter it is 2,085, 2,385.

Speaker #3: As against 2,266 of quarter one of previous year. So there's hardly any increase. And the insurance expenses, as against 2,074 in quarter one last year, we have expended 1,723.

Speaker #2: No, as compared to the last quarter.

Ajmera Saab: No, as compared to the last quarter.

Speaker #1: No, no, don't count compared with the quarter.

C. S. Setty: No, no. Don't compare with the quarter.

Ajmera Saab: It was INR 1,774 crore.

Speaker #2: 774 crores.

AS Paul: No. What happens in the Q4, most of the expenses get carried over in the last quarter. The right way of comparison would be.

Speaker #3: No, so what happens in Q4 is that most of the expenses get carried over into the last quarter. So the right way of comparison would be Q1 year-on-year, yeah.

C. S. Setty: Is a year-on-year.

AS Paul: year-on-year.

C. S. Setty: While we also realize that the Q4 bump will always create this confusion, we have decided that some of the expenses, the bulk expenses, will amortize over three quarters from starting with this quarter. You will not see that uptick which happens in the expenses in the Q4.

Speaker #2: While we we also realize that the Q4 bump will always create this confusion. We have decided that some of the expenses at the bulk expenses will amortize over three quarters from starting with this quarter.

Speaker #2: So then then you will not see that uptick, Q4.

Speaker #1: Similarly, in the miscellaneous income side also, which is

Ajmera Saab: Similarly, in the miscellaneous income side also.

Speaker #2: miscellaneous income again, don't compare with the Q4.

C. S. Setty: Miscellaneous income, again, don't compare with the Q4.

Ajmera Saab: lower INR 1,100 crores as compared to INR 6,600 crores.

Speaker #1: Compared to 6,600 crores.

C. S. Setty: In Q1 of the previous year.

Speaker #2: In of Q1 of the previous year.

Speaker #1: No, sir, Q1, sir, in the whole year, the overall business gets expand to 10, 12%. The whole picture changes. So some of these items are comparable with the last quarter.

Ajmera Saab: No, no. Sir, Q1, sir.

Ajmera Saab: the overall business gets expanded to 10,112%. The whole picture changes. Some of these items are comparable with the last quarter.

Speaker #1: Then gives a better.

C. S. Setty: Not necessarily. In our case, a lot of income is also booked in the Q4. I think earlier also we mentioned that sequentially the numbers sometimes can be a little confusing because either bulk expenses or bulk income is booked in In fact, for example, in Q1, the whole locker rents are recovered in Q1 itself, but you don't see that number in Q4. There are variations in terms of what are those bulk income streams which are available in each quarter. Ideally, it should be the year-on-year comparison.

Speaker #2: Not necessarily. In our case, a lot of income is also booked in Q4. So, I think earlier also we mentioned that sequentially the numbers sometimes can be a little confusing, because either bulk expenses or bulk income is booked in. In fact, for example, in Q1, the whole locker rents are recovered in Q1 itself.

Speaker #2: But you don't see that number in Q4. So there are variations in terms of what those bulk income streams are, which are available in each quarter.

Speaker #2: And ideally, it should be the year on year comparison.

Speaker #1: Sir, are you referring to the FCNR deposit overall? Under all these three items, how much money have we already generated in leveraging? I mean, how much has it added to our credit growth for this quarter?

Ajmera Saab: Sir, you referred on that FCNR deposit. Overall, under all these three items, how much money have we already generated? The leveraging, how much it added to our credit growth of this quarter?

Speaker #2: The credit growth is

C. S. Setty: The credit growth is

Speaker #1: Because of the FCNR.

Ajmera Saab: Because of that FCNR.

Speaker #2: Huh.

C. S. Setty: Ha.

Speaker #1: And.

Ajmera Saab: And

Speaker #2: FCNRB will contribute credit growth to our foreign offices immediately. But it augments our deposits here. So we have had almost 6,6 billion FCNRB deposit mobilized.

C. S. Setty: FCNR B will contribute credit growth to our foreign offices immediately, it augments our deposits here. We have had almost $6 billion FCNR B deposit mobilized, and we also have done one YFCB of a $1 billion and INR 300 million of ECBs. In all, about $7.3 billion have been funded by mostly our foreign offices. The $6 billion contributed predominantly to almost INR 45,000 crores in this later part of June. I think only seven, INR 8,000 crores was there in the June quarter.

Speaker #2: And we also have done one YFCB of a billion dollar. And 300 million of ECBs. So in all about 7.3 billion dollar. Have been funded by our mostly our foreign offices.

Speaker #2: So the 6 billion dollar contributed predominantly to almost 45,000 crores in this later part of June. I think only 7, 8,000 was there in the June quarter.

Speaker #1: All right. Thank you.

Ajmera Saab: All right. Thank you.

Speaker #4: Hello, sir. Congratulations.

[Company Representative] (Nuvama): Hello, sir. Congratulations.

Speaker #1: Thank you.

C. S. Setty: Thank you.

[Company Representative] (Nuvama): Hi, sir. Sir, I had a couple of questions. Firstly, your fee income has been very strong this quarter, and it's been strong for the last few quarters as well. In this quarter, the government fees have also grown quarter on quarter, which is not usually the case in the first quarter. If you could give some outlook on fees on how sustainable this is going ahead. That's my first question. Then I have a question on margins. If you could give any outlook on margins now, we did not give any outlook on margins in Q4, but because now there are a lot of moving parts. There's FCNR and there's competition in some segments. If you could throw some color on your outlook on margins, that'll be helpful.

Speaker #4: Sir, I had a couple of questions. Firstly, your fee income has been very strong this quarter. And it's been strong for the last few quarters as well.

Speaker #4: And in this quarter, the government fees have also grown quarter on quarter. Which is not usually the case in the first quarter. So if you could, you know, give some outlook on fees on how sustainable this is.

Speaker #4: Going ahead. So that's my first question. And then I have my a question on margins. So if you could give any outlook on margins now, we did not give any outlook on margins in the fourth quarter.

Speaker #4: But now, because now there are a lot of moving parts, there's FCNR and there's competition in some segments. So if you could throw some color on your outlook on margins, that will be helpful.

Speaker #4: And on FCNR, if you could clarify the deployment will be in overseas loans only, is it? Or No. Okay.

[Company Representative] (Nuvama): On FCNR, if you could clarify, the deployment will be in overseas loans only, is it?

Speaker #2: No. No. The credit growth would be visible because leverage is provided by our foreign offices. And you you're done or you have some more question?

C. S. Setty: No.

[Company Representative] (Nuvama): No. Okay.

C. S. Setty: No. The credit growth would be visible because leverage is provided by our foreign offices. You're done or do you have some more questions?

[Company Representative] (Nuvama): No. These questions.

Speaker #2: The fee income broadly I think is a I believe one of the positive developments in the last few quarters definitely have been on the fee income side.

C. S. Setty: Fee income broadly, I think, is, I believe, one of the positive developments in the last few quarters definitely have been on the fee income side. We still have a long way to go when compared to many banks. Fee income to overall income, we still are just about 15%. We have a potential definitely go up to 20%. Our focus on the fee income continues to be there. Whatever are the sub-themes in that, whether it is loan processing charges, government business, CVE activities, I think every area is being focused on.

Speaker #2: We still have a long way to go. When compared to many banks, our fee income to overall income is still just about 15%. We definitely have the potential to go up to 20%.

Speaker #2: So, our focus on fee income continues to be there. Whatever the sub-themes in that, whether it is loan processing charges, government business, or CVE activities.

Speaker #2: I think every area is being focused on. But the specifically on the government business, I think the 500 crores improvement what you see is a combination of a bit of accounting treatment because auditors have insisted that some of the cash management solutions what we provide to the government entities should be the income should be booked on accrual basis, not on the actual basis.

C. S. Setty: Specifically on the government business, I think the INR 500 crores improvement, what you see is a combination of a bit of accounting treatment because auditors have insisted that some of the cash management solutions, what we provide to the government entities, the income should be booked on accrual basis, not on the actual basis. 50% came from that accounting treatment and the rest of the thing has come from the usual growth, particularly on the railway side. Anything, Ram, you want to add?

Speaker #2: So, 50% came from that accounting treatment, and the rest has come from the usual growth, particularly on the railway side. Anything, Ram, you want to add?

Speaker #3: Yes, sir. You are right, sir. In fact, but for that adjustment, the growth would have been just around 29% year on year, which is like in a year it happens.

Rama Mohan Rao Amara: Yes, sir, you are right, sir. In fact, but for that adjustment, the growth would have been just around 29% year on year, which is like in a year it happens.

C. S. Setty: Yes.

Speaker #3: But we have switched to the accrual system now, so this is more robust.

Rama Mohan Rao Amara: We have switched to accrual system now. This is more robust.

Speaker #2: What are the other things, Maru?

C. S. Setty: What are the other things, Mahrukh?

Speaker #3: Margin outlook, I still hold. I'm not going to give you quarterly outlook. This full year outlook of 3%, which I mentioned right in the beginning of my speech.

[Company Representative] (Nuvama): Margin outlook.

C. S. Setty: Margin outlook, I still hold. I'm not going to give you quarterly outlook. There's a full year outlook of 3%, which I mentioned right in the beginning of my speech. We are sticking to that.

Speaker #3: We are sticking to that.

Speaker #1: Yeah.

Manoj Alimchandani: Yeah. Chairman, sir, and members.

Speaker #2: Mike, Mike.

C. S. Setty: Mike.

Speaker #1: Excellent performance. My name is Manoj Alimchandani, a couple of...

Manoj Alimchandani: Excellent performance. My name is Manoj Alimchandani.

C. S. Setty: Manoj, your mic is not yet on.

Speaker #2: Manoj ji, अभी भी activate नहीं हुआ, Mike.

Speaker #1: Yeah, yeah. My name is Manoj Alimchandani. A couple of observations. One is, hats off to you on delivering on everything you promised since the last quarter.

Manoj Alimchandani: Yeah. My name is Manoj Alimchandani. A couple of observations. One is hats off to you on delivering on everything you promised since the last quarter. An excellent value, over 10% in just in a quarter. At that time, we were around 920, 930 and today 1,100 plus. I would like to have your thoughts on a couple of very important issues. On the day you took over, you started building the blocks for value creation. Then we won the award for the best global consumer bank. We did the QIP also at a very good valuation. Now, a couple of thoughts when we look at are your aspiration and the people, management here on being the most valuable bank in India. In terms valuable bank as far as listing price is concerned.

Speaker #1: That's an excellent value—over 10% growth in just a quarter. At that time, we were around 920–930, and today we are at 1,100 plus. I would like to have your thoughts on a couple of very important issues.

Speaker #1: On the day you took over, you started building the blocks for value creation. And then we won the award for the best global consumer bank.

Speaker #1: And we did the QIP also, at a very good valuation.

Speaker #2: Now, a couple of thoughts. When we look at our your aspiration and the people management here, on being the most valuable bank in India, in term valuable bank as far as listing, price is concerned, one is that.

Manoj Alimchandani: One is that, also the valuable group when we consider the value of all our listed entities of the bank. How we are looking at that from the day you took over, there was a big gap between the two banks, the leading private sector bank, everybody knows that, and us. There was a big gap. Now, apparently that bank gap, when do we become number one and most valuable bank in India? On a sustainable basis. Sustainable basis. Also along with our subsidiaries and associate entities, hats off to you, we did the value unlocking of our mutual fund, which will be coming in the current quarter. Without that, we have achieved such great numbers. The value unlocking in NSE is yet to come, possibly in Q3.

Speaker #2: And also the valuable group, when we consider the value of all our listed entities of the bank. How are we looking at that? From the day you took over, there was a big gap between the two banks—the leading private sector bank, everybody knows that—and us.

Speaker #2: There was a big gap. Now, apparently that bank gap, when do we become number one in most valuable bank in India? And on a sustainable basis, sustainable basis, and also along with our subsidiaries and associate entities, heads off to you, we did the value unlocking of the our mutual fund, which is which will be coming in the current quarter.

Speaker #2: Without that, we have achieved such great numbers. And the value unlocking in NSE is yet to come. Possibly in the third quarter. So to would look at the thought process, you are having and all of us on how we look at being the number one bank in India, valuable bank, and a valuable group as a BFSI entity.

Manoj Alimchandani: Would look at the thought process you are having and all of us on how we look at being the number 1 bank in India, valuable bank, and a valuable group as a BFSI entity. One is that. Second thing is your thought process on this today, credit growth of 18%. Is that a one-off blip or we see it a sustainable credit growth of 18% plus, and being the leader in credit growth in the credit cycle ahead? Apparently the worst is over on the geopolitical front and inflation front also, and very clear signals given by the Fed and the RBI. Also one other besides, would like to have your answer in detail. My congrats to all the AMC team and the people sitting here for the value unlocking, and also congrats to you for getting a CFO for next five years.

Speaker #2: One is that. Second thing is our your thought process on this today, credit growth of 18%. Is that a one-off blip or we see it a sustainable credit growth of 18% plus and being the leader in credit growth in the credit cycle ahead?

Speaker #2: Because apparently the verse is over on the geopolitical front and inflation front also. And very clear signals given by the Fed and the RBI.

Speaker #2: And also, one other besides, I would like to have your answer in detail. My congrats to all the AMC team and the people sitting here for the value unlocking.

Speaker #2: And also, congrats to you for getting a CFO for the next five years. You promised that, and you delivered that. Hats off to you. And the CFO also has great experience in handling, you know, similar size.

Manoj Alimchandani: You promised that and you delivered that. Hats off to you. CFO has also great experience in handling similar size and larger fundraising just a few days back, leading roadshows worldwide. Looking forward to your answers.

Speaker #2: And a large fundraising just a few days back, leading road shows worldwide. So looking forward to your answer.

C. S. Setty: Thank you, Manoj. I think the first statement what you made, I consider as a blessing than question, I leave it there.

Speaker #3: Thank you. Thank you, Manoj ji. I think the first statement what you made, I consider as a blessing than question. So I

Speaker #1: Both.

Manoj Alimchandani: Okay.

C. S. Setty: The second question on the credit growth. I am not answering the first one because I thought that is more of an aspirational one. If I really have to answer that question, I would rather would like to say that, just reiterate what I mentioned right in my speech, that we are building the bank for future. Whether that future rewards us in terms of market capitalization, creating value, is the market perception about us. Our perception is that we would like to build a bank for four important stakeholders, which I always mention, our employees, customers, shareholders, government, and regulators together, the last piece. I think this is something what we consciously and every day try that how do you improve in terms of satisfying the expectations and aspirations of all four stakeholders. Maybe the outcome and the by-product of that is improved market capitalization.

Speaker #3: The second question, on the credit growth—I'm not answering the first one because I thought that is more of an aspirational one. But if I really have to answer that question, I would rather like to say, just to reiterate what I mentioned right in my speech, that we are building the bank for the future.

Speaker #3: Whether that future rewards us in terms of market capitalization, creating value, is the market perception about us. But our perception is that we would like to build a bank for four important stakeholders, which I always mention: our employees, customers, shareholders, government, and regulators.

Speaker #3: Together, the last piece. I think this is something that we consciously and every day try—that is, you know, how do you improve in terms of satisfying the expectations and aspirations of all four stakeholders.

Speaker #3: So maybe the outcome and the byproduct of that is improved market capitalization. We would be happy to realize that. As far as your credit growth question is concerned, I think 18% credit growth has to be seen from the base effect.

C. S. Setty: We would be happy to realize that. As far as your credit growth question is concerned, I think 18% credit growth has to be seen from the base effect. I think Q1 of the previous year has been a muted quarter. This is not only for SBI. The whole banking system had a muted credit growth in Q1 of previous year. That's the reason we have given the guidance, which is anchored on the nominal GDP expectations of the bank. We believe that maybe the nominal GDP would be around 12% to 12.5%, and SBI always grown 2% to 3% more than that. That's the reason we have given the credit growth guidance of 14% to 15%, which means that 18%, in my view, seems to be a little difficult proposition. Our own internal estimate for the industry is 15% to 16%.

Speaker #3: I think Q1 of the previous year has been a muted quarter. And this is not only for SBI, the whole banking system had a muted credit growth in Q1 of previous year.

Speaker #3: So that's the reason we have given the guidance, which is anchored on the nominal GDP expectations of the bank. We believe that maybe the nominal GDP would be around 12 to 12.5%.

Speaker #3: And SBI always grown 2 to 3% more than that. That's the reason we have I have given the credit growth guidance of 14 to 15%.

Speaker #3: Which means that 18% in in my view, seems to be a little difficult proposition. Our own internal estimate for the industry is 15 to 16%.

Speaker #3: So, if any economic activity actually gets primed more than what we see now, probably we may go to that 16% level. But our broader guidance is on the 14% to 15%.

C. S. Setty: If any economic activity actually gets primed more than what we see now, probably we may go to that 16% level. Our broader guidance is on the 14% to 15%. On the CFO front, yes, I hope this 5-year term, what you have spoken about will stand good. We are happy to welcome Miss Agarwal onto your floor. Thank you.

Speaker #3: And on the CFO front, yes, I hope this five-year term that you have spoken about will stand good. And we are happy to welcome Mr. Agarwal to your fold.

Speaker #3: Thank you.

Speaker #2: Thanks. One more observation—I think you have got two more years to go. What I would like you to aspire to: you did one great QIP.

Manoj Alimchandani: Thanks. One more observation. I think you have got 2 more years to go. What I would like you to aspire, you did one great QIP at a great price. I know Mr. OP, Arundhati and everybody used to mention about fundraising, and you really did it. Before you go, always strike when you In market, cap principle is, when you get a good valuation, go for it. Now, I think the time is yet to come. I think we may go up to 12, 1,500, before you retire, that would be the great time to hit the record and we do the capital adequacy for the next leg of growth. I hope that aspiration will be on your corporate planning team.

Speaker #2: At a great price. I know Mr. OP, but Arundhati and you know, everybody used to mention about fundraising and you really did it. Before you go, always strike when you in market cap principle is when you get a good valuation, go for it.

Speaker #2: Now, I think the time is yet to come. I think we may go up to 12, 1500. But before you retire, that would be the great time to hit the record and we do the capital advocacy for the next leg of growth.

Speaker #2: I hope that aspiration will be on your corporate planning team. Wish you all the best for that.

C. S. Setty: Let's hope.

Manoj Alimchandani: Wish you all the best for that.

Speaker #3: Thank you. But I must also acknowledge, because as I mentioned, we consider this interaction more of an educative one. I remember, I think, two or three quarters later when I took over, many of you mentioned that, you know, please remove the line that the capital may be raised and ratios may be seen to be—and from that angle, you said that either you drop this line or raise the capital.

C. S. Setty: Let's hope. I must also acknowledge because of the, as I mentioned, we consider this interaction more of an educative one. I remember, I think two, three quarters later when I took over, many of you mentioned that, please remove a line that the capital may be raised and the ratios may be seen to be. From that angle, you said that either you drop this line or raise the capital. Thank you for that advice, and we were able to overcome that issue of QIP over.

Speaker #3: So thank you for that advice and we were able to overcome that issue of QIP over us.

Sushil Choksey: Sir, may I? Team SBI, congratulations for excellent performance and good luck for the year. I think you're going to beat everyone on the street. First question is aspiration of India, aspiration of SBI, and growth of India is far dependable in what SBI does in the new emerging businesses which you have formed a vertical, others are lagging behind or they are waiting for data from you. Looking at those aspirational eight, nine divisions, starting from data center, GPU, hydrogen, solar required for all of them. CapEx cycle needs almost INR 30 lakh crores in next four years. Part of it will be funded by global players, part will be India. To meet those requirements, how are we gearing up to meet those industry needs? Because this will be all large giants, I'm not counting Amazon, Microsoft, or those hyperscalers asking for debt from you.

Speaker #2: May I? The team at SBI, congratulations on your excellent performance, and good luck for the year ahead. I think you're going to beat everyone on the street.

Speaker #2: So, first question is: aspiration of India, aspiration of SBI, and growth of India—is that far dependable? And what does SBI do in the new emerging businesses, for which you have formed a vertical? Are others lagging behind, or are they waiting for data from you?

Speaker #2: So looking at those aspirational eight, nine divisions, starting from data center, GPU, hydrogen, solar required for all of them, Capex cycle needs almost 30 lakh crores in next four years.

Speaker #2: Part of it will be funded by global players. Part will be India. To meet those requirements, how are we gearing up to meet those industry needs?

Speaker #2: And because this will be all large giants. I'm not counting Amazon, Microsoft, or those hyperscalers asking for debt from you. But the domestic partners and domestic companies which are emerging, which may not be visible to the street today—they may be less than a billion dollars in capital.

Sushil Choksey: The domestic partners and domestic companies which are emerging, which may be not visible to the street today, they may be less than a billion-dollar capital. I understand you have sanctioned few and you're assessing few. I need a little guidance on that aspect because SBI's future would be far brighter than most of them, because most of the other bankers are doing Ram, Ram.

Speaker #2: But I understand you have sanctioned a few and you're assessing a few. So, I need a little guidance on that aspect because SBI's future would be far brighter than most of them, because most of the other bankers are doing Ram Ram Ram.

Speaker #3: Ashwini, you can take this. I will supplement after Ashwini's response.

C. S. Setty: Ashwini, you can take this. I will supplement after Ashwini responds.

Speaker #4: So you are right. One is this center of excellence which has come up as you pointed out. And it has developing deep expertise in all these sectors.

Ashwini Kumar Tewari: You're right. One is this Centre of Excellence which has come up as you pointed out, it is developing deep expertise in all these sectors. Our teams used to do that already, this is fully focused on this only. These are still early days. They have assessed a few, they have updated the risk models which our teams used to do by having more deeper engagement with the industry players. We are having some pipeline there, even in the merger and acquisition space, which is again a newly opened space for us, we are seeing very good traction for us because everybody is consulting us, we have a lot of opportunity which we see there, including some in this space as well. It's like turning out some new segments, new classes of customers, which we earlier were not able to handle.

Speaker #4: Our teams used to do that already, but this is fully focused on this only. So, these are still early days. They have assessed a few and they have updated the risk models, which our teams used to do, by having deeper engagement with the industry players.

Speaker #4: So we are we are having some pipeline there, but even in the merger and acquisition space, which is again a newly opened space for us, we are seeing very, very good traction for us.

Speaker #4: Because everybody is consulting us, and we have a lot of opportunity which we see there, including some in this space as well. So it's leading to the development of some new segments and new classes of customers, which earlier we were not able to handle.

Speaker #4: For example, software never borrowed from us, but now they are under this debt. They want to acquire companies, they are they are borrowing from us as well.

Ashwini Kumar Tewari: For example, software never borrowed from us, now they are under this, they want to acquire companies, they are borrowing from us as well. I think there's much opportunity which is available, yes, we will set those benchmarks, everybody else is welcome. We will share the knowledge as it stands.

Speaker #4: So I think there's much, much opportunity which is available. And yes, we will set those benchmarks and everybody else is welcome. We we we will share the knowledge as it stands.

Speaker #2: So does it mean.

Speaker #3: One of the constraints, as you pointed out, would be: how do we fund this requirement? Where is the capital pool coming from?

C. S. Setty: One of the constraints, as you pointed out, would be that how do we fund this requirement? Where is the capital pool coming from? I think this brings me to my favorite narrative that the shift in the household savings which has happened, this kind of growth of INR 30 lakh crore cannot be funded by the banks alone. One is, of course, how many banks really will be getting into funding this capital expenditure. The other thing is that capability of the banks to fund this capital expenditure. The overall structure of funding has to change. As I mentioned earlier, if the household savings are going to pension funds, mutual funds, and insurance companies, they all have to contribute to this capital expenditure in some form or the other. What are those structures which will emerge?

Speaker #3: I think this brings me to my favorite narrative—the shift in household savings which has happened, and this kind of growth of ₹30 lakh crore cannot be funded by the banks alone.

Speaker #3: One is, of course, how many banks really will be getting into funding this capital expenditure. The other thing is the capability of the banks to fund this capital expenditure.

Speaker #3: So the overall structure of funding has to change. As I mentioned earlier, if the household savings are going to pension funds, mutual funds, invest insurance companies, they all have to contribute to this capital expenditure in some form or the other.

Speaker #3: So, what are those structures which will emerge? Number two, many of us have a kind of illiquid asset portfolio on our books. Take home loans, for instance.

C. S. Setty: Number two, many of us have a kind of illiquid asset portfolio in our books. Take home loans, for instance. I did mention earlier also, again, I'm reiterating, the overall system has got INR 30 lakh crore or even more home loans.

Speaker #3: I did mention earlier also again, I'm reiterating, the overall system has got 30 lakh crore or even more home loans. 34 lakh crore home loan portfolio, which is absolutely illiquid.

Sushil Choksey: 34.

C. S. Setty: INR 34 lakh crore home loan portfolio, which is absolutely illiquid. Whether we can bring securitization structures. If securitization structures come, unless this non-bank participation is there, this is not going to really work. I think we are consciously working as a market leader to bring those structures and help this funding capability in the system to grow.

Speaker #3: So, whether we can bring in securitization structures. But if securitization structures come, unless this non-bank participation is there, this is not going to really work.

Speaker #3: So I think we are consciously working as a market leader to bring those structures and help this funding capability in the system to grow.

Speaker #2: So you rightly answered my next question, but if you're considering hydrogen, solar connectivity, now reads and invite funding, domestic M&A plus global M&A, and ₹8.2 lakh crore of mutual fund size today as of June, keeping a combination and CD ratio at 82 percent today, the bank's capital requirement at SBI may be met.

Sushil Choksey: Sir, you rightly answered my next question. If you're considering hydrogen, solar, connectivity, now REITs and InvIT funding, domestic M&A plus global M&A, and INR 82 lakh crore of mutual fund size today as of June. Keeping a combination and CD ratio at 82% today, the bank's capital requirement at SBI may be met. There may be opportunity for SBI Caps and yourself to underwrite and downsell to many banks, because they are depending if SBI writes, I'll write the proposal. Keeping all those aspects in mind, I see a far better prospects for SBI in next four, five years, specifically for these sectors, compared to what others are thinking right now. There may be overhanging one other sword on other bankers of merger and acquisitions between themselves. Maybe SBI lines up with one or two.

Speaker #2: There may be opportunity for SBI caps and yourself to underwrite and downsell to many banks because they are depending if SBI writes, I'll write the proposal.

Speaker #2: So, keeping all those aspects in mind, I see far better prospects for SBI in the next four to five years, specifically for these sectors, compared to what others are thinking right now.

Speaker #2: And there may be overhanging one other sword on other bankers of merger and acquisitions. Between themselves, maybe SBI lines up with one or two.

Speaker #2: So what happens to the nation and what happens to SBI, that's why I'm asking this.

Sushil Choksey: What happens to the nation and what happens to SBI, that's why I'm asking this.

Speaker #3: No, in some manner, you are right. I think there's a greater opportunity emerging. What is required, apart from the capital which we have spoken about, is the capability.

C. S. Setty: No, in some manner you are right. I think there's a greater opportunity emerging. What is required apart from the capital which we have spoken about, is the capability. This is what Mr. Tiwari has mentioned in terms of our Centre of Excellence, CHAKRA initiative, so that at least a dedicated band of people who understand the emerging industries and what are the not only opportunities and the risk associated with funding them. You mentioned that if SBI underwrites, others will participate. SBI itself has to develop that confidence and capability, which we are investing now in our people through this CHAKRA initiative. I believe, I'm sure I agree with you in terms of the emerging opportunity in these areas and how do we position SBI to be the premier bank in that, we consciously are working on it.

Speaker #3: This is what Mr. Tiwari has mentioned in terms of our center of excellence, Chakra initiative, so that at least a dedicated band of people who understand the emerging industries and what are not only the opportunities, but also the risks associated with funding them.

Speaker #3: You mentioned that if SBI underwrites, others will participate. SBI itself has to develop that confidence and capability which we are investing now in our people through this chakra initiative.

Speaker #3: And I believe I'm sure I agree with you in terms of the emerging opportunity in these areas. And how do we position SBI to be the premier bank in that?

Speaker #3: We will consciously are working on it.

Sushil Choksey: The main contributor is that we have given a tax holiday till 2047 along with Malaysia-

Speaker #2: The main contributor is that we have given a tax holiday till 2047 along with Malaysia.

C. S. Setty: The data centers.

Speaker #3: And the data centers.

Sushil Choksey: Yeah, data centers. Thank you, thank you for answering, and good luck for the year, sir.

Speaker #2: Yeah, data centers. Thank you. And thank you for answering and good luck for the years.

Speaker #3: Thank you. Yeah.

C. S. Setty: Thank you.

[Analyst] (Citi): Good evening, sir. Kunal from Citi. Couple of questions. Firstly, on the overall loan book, if we look at it compared to the other banks, we have seen almost like a flat growth on the corporate side, and growth has primarily come from SME retail and agri on a sequential basis. One is maybe, did we actually transition to this MCLR pricing, which you were indicating last time from T-bill to MCLR, and that would have taken the rates up and we have seen some rundown or competition out there. Was that the reason or maybe we will see the uptick on the corporate side going forward because overall at the industry level, still corporate growth is quite strong. Now it has outpaced the overall system growth. That's the question.

Speaker #5: Good evening, sir. Kunal from Setty. So yeah. So a couple of questions. Firstly, on the overall loan book, so if we look at it compared to the other banks, we have seen almost like a flat growth on the corporate side.

Speaker #5: And growth has primarily come from SME, retail, and agri on a sequential basis. So, one is: maybe did we actually transition to this MCLR pricing, which you were indicating last time—from TBIL to MCLR—and that would have taken the rates up? And have we seen some rundown or competition out there?

Speaker #5: Was that the reason or maybe we will see the uptake on the corporate side going forward because overall at the industry level still corporate growth is quite strong.

Speaker #5: Now it has outpaced the overall system growth, so that's the question. And secondly, within the loan book, when you look at it, even express credit—maybe the sequential traction is not strong.

[Analyst] (Citi): Secondly, within the loan book, when you look at it, even Xpress Credit, maybe the sequential traction is not strong. It's still like 8 odd %. Anything to read into it, we were expecting to take it into double digit over a period. How is the traction out there on the PL side? Secondly, getting onto margins. In terms of the entire MCLR transitioning on the corporate, is it largely done during the quarter? And is that reflected in the yield improvement, which is there? And bulk deposits, if you can just give the proportion, what is the proportion of the bulk deposits today and how, maybe as of June and how much it was last quarter? And any interest on IT refund if it was there within the margins during the quarter.

Speaker #5: It's still like eight odd percent. So anything to read into it? We were expecting to take it into double digit over a period. So how is the traction out there on the PL side?

Speaker #5: Then secondly, getting on to margins—so, in terms of the entire MCLR transitioning on the corporate side, is it largely done during the quarter? And is that reflected in the yield improvement which is there?

Speaker #5: And bulk deposits, if you can just give the proportion, what is the proportion of the bulk deposits today and how maybe as of June and how much it was last quarter?

Speaker #5: And any interest on IT refund if it was there within the margins during the quarter?

Speaker #3: So on the corporate side, we did mention that there have been a significant growth on the TBIL link pricing. So what we see on the corporate side is a combination of moving a part of that portfolio to MCLR and obviously in the process somebody who is not willing to pay MCLR, I've looked for alternatives.

C. S. Setty: On the corporate side, we did mention that there have been a significant growth on the T-bill link pricing. What we see on the corporate side is a combination of moving a part of that portfolio to MCLR. Obviously in the process, somebody who is not willing to pay MCLR have looked for alternatives. Largely, the T-bill pricing itself is renegotiated in many cases, improving the yield. This still is a work in progress. It's not full transition has not happened. There is a general awareness both in our teams as well as among the customers that what is our pricing expectation. What the growth probably would be based on these expectations only. There have been some instances where obviously people have moved.

Speaker #3: But largely, the TBIL pricing itself is renegotiated in many cases, improving the yield. It is still a work in progress; a full transition has not happened yet.

Speaker #3: But there is a general awareness both in our teams as well as among the customers that what is our pricing expectation? So what the growth probably would be based on these expectations only.

Speaker #3: There have been some instances where, obviously, people have moved. So, sequentially, our growth rate has been lower, but we used to have a strong dip sequentially every year.

C. S. Setty: Which you see sequentially our growth rate has been lower, we used to have a strong dip sequentially every year. That dip is much less than what it used to be earlier. I think it should be seen from that angle. We have very fairly large book. Our base, 30%, 33% of our book is corporate book. I don't think anybody in the system has such a large book. Even if they grow, the percentage terms it looks bigger. We have good visibility. I would ask Ashwini to respond further on the corporate book. Coming to your Xpress Credit, we are seeing a good amount of sourcing and good amount of disbursements in the current quarter and also the quarter which we just finished.

Speaker #3: And that dip is much less than what it used to be earlier. So I think it should be seen from that angle. Maybe others are growing a bit, but we have a fairly large book.

Speaker #3: Our base—30 percent, 33 percent of our book—is corporate book. I don't think anybody in the system has such a large book. Even if they grow, in percentage terms it looks bigger, but we have good visibility.

Speaker #3: I would ask Ashwini to respond further on the corporate book. But coming to your express credit, we are seeing a good amount of sourcing and good amount of disbursements in the current quarter and also the part of which we just finished.

Speaker #3: But it is not going into the double-digit territory because of the gold loans. We have seen that many of our normal express credit customers are opting to take gold loans.

C. S. Setty: It is not going into the double-digit territory because of the gold loans. We have seen that many of the normal Xpress Credit customers are opting to take gold loan. Obviously, there's an interest rate arbitrage, almost 3%. Somewhere this gold loan juggernaut will slow down, some movement will happen to Xpress Credit. We have an opportunistic growth in terms of gold loan. We are doing it in a full basis, both on the personal gold loan and agricultural gold loan. No worries on that. MCL transition, as I mentioned, is a work in progress. We don't disclose on the bulk deposits proportion.

Speaker #3: Obviously, there's an interest rate arbitrage—almost 3%. So, as you know, somewhere these gold loan juggernauts will slow down and some movement will happen to express credit, but we have opportunistic growth in terms of gold loans.

Speaker #3: And we are doing it on a full basis, both on personal gold loans and agricultural gold loans, so no worries on that. MCL transition, as I mentioned, is a work in progress.

Speaker #3: We don't disclose the proportion of bulk deposits. So I think we'll stick to that, because this number is a treasury activity and every time you guys get worked up—you know, bulk deposits going up, bulk deposits going down—and your financing models and your Excel sheets all will go for a toss.

C. S. Setty: I think we'll stick to that because this number is a treasury activity, every time you guys get worked up, bulk deposit going up, bulk deposit going down, your financing models and your Excel sheets all will go for a toss. I would rather stick to that.

Speaker #3: So I would rather stick to that.

[Analyst] (Citi): Cost of deposits has improved.

Speaker #2: Some deposits has improved.

C. S. Setty: I will not go into the bulk deposit thing. One thing I would definitely say that the proportion is significantly coming down, and broadly will be helped by the FCNR flows. If we have INR 1 lakh crore flows of FCNR, which we expect to have, I think to that extent, predominantly, it will be reducing our bulk proportion.

Speaker #3: I will not go into the bulk deposit thing, but one thing I would definitely say is that the proportion is significantly coming down. And broadly, we will be helped by the FCNR(B) flows.

Speaker #3: If we have one lakh crore flows of MCNRB, which we expect to have, I think to that extent, predominantly, it will be reducing our bulk proportion.

Speaker #5: Entirely, because there would be some leverage also. So in terms of this one lakh crore, we heard that you mentioned $10 billion of FCNR.

[Analyst] (Citi): Entirely because there would be some leverage also. In terms of this INR 1 lakh crore, we heard that you mentioned INR 10 billion of FCNR. What do you expect the leverage from our own balance sheet, which will be there on the credit-

Speaker #5: What do you expect the leverage from our own balance sheet will be there?

C. S. Setty: It is currently fully on our balance sheet.

Speaker #3: This currently is fully on our balance sheet.

Speaker #5: Entire?

[Analyst] (Citi): Entire?

Speaker #3: Entirely on our balance sheet. Leverage is now overseas offset.

C. S. Setty: Entirely on our balance sheet, leverage now. Overseas office.

Speaker #5: So what is the quantum? So, like $6 billion also, which we raised till date, it's like entirely.

[Analyst] (Citi): What is the quantum? Like $six billion also, which we raised till date, it's like entirely.

C. S. Setty: We don't want to comment on the yields and the leverage which we are providing. I can tell you that it is all leverage mostly is provided by our own foreign offices.

Speaker #3: I don't want to—we don't want to—comment on the yields and the leverage which we are providing. I can tell you that all the leverage, mostly, is provided by our own foreign offices.

Speaker #5: Got it. And.

[Analyst] (Citi): Got it.

Speaker #3: Do you want to add anything on the corporate side?

C. S. Setty: You want to add anything on the corporate side?

Speaker #5: Interest on IT refund? IT refund?

[Analyst] (Citi): Interest on IT refund.

C. S. Setty: Interest on?

[Analyst] (Citi): IT refund.

Speaker #3: Very small. Isn't it? I think this quarter we don't have any.

Ashwini Kumar Tewari: Very small.

C. S. Setty: I think this quarter we don't have any.

Speaker #5: No interest at all.

[Analyst] (Citi): No interest at all.

Ashwini Kumar Tewari: Interest on IT refund, sir.

C. S. Setty: Huh?

Speaker #3: Thanks. 220.

[Analyst] (Citi): Thanks.

Ashwini Kumar Tewari: INR 220 crores.

C. S. Setty: INR 220 crores?

Ashwini Kumar Tewari: INR 220 crores is-

Speaker #4: 220 crores is what we have.

C. S. Setty: Okay

Ashwini Kumar Tewari: what we have.

Speaker #5: Compared to 1000 crores last quarter.

[Analyst] (Citi): Compared to INR 1,000 crores last Q.

C. S. Setty: last year, Q1, we did not have any, but Q4 we had INR 1,100 crores.

Speaker #4: So last year first quarter we did not have any but quarter four we had 1001 crores.

Speaker #5: Yeah. Okay. Thanks. Yeah.

[Analyst] (Citi): Okay. Thanks. Yeah.

Speaker #3: Yeah. Do you want to add something on the corporate side?

C. S. Setty: You want to add something on the corporate side?

Speaker #2: No, nothing much. The pipeline is very strong. Overall, if you include the term loan undisbursed, the working capital not utilized and pipeline exceeds nine lakh crores.

Ashwini Kumar Tewari: No, nothing much. The pipeline is very strong. Overall, if you include the term loan undisbursed, the working capital not utilized, and pipeline exceeds INR 9 lakh crores. There's a strong pipeline for corporate credit. As I explained, the M&A is a very good opportunity we are seeing very strong interest.

Speaker #2: So the strong pipeline for corporate credit. And as I explained, the amenda is a very good opportunity we are seeing. Very strong interest.

Speaker #5: Thanks. Thanks and all the best.

[Analyst] (Citi): Thanks. Thanks and all the best.

Speaker #1: Sir, hi. Sir, a couple of questions here. Sir, first on FCNRB, so there are two legs, right? First, it will reduce the bulk deposit.

[Analyst]: Sir, hi. Sir, a couple of questions here. Sir, first on FCNR. There are two legs, right? First, it will reduce the bulk deposit, so it should be helping in overall cost of deposit or cost of fund. The overseas book that also sees an increase by the equivalent leverage amount. There, the spread should be very minimal, right? What is the net impact of FCNR on the margins? Would it be margin dilutive or would it still be margin positive for the bank?

Speaker #1: So it should be helping in overall cost of deposit or cost of fund. But the overseas book that also sees an increase by the equivalent leverage amount, there the spread should be very minimal, right?

Speaker #1: So what is the net impact of FCNRB on the margins? Would it be margin dilutive or would still be margin positive for the bank?

Speaker #2: I will respond on the domestic side, and Ashutosh will respond on the overseas side. For domestic, I don't see any significant negative or positive impact.

C. S. Setty: I will respond on the domestic side and for overseas, Ashutosh will respond. Domestic, I don't see any significant negative or positive impact because as I mentioned to Kunal, that we don't have a significant proportion of bulk. Even if it is INR 1 lakh crore on a INR 60 lakh crore deposit base, it's not really going to move the needle. Okay. On the overseas side, Ashutosh, you can respond.

Speaker #2: As I mentioned to Kunal, we don't have a significant proportion of bulk. So even if it is ₹1 lakh crore on a ₹60 lakh crore deposit base, it's not really going to move the needle.

Speaker #2: Okay. On the overseas side—Ashutosh, you can respond. So, on the overseas side, we don't see any major impact on our overseas book because we have a large trade finance book there.

Rana Ashutosh Kumar Singh: Thank you, sir. Overseas side, we don't see any major NIM impact on our overseas book because we have a large trade finance book there where NIM is, you know that what is the NIM in a trade finance. One third of the book was trade finance. We'll have some maybe remix in the portfolio of the foreign offices. Net net, there'll not be NIM impact on the overseas offices.

Speaker #2: We are you know that what is the name is in a trade finance. One third of the book was trade finance. So we'll have some maybe remix in the portfolio of the foreign offices.

Speaker #2: But net net, there'll not be any impact on the overseas offices.

Speaker #1: So what the foreign officers are doing is that, you know, they if they are funding FCNRB by providing leverage, they are reducing on trade finance.

C. S. Setty: What the foreign offices are doing is that, if they are funding FCNR by providing leverage, they are reducing on trade finance. The margins are equivalent. Sometimes margin on supply chain is much lower than what they're getting on the FCNR. Overall, I don't think there is any impact either on the whole bank NIM or domestic NIM.

Speaker #1: The margins are equivalent. Sometimes, the margin on supply chain is much lower than what they are getting on the FCNRB. So overall, I don't think there is any impact either on the whole bank name or the domestic name.

Speaker #2: Sure. Secondly is around gold loan. So what is your outstanding gold loan on agri side and what is the yield that you charge on gold loan both on retail and agri?

[Analyst]: Sure. Secondly, sir, on gold loan, what is your outstanding gold loan on agri side, and what is the yield that you charge on gold loan, both on retail and agri?

Speaker #1: Well, so our personal gold loans, just one second.

C. S. Setty: Ram.

Ashwini Kumar Tewari: Our personal gold loans, just one second.

Speaker #2: Personal gold loans?

C. S. Setty: Personal gold loan.

Ashwini Kumar Tewari: Is of the order of INR 1.25 trillion.

Speaker #1: Ease of charter of 1.25 trillion. And the agri gold loans ease of charter of 1.85 trillion. So both put together, we crossed 3.1 trillion as on.

C. S. Setty: Yeah.

Ashwini Kumar Tewari: Agri gold loans is of the order of INR 1.85 trillion. Both put together, we crossed INR 3.1 trillion as on June.

Speaker #2: And the yields, sir?

[Analyst]: The yield, sir?

Speaker #1: Typically, they are in the range of 8.5 to 8.9 percent.

Ashwini Kumar Tewari: Typically, they are in the range of 8.5% to 8.9%.

Speaker #2: Now, sir.

[Analyst]: Now, sir,

Speaker #1: And the personal gold loan is slightly higher, and agri probably is lower.

C. S. Setty: The personal gold loan is slightly higher.

[Analyst]: Right.

C. S. Setty: Agri probably is lower.

Speaker #2: Sir, actually, this is an observation. You are growing retail gold loan at 100 percent almost, right? And this is one product where there is no competition from private banks, large private.

[Analyst]: Sir, actually, this is an observation. You are growing retail gold loan at 100% almost, right? This is one product where there's no competition from private banks, large private. There are small players, regional players, which are reasonably active, and their yields are 10% to 11%, if not higher. This is the only product where you're growing at 100% almost. Industry is also growing at 100, and the entire growth is contributed by PSU banks. Right? There's no competition. The yields that you are charging is actually much, much lower than comparable private peers. Is there a scope to increase the yield here or you think this will remain like this?

Speaker #2: There are small players regional players which are reasonably active. And their yields are 10 to 11 percent if not higher. This is the only product where you're growing at 100 percent almost.

Speaker #2: Industry is also growing at 100 and the entire growth is contributed by PSU banks, right? And there is no competition. And the yields that you are charging is actually much, much lower than comparable private peers.

Speaker #2: Is there a scope to increase the yield here or you think this is, you know, this will remain like this?

Speaker #1: No, we will definitely be looking at, you know, I think we have enhanced the yield on gold loan over the period. But you also must understand what is the ticket size of this gold loan?

C. S. Setty: We will definitely be looking at I think we have enhanced the yield on gold loan over the period. You also must understand what is the ticket size of this gold loan. If lower the ticket size, you have a better option of pricing it better. People are willing to pay in a lower ticket size. We don't want to get into that lower ticket size. Our average ticket size is almost INR 2.5 lakh to INR 3 lakh or even more.

Speaker #1: If lower the ticket size, you have a better option of pricing it better. People are willing to pay in a lower ticket size. But we don't want to get into that lower ticket size.

Speaker #1: Our average ticket size is almost 2.5 lakh to 3 lakh rupees or even more.

Speaker #2: Yes, sir. 2.5 lakh.

[Analyst]: Yes, sir, 2.5.

Speaker #1: 2.5 lakh. And our loan to value is less than 55, 56 percent. So with this matrix, generally the people who come to us are basically coming for the price.

C. S. Setty: Our loan to value is less than 55% to 56%. With this matrix, generally the people who come to us are basically coming for the price. There's not much. We will never be moving to double digit territory there. I also believe that this gold loan growth need to be seen from an opportunistic point of view. This is not our core portfolio. Today, the growth opportunity is there and there's no capital allocation. There's virtually risk weight is zero. From that angle, is ROE accretive? Well, small compromise on the margins, and it is a safe portfolio.

Speaker #1: So there’s not much. We will never be moving to double-digit territory there. And I also believe that this gold loan growth needs to be seen from an opportunistic point of view.

Speaker #1: This is not our core portfolio. So today the growth opportunity is there and there's no capital allocation. There's virtually risk weight is zero. So from that angle is ROE attractive while small compromise on the margins.

Speaker #1: And it's a safe portfolio.

Speaker #2: Sir, and lastly on personal loan side, right? So RBA data suggests that banking industry is growing at around 10, 11 percent personal loan. Same is the case with SBI and let's say large private.

[Analyst]: Sir, lastly, on personal loan side, RBI data suggests that banking industry is growing at around 10% to 11% personal loan. Same is the case with SBI and let's say large private. If I look at other lenders, NBFCs, they are growing at 20% to 25% on the personal loan side. Maybe they are targeting self-employed sector, self-employed segment-

Speaker #2: But if I look at other lenders, right, NBFCs, they are growing at 20, 25 percent on the personal loan side. Maybe they are targeting self-employed sector, self-employed segment.

C. S. Setty: Yeah

Speaker #2: And it looks like banks are shying away from that segment.

[Analyst]: It looks like banks are shying away from that segment.

C. S. Setty: One of the reasons, I don't know whether I mentioned with you, is that the deeper penetration of a product is not there. For example, you take our Xpress Credit. 99% of the borrowers are salaried customers. If you want to go to a self-employed and professional category, even if they're good quality customers, you need to have a strong collection mechanism. I think the differentiator between mainstream banks and NBFCs is the collection mechanism. We also realized that we need to increase the depth of each of our product, whether it is home loan or personal loan or many other products. Even MSME, for instance, that collection-intensive segments are not tapped by us despite having our pricing power reach. We have, for the first time, embarked on creating a full-fledged collection vertical. Is our cesium collection is there here?

Speaker #1: So one of the reasons, I don't know whether I mentioned with you, is that the deeper penetration of a product is not there. For example, you take our express credit.

Speaker #1: 99 percent of the borrowers are salaried customers. And if you want to go to a self-employed and professional category, even if they are good quality customers, you need to have a strong collection mechanism.

Speaker #1: I think the differentiator between mainstream banks and NBFCs is the collection mechanism. So, we also realized that we need to increase the depth of each of our products, whether it is home loan, our personal loan, or many other products—even MSME, for instance. The collection-intensive segments are not tapped by us, despite having our pricing power and reach.

Speaker #1: So, we have for the first time embarked on creating a full-fledged collection vertical. Our CGM collection is there. Here is—yeah—so, Hemanth is our head of the collection vertical.

C. S. Setty: Hemant is our head of collection vertical. He will be driving the full-scale collection mechanism to be built. We are building from scratch. Because virtually, in a bank like SBI and Xpress Credit, let me tell you, 75% to 76% of the recoveries happen by way of moving funds from savings bank account to loan account. That is not collection. Correct? You need to have a very strong collection mechanism to take these products to self-employed and professionals, where our yield improvement will happen. Before we get into that segment, we want to ensure that our collection mechanism is strong, robust, and our field staff is available to us. We are creating feet on street across the country. Almost 6,000 is our estimated number, which we'll be deploying in feet on street through our SBOTS, that is our subsidiary.

Speaker #1: He will be driving the full scale collection mechanism to be built we are building from scratch because virtually in a bank like SBI and express credit let me tell you 75 to 76 percent of the recoveries happen by way of moving funds from savings bank account to loan account.

Speaker #1: That is not collection, correct. So you need to have a very strong collection mechanism to take these products to self-employed and professionals, where our yield improvement will happen. But before we get into that segment, we want to ensure that our collection mechanism is strong, robust, and field staff is available to us.

Speaker #1: We are creating feet on street across the country almost 6,000 is our estimated number which we will be deploying in feet on street through our SBOS that is our subsidiary.

Speaker #1: And we are extensively using our analytical and AI capabilities to develop the models and combine feet-on-street, branch network, and contact center to create an ecosystem of collection.

C. S. Setty: We are extensively using our analytical and AI capabilities to develop the models and combine feet on street, branch network, and contact center to create a ecosystem of collection. That would help me to go into the product range, what you are looking for. While we have the product, we have to deepen that.

Speaker #1: And that would help me to go into the product range that you are looking for. While we have the product, we have to deepen them.

Speaker #2: So is there a one year target or it could take longer?

[Analyst]: Is that a 1 year target, or it could take more-?

C. S. Setty: This is 1 year. All other elements are in place except that we need to get feet on street, because they're qualified people. We don't want to have any reputational risk. We have to train them well. We have to bring that DNA of SBI in their activities.

Speaker #1: One year. All other elements are in place except that, you know, we need to get feet on street because they're qualified people. We don't want to have any reputational risk.

Speaker #1: We have to train them well. We have to bring the DNA of SBI in their activities.

Speaker #2: Right. And lastly, sir, if you can answer the pension provisions I mean on a full year basis are we passing that hump wherein you know the pension provision should start declining irrespective of interest rate cycle depending on the employees who are on the you know defined contribution defined benefit proportion?

[Analyst]: Right. Lastly, sir, if you can answer the pension provisions, on a full year basis, are we passing that hump wherein the pension provision should start declining irrespective of interest cycle, depending on the employees who are on the defined contribution, defined benefit proportion?

Speaker #1: It is happening. I think the pension is a combination of the contribution we are making and the regular contribution which we are required to make.

C. S. Setty: It is happening. I think the pension is a combination of what contribution we are making to the regular contribution, which we are required to make. That seems to be on a declining trend. The real impact will be post 2035. 2010 is where NPAs is introduced. Till that time, it will be an incremental decrease, but I think significant decrease will come post 2035, I think. Right? We also are getting benefit of actuarial assessments and many other things. I think that is reducing the pension. You want to add anything on India on this?

Speaker #1: That seems to be on a declining trend. But the real impact will be post-2035, because 2010 is when NPS was introduced.

Speaker #1: So till that time it will be an incremental decrease but I think significant decrease will come post 2035 I think. Right. But we also are getting benefit of actuarial assessments and many other things I think that is reducing the pension you want to add anything on India on this?

Speaker #2: Sir, the pension MTM gains on pension and gratuity fund if I compare this quarter was 935 crores quarter one was 1,125 crores. So the whole every quarter the actuary you know comes and revalues it and depending upon the yields and all it is made.

[Analyst]: Sir, the pension, MTM gains on pension and gratuity fund, if I compare this quarter was INR 935 crores. Q1 was INR 1,125 crores.

AS Paul: Every quarter they actually comes and reevaluates it, and depending upon the yields and all, it is made.

Speaker #1: Yeah. In terms of cost I think significant reduction you will see in a couple of maybe three, four years later.

C. S. Setty: Yeah, in terms of cost, I think significant reduction you will see in a couple of, maybe three, four years later.

Speaker #3: Hi, sir. Param here from Invest Tech. So first question firstly congrats on the quarter. So first question on the ECL a number of your public sector peers have given out numbers on broad impact on a run rate credit cost as well as the one time net worth hit so if you can call out something if we've done an assessment on that.

[Analyst] (Investec): Hi, sir. Param here from Investec. Firstly, congrats on the quarter. First question on the ECL. A number of your public sector peers have given out numbers on broad impact on a run rate credit cost as well as the one-time net worth hit. If you can call out something, if we've done an assessment on that.

Speaker #1: If you're looking at a number I'm not giving any number at this moment but two reasons. One is of course I did promise that in Q1 results we would be able to give some number.

C. S. Setty: If you're looking at a number, I'm not giving any number at this moment. For two reasons. One is, of course, I did promise that in Q1 results we would be able to give some number. It took longer than what we expected in terms of pushing the whole data into our IT systems. My team tells me that 18 August, probably they would be pushing all the models and data into the IT system. The correct way of doing it is that probably when we meet again in Q2, we'll give you the numbers. One assurance I can give you, it will not have any major impact for two reasons. One is, we will have some capital augmentation because of the mutual fund and hopefully on the other major divestment which we are planning.

Speaker #1: It took longer than what we expected in terms of pushing the whole data into our IT systems. My team tells me that 18th August probably they would be pushing all the models and data into the IT system.

Speaker #1: The correct way of doing it is what probably when we meet again in Q2 will give you the numbers. But one assurance I can give you it will not have any major impact for two reasons.

Speaker #1: One is we will have some capital augmentation because of the mutual fund and hopefully on the other divestment major divestment which we are planning.

Speaker #1: And we also intend to take the regulatory dispensation of transitioning which means that you know annual impact would be less on the CRAR.

C. S. Setty: We also intend to take the regulatory dispensation of transitioning, which means that annual impact would be less on the CRAR.

Speaker #3: Okay. Sir, on the run rate credit cost right so I mean there will be a bump up most banks are talking about it. I want to ask you sir conceptually since you know you are the lender who sets the prices in the market will this be passed on to the customer say if it's 10 basis points 12 basis points will this be passed on to the consumer because logically I mean most of your loans are EBLR plus risk and if the cost of risk is going up because of ECL will that be passed through in a lending rate as well?

[Analyst] (Investec): Okay. Sir, on the run rate credit cost. There will be a bump up. Most banks are talking about it. I want to ask you, sir, conceptually since you are the lender who sets the prices in the market, will this be passed on to the customer? Say if it's 10 basis points, 12 basis points, will this be passed on to the consumer? Logically, most of your loans are EBLR plus risk, and if the cost of risk is going up because of ECL, will that be passed through in a lending rate as well?

Speaker #1: So at this juncture is hypothetical because first of all we don't know what could be the run rate on because much of the stock will be absorbed right on the first of April 27 and all of us are looking at strengthening our collection mechanisms again I'm forgot to mention that is ECL is also one of the compulsions what we need to strengthen our collections our role forwards from any of this SMAs is very limited into NPS stage one and two hardly become stage three for us but we still have floor rates to handle on SMA one and two which probably would have some run rate impact we don't currently investors very major impact which forces us to pass on as a cost to the customers we should be able to absorb those costs unless there is a credit cycle moment if credit cycle moves adversely and those costs go beyond certain level it may happen but I think I don't foresee in the first year I think everyone will be fine tuning their models watching how to improve the position instead of looking to immediately pass on the cost.

C. S. Setty: At this juncture, it is hypothetical because, first of all, we don't know what could be the run rate on. Much of the stock will be absorbed on 1 April 2027. All of us are looking at strengthening our collection mechanisms. Again, I forgot to mention that ECL is also one of the compulsions what we need to strengthen our collections. Our roll forwards from any of these SMAs is very limited into NPAs. Stage 1 and 2 hardly become Stage 3 for us. We still have flow rates to handle on SMA 1 and 2, which probably would have some run rate impact. We don't currently envisage very major impact which forces us to pass on as a cost to the customers. We should be able to absorb those costs. Unless there is a credit cycle movement.

C. S. Setty: If credit cycle moves adversely and those costs go beyond certain level, it may happen. I think in the first year, everyone will be fine-tuning their models, watching how to improve the positions instead of looking to immediately pass on the cost.

Speaker #3: So any numbers on say SMA one and two at a bank level regardless of ticket size?

[Analyst] (Investec): Any numbers on, say, SMA 1 and 2 at a bank level, regardless of ticket size?

Speaker #1: At this juncture?

C. S. Setty: At this juncture?

Speaker #3: Yeah.

[Analyst] (Investec): Yeah.

Speaker #1: We have never disclosed those numbers. They're very dynamic.

C. S. Setty: We have never disclosed those numbers.

[Analyst] (Investec): Okay.

C. S. Setty: They're very dynamic.

Speaker #3: Sir, question on the FCNR. You mentioned the number about 10 billion dollars. We've already done more than half of that and we've seen that generally the FCNR flows based on the last episode it's it tends to be back ended.

[Analyst] (Investec): Sir, question on the FCNR. You mentioned a number about $10 billion. We've already done more than half of that. We've seen that generally the FCNR flows based on the last episode, it tends to be back-ended. Why are we talking about a number that is, say, it appears low from where we are? How are we approaching the problem, in the sense that should we be going out to get as much as we can get or are we setting ourselves a target that we want to achieve so much?

Speaker #3: So, why are we, you know, talking about a number that, say, appears low from where we are? Or how are we approaching the problem, in the sense that should we be going out to get as much as we can get, or are we setting ourselves a target that, you know, we want to achieve so much and, you know, we will.

C. S. Setty: No, we don't have any target in mind, honestly. I also don't think that it will be back-ended as much, what we have seen in 2013. Most of the back-ending in 2013 happened because the leverage confusion was there, and most of the public sector bank adopt leverage in the later part. SBI alone, 70% of our deposit was raised in the last period, in last cycle. This time, there's no confusion on leverage. There's no confusion on whether you can give SBLC or not SBLC. Flows seem to be more spread out. Some movement definitely will be there, last mile, some people may come. Our estimate is based on the inquiries, visibility, and customer outreach, what we are doing. We may exceed also, I'm not very sure, but it appears that $10 billion seems to be a reasonable number.

Speaker #1: No we don't have any target in mind honestly but I I also don't think that it will be back ended as much what we have seen in 2013.

Speaker #1: Most of the back ending in 2013 happened because the leverage confusion was there and most of the public sector bank adopted leverage in the later part.

Speaker #1: SBI alone the 70% of our deposit was raised in the last period and last cycle. But this time you know there's no confusion on leverage.

Speaker #1: There's no confusion on whether you can give SBLC or not SBLC. So flows seem to be more spread out. If you if you see some moment definitely will be there last mile some people may come so we our estimate is based on the inquiries visibility and customer outreach what we are doing we may exceed also I'm not very sure but it appears that 10 billion seems to be a reasonable number.

Speaker #3: Right. So one last question. I think this was asked earlier. There was a 1269 crore other provisions in this quarter. Is that a prudential provision that was made in this?

[Analyst] (Investec): Right. Sir, one last question. I think this was asked earlier. There was a INR 1,269 crore other provisions in this quarter.

[Analyst] (Investec): Is that a prudential provision that was made in this?

AS Paul: No, it's a mistake. The 1,269 mostly consists of the PLI provision.

Speaker #2: No it's a mistake. So the 1269 mostly consists of the PLI provisions.

C. S. Setty: See, the PLI provision we back-ended last year, but we decided to spread out 4 quarters this year.

Speaker #1: See the PLI provision we back ended last year but we decided to spread out four quarters this year.

Speaker #3: Okay, thank you so much. Congrats once again.

[Analyst] (Investec): Okay. Thank you so much. Congrats once again.

Speaker #2: Yeah.

C. S. Setty: Yeah.

Speaker #3: Hi sir. So Pritesh from Dam Capital. So two questions. One is on the corporate yield side. Once we see a significant flow of FCNR the liquidity will obviously go up.

[Analyst] (DAM Capital): Hi, sir.

C. S. Setty: Yes.

[Analyst] (DAM Capital): Pritesh from DAM Capital. Sir, two questions. One is on the corporate yield side. Once we see a significant flow of FCNR, the liquidity will obviously go up. How do you see yields after September, especially on the corporate side? You mentioned about bulk deposit as well. Both side of the leg, how do you see that? The second question is, there is one slide which you have mentioned that a lot of incremental loans are being generated through analytical leads from AI. What does that mean in that sense? What is analytical leads? INR 22,000 crore, which is raised in retail, is largely Xpress Credit or any other product?

Speaker #3: How do you see yields after September especially on the corporate side? You mentioned about bulk deposit as well. So both side of the leg how do you see that?

Speaker #3: And the second question is there is one slide which you have mentioned that a lot of incremental loans are being generated through analytical leads from AI.

Speaker #3: What does that mean in that sense? What are analytical leads? And the ₹22,000 crore which is raised in retail—is it largely express credit or any other product?

Speaker #1: All types of loans. See, we use AI models—we've been using them for quite some time. This is not new, and these analytical leads, based on our data analytics across the product segments, are given to our operating people.

C. S. Setty: All types of loans.

[Analyst] (DAM Capital): Sure.

C. S. Setty: We use AI models. We've been using for quite some time. This is not new. These analytical leads, based on our data analytics across the product segments, are given to our operating people. It could be home loan, it could be Xpress Credit. It even may be gold loan. In some of the analytical leads are generated in gold loan also, for the gold loan purpose, and MSME loans. All kinds of spectrum of loans leads are generated and given to the feet on street and branches to convert these leads into business. That aggregated to INR 22,000 crore. On the corporate side, I think the pricing will be more determined not by the liquidity which is available, I think what happens in the market.

Speaker #1: It could be home loan it could be express credit it even gold loan in some of the analytical leads are generated in gold loan also for the gold loan purpose and MSME loans so all kinds of spectrum of loans are leads are generated and given to the feet on street and branches to convert this leads into business.

Speaker #1: That aggregated to ₹22,000 crores. On the corporate side, I think the pricing will be more determined not by the liquidity which is available, but by what happens in the market. Because we've been—I think somebody, one of my DMDs, has mentioned the shift from market to bank and bank to market is kind of very fast now.

C. S. Setty: I think one of my DMDs has mentioned, the shift from market to bank and bank to market is kind of very fast now. Earlier, we used to have a lag. The market prices, market rates in bonds and CPs go up. People used to take long time to come back to banks. They seem to be allocating. The shift is very fast. I believe that the corporate pricing will be more determined by what is the CP rates and NCD rates, which again will be determined by the liquidity in the system. There could be some moderation there. As I mentioned right in the beginning, as far as SBI is concerned, we have conveyed our pricing expectations. I don't think that we will deviate too significantly from that part.

Speaker #1: Earlier we used to have a lag the market prices market rates in bonds and CPs go up people used to take long time to come back to banks but they seem to be allocating you know the shift is very fast so I believe that corporate pricing will be more determined by what is the CP rates and NCD rates which again will be determined by the liquidity in the system there could be some moderation there as I mentioned right in the beginning as far as SBI is concerned we have conveyed our pricing expectations I don't think that we will deviate too significantly from that path.

Speaker #3: Thank you sir. Thank you.

[Analyst] (DAM Capital): Thank you, sir. Thank you.

Speaker #2: Yeah. Hi sir. Am I audible?

[Analyst]: Hi, sir. Am I audible?

Speaker #1: Yeah.

C. S. Setty: Yeah.

Speaker #2: So, just a few questions. Firstly, on this ₹1,269 crore of other provisions—you said it's all for PLI? About ₹750 crore?

[Analyst]: Just few questions. Firstly, on this INR 1,269 crore other provisions, you said it's all for PLI?

C. S. Setty: No, partly.

AS Paul: 750 odd.

Speaker #1: 7 almost 750 to 800 is PLI.

C. S. Setty: 750 to 800 is PLI.

Speaker #2: And you're amortizing it this year? So every quarter we are making that.

[Analyst]: You're amortizing it this year?

C. S. Setty: Yeah.

AS Paul: every quarter we are making that.

Speaker #1: Amotization nahi hai. See expected PLI is around 3000 crores. Instead of taking in the last quarter we are taking you know every quarter one fourth of that.

C. S. Setty: Amortization, no. See, expected PLI is around INR 3,000 crore. Instead of taking in the last quarter, we are taking every quarter, one-fourth of that.

Speaker #2: Understood. So secondly on your current deposit growth current accounts like last quarter it was low but we said that there was a base effect there were flows in 4Q FY25 due to which the YOY growth was low.

[Analyst]: Understood. Sir, secondly, on your current deposit growth, current accounts, like last quarter it was low, we said that there was a base effect. There were flows in Q4 FY2025, due to which the YOY growth was low. This time again, it's been only 4% to 5% YOY. What exactly are the reasons for this, and what are we doing to improve this?

Speaker #2: But this time again it's been only four five percent YOY. So what exactly are the reasons for this and what are we doing to improve this?

Speaker #1: Current account I I think we have performed better than the industry if you really see an absolute numbers we used to have mostly you know sequential declines that will continue the current account overall market is going through difficult time what is interesting what I mentioned last quarter also I've seen in this Q12 is that while the governmental current accounts are virtually drying up we have had 14% growth huh 14% growth in 14% growth in non-governmental deposit this is what is actually is very interesting to note that while we have we've been one of the biggest current account holders for the government balances that is drying up still we are holding on the current account market share because our penetration in the non-governmental is increasing significantly 14% growth rate on the non-governmental so I think we are doing fairly well we can do much better but I think overall current account balances in the system are going to go down and so secondly are forex revenues or forex fee income was just 500 crores is that because of the NOP guidelines so yes it'll normalize now to 1500ish from next quarter right.

C. S. Setty: Current account, I think we have performed better than the industry. If you really see in absolute numbers, we used to have mostly sequential declines. That will continue. The current account overall market is going through a difficult time. What is interesting, what I mentioned last quarter also, I've seen in this Q1 too, is that while the governmental current accounts are virtually drying up, we've had 14% growth?

AS Paul: Yes.

C. S. Setty: Huh?

AS Paul: 14% growth in non-governmental.

C. S. Setty: 14% growth in non-governmental deposit. This is what is actually is very interesting to note, that while we've been one of the biggest current account holders for the government balances, that is drying up. Still, we are holding on the current account market share because our penetration in the non-governmental is increasing significantly. 14% growth rate on the non-governmental. I think we are doing fairly well. We can do much better, but I think overall current account balances in the system are going to go down.

[Analyst]: Sir, secondly, our forex revenues, our forex fee income was just INR 500 crores. Is that because of the NOP guidelines?

C. S. Setty: Yeah. Yes.

[Analyst]: It'll normalize now to INR 1,500-ish from next quarter, right?

Speaker #1: You want to say something, Shamsher?

C. S. Setty: You want to say something, Shamsher?

Shamsher Singh: Yes. I think guidelines have definitely affected us and market is holding us, and we should be moving probably to normal, not normal levels, but we'll be making more profits going forward. The INR 1,000 decrease over the last quarter has been mostly because of those guidelines.

[Analyst]: No. Is it now here to stay at this level, INR 500?

Shamsher Singh: No. Market is picking up bank other revenues are also opening up. We should say the guidelines were also very strict until now. Probably there'll be more revenues coming in.

[Analyst]: Understood. Got it. Sir, just if I may squeeze in one last question. Sir, in one of your interviews, you spoke about listing SBI General Insurance also.

C. S. Setty: Did I?

[Analyst]: Yeah.

C. S. Setty: Okay. Anyway, I did mention two companies which could be potential candidates for listing. One company, anyway, we listed, right? The other company, I've not given any timeline. I'm still sticking that SBI General is the next candidate for listing, no timeline.

Shamsher Singh: Yes.

Pawan Kumar: Due to paucity of time, we'll now take up a few questions coming in through the online webcast, which will be addressed by the chairman, sir.

C. S. Setty: This is a question from Sneha Ganatra. Is FCNR deposit is also covered under insurance? Yes, FCNR deposits are also covered up to INR 5 lakh under DICGC insurance cover. Vishal Gupta, "The bank has revised the FY27 loan growth guidance to 13% to 15% from 12% to 14%, which segments retail, SME, corporate, or agriculture?" By the way, we have revised our corporate to 14 to 15 credit growth. Credit growth remained, as I mentioned, broad-based, and we expect that it continues to be broad-based. Bunty Chawla, "Expected amount of FCNR(B) deposits to be raised and its impact on cost of deposits." I think we fairly answered this question. About INR 1 trillion would be our total deposit mobilization. We don't see any significant impact on the cost of deposits. Nasir Sheikh, "Fresh slipages increased sequentially in Q1.

C. S. Setty: Could you provide more color?" During Q1 FY27, our fresh slipages were INR 7,046 crore, out of which we already pulled back INR 1,400 crore as on date. Segmental numbers are also given, but I'll just read out. Agri INR 2,600, SME INR 2,300, personal segment INR 2,100. Anand Agarwal, "Was there any one-off in non-interest income? What was the amount of dividend from subsidiary this quarter versus Q1 FY26?" There's no such one-off in non-interest income. Dividend income during Q1 was INR 72 crore in Q1 FY26, INR 31 crore in Q1 FY27. Normally, dividends get paid only in Q3 and Q4. Mayur Parkeria, "Impact of FCNR on NIM?" I think we already answered this question.

C. S. Setty: Subramani Ramaswamy, "Don't you all think that the guidance of 14% to 15% being too conservative compared to your past performance so far?" We did explain that due to base impact, our year-on-year growth is more than 18%. Our expected growth guidance is essentially based on the nominal GDP and what we grow over nominal GDP. Subramani Nair, Morgan Stanley, "Request you to help us with the number for the interest on income tax refund." Interest on income tax refund was INR 220 crore. Thank you.

Pawan Kumar: Thank you, Chairman sir. I trust all the questions have been addressed. We'll be happy to respond to other questions in offline mode. Let me end the evening with thanking Chairman sir, MD sir, DMD sir, top management team, senior officials of the circles and various offices connected through webcast, analysts, investors, ladies and gentlemen. We thank you all for taking time out of your schedule and joining us for this event. To round off this meeting, we request you all present here to join us for high tea, which is arranged just outside this hall. Thank you. Thank you so much.

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