Speaker #1: Hello. Halo, halo.
Speaker #1: Hello.
Speaker #2: Good evening, ladies and gentlemen. I'll request everyone to settle down. And to the people who have joined us online, we'll begin shortly. Requesting everyone to settle down, please.
Speaker #2: Good evening, ladies and gentlemen. I hope everyone has settled down and we can begin. Requesting silence, please. Thank you. Once again, a very good evening to everyone present here.
Speaker #2: On behalf of Bank Of India, I extend a very warm welcome to all the esteemed analysts who have joined us today in person, as well as those who have joined us virtually from different cities across India.
Speaker #2: We're very pleased to announce Bank Of India's financial results for Q2 FY27. I would like to introduce the Bank Of India's management, present here for today's analyst meet, Sri Rajneesh Karnatak MD and CEO, Sri Pia Rajgopal Executive Director, Sri Subruth Kumar Executive Director, Sri Rajiv Mishra Executive Director, and Sri Pramod Vibedi Executive Director.
Speaker #2: We'll now begin with this analyst briefing. To start, I would like to invite Sri Rajneesh Karnatak to address this August gathering. After which, we will open the floor for Q&A session.
Speaker #2: Over to you, sir.
Speaker #3: Thank you, madam. Thank you so much. So, good evening, friends. Good evening, ladies and gentlemen. It is a pleasure to have you with us today in the analyst meet.
Speaker #3: After the announcement of our Q2 FY27 financial results, thank you for your continued interest and engagement with Bank Of India. I look forward to sharing our quarterly performance and engaging with you in our progress and priorities.
Speaker #3: As we look ahead, for the second half of FY27, the global environment remains challenging, with geopolitical conflicts elevated crude oil prices and tighter financial conditions keeping inflationary pressures alive and prompting several central banks to raise interest rates.
Speaker #3: Against this backdrop, India has demonstrated resilience, with Q2 GDP growth reflecting the strength of the domestic demand and the economy's firm underlying fundamentals. At the same time, rising inflation has prompted the RBI to raise the repo rate by 25 basis points, balancing price stability with the need to sustain the growth.
Speaker #3: For banks, the opportunity now lies in translating this stability into stronger business growth. My remarks today are divided into three parts: one is the institutional initiatives, second is with respect to the business, and third is with respect to the asset quality and the profitability.
Speaker #3: As far as the institutional initiatives are concerned, the first initiative during the quarter that we have taken is, under the predict monitor supervised framework, we have developed the star radar predictive model that analyzes the data to identify emerging risks of our branch network and trigger early warnings for swift interventions.
Speaker #3: This is with respect to the operational risks which are there at the field level, and this comes under the ages of our audit department.
Speaker #3: The second initiative that we have taken is that we have formed a dedicated gold loan cell which has been set up to drive the robust portfolio monitoring.
Speaker #3: Its policy implementation and direct operational support for our branches which are doing the gold loan. The third is with respect to the Yuva Banking Mithras.
Speaker #3: So, these Yuva Banking Mithras have been identified, and in each of the designated branches, to assist the youth account opening, promote youth-focused products, and encourage safe and responsible digital banking.
Speaker #3: OCR-based CTS validation is being implemented as an additional alpha numeric layer in the check truncation system to verify check codes during the clearing and rostering the fraud prevention.
Speaker #3: As regards the businesses concerned, the global business has grown by more than 21 percent on a YOY basis from 15,62,000 crores in September 2025 to 18,92,000 crores in September 2026, with an incremental growth of 3,30,000 crores.
Speaker #3: Global deposits have increased by more than 21 percent on a YOY basis from 8.53 lakh crores in September 2025 to 10.37 lakh crores in September 2026, with an incremental growth of 1.84 lakh crores.
Speaker #3: Domestic deposits have increased by 23 percent on a YOY basis from 7.3 lakh crores in September 2025 to 9 lakh crores in September 2026, with incremental growth of 1.70 lakh crores.
Speaker #3: CASA has increased on a YOY basis from 2.86 lakh crores in September 2025 to 3.07 lakh crores in September 2026, with an incremental growth of more than 20,000 crores and the CASA ratio is stood at 34.16 percent.
Speaker #3: Global gross advances have increased by more than 20 percent on a YOY basis from rupees 7.09 lakh crores in September 2025 to 8.55 lakh crores in September 2026, with an incremental growth of 1.46 lakh crores.
Speaker #3: Domestic gross advances have increased by more than 17 percent on a YOY basis from 5.97 lakh crores in September 2025 to 7.04 lakh crores in September 2026, with an incremental growth of more than 1,007,000 crores.
Speaker #3: RAM advances have also increased by more than 18 percent on a YOY basis from 3.48 lakh crores to rupees 4.13 lakh crores, as on September 2026, constituting 58 percent of the gross advances in September 2026, with an incremental growth of 65,000 crores.
Speaker #3: As regards the profitability and asset quality is concerned, operating profit has improved by 33 percent on a YOY basis and is stood at 5,089 crores for September 2026, as against 3,821 crores in September 2025.
Speaker #3: Net profit has increased by more than 25 percent on a YOY basis and is stood at 3,202 crores for September 2026, as against 2,555 crores.
Speaker #3: Net interest income has also increased by more than 18 percent on a YOY basis and is stood at 7,007 crores for September 2026, as against 5,912 crores.
Speaker #3: Non-interest income has also increased by more than 24 percent on a YOY basis and is stood at 2,770 crores for September 2026, as against 2,220 crores.
Speaker #3: Global NIM stood at 2.47 percent in September 2026, as against 2.41 percent in September 2025. Slippage ratio stood at 0.15 percent in September 2026, as against 0.14 percent in September 2025.
Speaker #3: Credit cost stood at 0.12 percent in September 2026, as against 0.15 percent in June 2026. There has been improvement in the asset quality, with the reduction in growth gross NPA ratio and net NPA ratio.
Speaker #3: Gross NPA ratio has improved by 94 basis points on a YOY basis to 1.60 percent only, and net NPA ratio has improved by 23 basis points on a YOY basis to 0.42 percent only in September 2026.
Speaker #3: PCR provision coverage ratio has improved to 94.45 percent in September 2026, as against 93.39 percent in September 2025. As on 30 September, banks' CRAR stood at 17.78 percent against 16.69 percent as on September 2025.
Speaker #3: In the end, I would conclude by saying that as we progress through the second half of FY 2027, the emphasis will be on strengthening the banks' competitive position, deepening the customer relationships, and leveraging the emerging opportunities across the banking landscape.
Speaker #3: Our focus will remain on building a resilient institution that delivers consistent performance and creates long-term value for all stakeholders. Against this backdrop, our guidance for FY 2027 is global advances to grow at 15 to 16 percent and global deposits to grow at 16 to 17 percent.
Speaker #3: Going forward, banks' emphasis will be on strengthening the ability to respond to the changing economic and regulatory environment. Capitalizing on emerging opportunities across business segments.
Speaker #3: An ensuring that our growth translates into consistent financial performance and lasting stakeholder confidence. Thank you once again for joining us today, and sparing your time.
Speaker #3: Thank you.
Speaker #1: Thank you, Mr. Karnatak. We'll now proceed towards the Q&A session. Before we proceed, just a second. Before we proceed, we would request you to kindly raise your hands for the queries.
Speaker #1: One of our representatives shall hand over a mic to you. I'll request you to introduce your name and your organization's name before you ask the questions.
Speaker #1: I'll also request you to please restrict yourself to two questions at max. So that everyone gets a chance to interact with the management. For subsequent questions, we'll come back to you later if time permits.
Speaker #1: With that, I'll hand over to.
Speaker #2: Yeah, thank you.
Speaker #1: You can begin, sir.
Speaker #2: I am Ashok Ajmera, Chairman of Achkon Global Services Limited. Sir, compliments to you, sir, for fantastic set of numbers. I mean, most of the banks who have declared results so far have given good results, but yours is phenomenal.
Speaker #2: I mean, on all the fronts, if you see the business growth, the credit and deposit growth, not only in the quarter, overall year-on-year and quarter-on-quarter also, it's a fantastic growth.
Speaker #2: Congratulations for the same.
Speaker #1: Thank you.
Speaker #2: And another good thing is that you have given the target of deposit higher than the target of the credit for the whole year. Which is another I think the I think you said deposit growth target 16, 17 percent and advances 15, 16 percent.
Speaker #1: Correct.
Speaker #2: Which is also a fantastic. Point. Having said that, sir, there is not much to speak on the profitability also you did well. I would just like to know about the provisions which are there.
Speaker #2: I think the standard provisions is reduced by 200 crore in this quarter. Even in the last quarter also, there was a reduction whereas in many of the other banks, the provisioning is increasing because of the ECL and various other factors in the contingency which is, you know, being there globally happening.
Speaker #2: So one thing on that, that on the ECL provisioning, how much what is our preparedness? How much is the total amount which we need to provide?
Speaker #2: How much has already been provided? And how what is the road ahead on that? My second question, which is concerning everybody that you have given the growth target and even achieved also the past performance is also good.
Speaker #2: But looking the current situation, like especially the global situation, internationally, what is happening, the crude and locally also, we are facing severe drought in the country.
Speaker #2: So on this background, do you still see you still maintain this kind of targets and you still hopeful of achieving it? And if yes, then how are you meeting this challenges, sir?
Speaker #1: Yeah. Yeah. Thank you so much, Ajmera ji. So on your first question, with respect to provisions, if you see the provisions have been reversed in the standard assets, that is one of the major components where 213 crores has been reversed in this quarter to just give you a sense that this is because of our good credit monitoring and the deposit our zonal collection centers which are working.
Speaker #1: If you go to our slide number 25, you will see that for SMA 5 crores and above, we have reduced that number now to 2,553 crores as against 6,000 plus crores as on September 25.
Speaker #1: So our SMA which is 5 crore and above as on 30 September 2026 is now only 0.3 percent of our standard advances which was earlier 0.989 percent.
Speaker #1: So this reduction in the number, standard asset on others is because of the one account which was under SMA which has now fully moved out of SMA and as per the RBI circular we had made some provisions that provision has been reversed.
Speaker #1: So that is the advantage now we have with good credit monitoring and the SMA numbers which are coming down with the bank. So that is 1 point which is there.
Speaker #1: Second point was with respect to the ECL and its provisioning. So ECL impact we have already started doing the computation and other kinds of things whether it is the PD, whether it is the LGD, SICR and other kinds of things.
Speaker #1: Already we have onboarded a consultant, technology kind of interventions are already they have also started. So we have to go to the board with the note about the ECL and its numbers as far as the RBI guidelines are concerned which kicks on 1 April as you are aware.
Speaker #1: So broad numbers on the total amount, I would not be sharing at this moment because we have to go to the board with the note.
Speaker #1: But the ballpark number on the impact is that on the CRAR side, it may impact somewhere around 0.5 percent our CRAR on an annual basis in the next four years.
Speaker #1: So if I share with you the CRAR was on 30 September, it is well above 17 percent as against the regulatory requirement of 11 percent.
Speaker #1: And apart from that, we have a profit of 6,000 crores of the H1 and with this run rate we should have a profit of around 12,000 crores in this financial year and with that kind of profitability being there, the additional provision of 0.5 percent per annum the profitability itself will take care.
Speaker #1: In fact, it is much more profitability is much more than that. So that is also taken care of. As far as the headwinds which are there with respect to the West Asia crisis as you rightly said, El Niño impact which is coming and some of the places where drought condition in some districts like in Maharashtra which is coming.
Speaker #1: So see this situation was there since the start of this current financial year. West Asia crisis started in February. So we have already completed two quarters.
Speaker #1: Not only for our bank, for the entire industry. And all the banks are giving good numbers. So economy is quite healthy in that respect.
Speaker #1: Crude crude issue was there but that has also been smartly solved by the government and there is no issue of the availability of the crude in the country.
Speaker #1: Only thing is that the price has increased because of which some increase inflation tick has happened. But however if you see the GST collections on a month-on-month basis more than 2 lakh collection is coming per month in the GST on a regular continuous basis.
Speaker #1: Second thing is that all the reports which are coming whether it is from IMF, whether it is coming from the RBI data, the estimation of the GDP for FY27 is also very robust.
Speaker #1: In fact, IMF says that it would be should be somewhere around 6.7. So even if it is 6.7, though the Indian estimates are higher than that, even that 6.7 is somewhere which is very high compared to other countries.
Speaker #1: Across the globe. So that why definitely the fundamentals within the country are strong. Banking fundamentals are also strong. Asset quality is good. And this El Niño effect was there also during the monsoon.
Speaker #1: So there were certain pockets in the country where there was impact of the monsoon. But that also has been taken care of. If you see the numbers of most of the banks which have started coming, there has not been much impact as far as the asset quality is concerned.
Speaker #1: So we feel that with the kind of robust systems that the bank has built all the banks have built and we have also built and the agility with which we are working we are confident that we'll be able to try with this headwinds which are there.
Speaker #2: Yes, sir. Point well taken, sir.
Speaker #1: I will just add to what.
Speaker #2: Yes, sir. Yes, sir.
Speaker #1: You see our results. What we have done what we have done with respect to provisions is we have substantially increased increased the provisions for bad and doubtful debts during the half year.
Speaker #1: If you see the last half year provisions that we have made it was only 1,500 crores. As of that date. Today if you see we have almost got 2,500 plus.
Speaker #1: And in so far as these provision for standard assets it is actually a reduction trajectory but outstanding as of now the provisions that we hold for standard continues to be at around near 400 crores.
Speaker #1: So which is not reflected in the results. So we have sufficient provisions. And if you look at our SMA as a whole it is around 2.6 percent.
Speaker #2: Yeah, very excellent.
Speaker #1: So 2.6 percent of the total advances. 2.6 percent if you take for argument sake the entire is going to become bad still we have enough room to provide for it without any problem.
Speaker #1: Under the ECL. Even worst case scenario.
Speaker #2: Yes, sir. My second observation and some question is on the declining percentage of CASA over last I think two, three quarters this quarter it might be because of the overall deposits have increased because of the FCNR and the dollar deposit which has come in.
Speaker #2: And it is affecting to some extent our NIM also if the NIM is also overall if you see is you know as against 2.58, 2.52, now 2.47.
Speaker #2: So but at the same time because of the rate hike now we are going to benefit because the leg period is there the deposit rates are going to be increased maybe much later whereas you are you know the credit I mean the rates interest rates have already increased on the repo linked loans.
Speaker #2: So the benefit of that if you factor in how much do you think the NIM can improve or how many basis point we are going to get the benefit because of this rate hike in the next couple of quarters and how do you plan to increase the CASA percentage again and thereby increasing the NIM.
Speaker #1: Yes, sir.
Speaker #2: Yes. CASA percentage has come down you are rightly saying. Present CASA percentage is somewhere around 34.16 percent. However if you see in absolute terms we have grown our CASA by 7 percent.
Speaker #2: In spite of these challenging times and also on an absolute number it has grown by more than 20,000 crores on a YOY basis. So that is one point just I just wanted to make.
Speaker #2: So as a franchise we are totally monitoring as far as the CASA numbers are concerned and also retail term deposits are concerned. So if you see our presentation you will see that our CASA numbers are amount is percentage terms is around 34 percent and retail term deposit percentage is around 43 percent which makes it 77 percent.
Speaker #2: From the franchise which is the retail franchise which means that the bulk deposit is only 23 percent. However having said that let me say that our franchise for advances credit growth is also very strong at the branch level.
Speaker #2: So we are have having good pipelines in corporate loans we are having good pipeline for the RAM advances also. Because of which the intake which is there because of the credit flow we need to raise resources for the meeting this credit.
Speaker #2: Growth which is there in the system. So to meet that credit growth we are taking some bulk deposits which are because of which as a function this CASA percentage is looking lower.
Speaker #2: Which is at present 34 percent but nonetheless we are working on it. Lot of strategic moves we have taken in order to improve not only the amount of CASA which is there in absolute terms but also in percentage terms.
Speaker #2: So that is one part. As far as the NIM part is concerned as you rightly observed that NIM because of this the NIM is also getting impacted you are right.
Speaker #2: If you see our global NIM which was 2.52 percent has come down to 2.47 percent. As on 30th of September and there is been a reduction of five basis point.
Speaker #2: So FCNR raising of deposit has also taken this one impact on this reduction of NIM and if I share with you the data we have raised FCNR of 2.2 billion dollars.
Speaker #2: So 2.2 billion on the liability side and 2.2 billion on the asset side in the international book. Where the leverage has been given. So that impact on this around 40,000 crores is around five basis point.
Speaker #2: That is the impact which has happened in the global NIM. So this five percent five basis point impact is because of the FCNR which is there.
Speaker #2: As regards the increase in repo by RBI is concerned there we have done a ballpark calculation see RBI has raised the repo rate by 25 basis point.
Speaker #2: If you see our presentation also 60 6 percent of our domestic advances are external benchmark linked which is repo only. So the day the repo was raised by the RBI we also had a ELCO meeting.
Speaker #2: Same day we have passed on the increase in the repo rate. So that will that impact we will get positive impact we will be getting in this quarter full quarter.
Speaker #2: So that impact will be there and on the deposit side the rates will obviously increase because the repo has also increased. But. That impact will be staggered because as you are aware that nearly 60 percent of our term deposits are in the category of one year to 18 months.
Speaker #2: So that they will take time to mature and then the repricing will happen only after that. So this increase in the repo rate will also on a ballpark number presently that we have done is may help the bank in improvement in the NIM by around 6 to 7 basis point.
Speaker #2: Yeah.
Speaker #1: Sir. Last on the technology front sir. Lot of things are happening and especially in the compliance and the cyber security on and that front and now DPDP coming in and on that.
Speaker #1: So how prepared we are on the technology front especially in happenings in so many things are happening around in the various banks in the financial institutions.
Speaker #1: How prepared we are on that front and what kind of still the so many journeys which are still pending and what kind of budget do we have for the technology in the remaining part of the financial year 27 sir.
Speaker #2: Yeah. So as far as the technology is concerned see as I already said in my last conference after our Q1 results that whatever the budget we have kept ourselves for the IT part technology part whether it is the OPEX or the KPEX whether it is for core IT whether it is for digital banking or cyber security that budget remains intact.
Speaker #2: So that kind of is pending we'll be doing in this financial year FY27. So as far as our technology preparedness is concerned we already have a big four consultant with us who is guiding us on the transformation of IT digital and cyber security.
Speaker #2: And our system is fully prepared and agile as far as the cyber security risk and other kinds of things are there whether this e-mudra was there there also the certifications which are there we are having those certifications and continuous advisories are also coming from various government departments on these kinds of risk which are emanating and we are immediately complying with those guidelines and doing the necessary changes which are there.
Speaker #2: So there are lot of journeys which are going on as far as our products are concerned whether liability products whether it is our asset products or whether it is on the wealth management product side.
Speaker #2: So these these journeys will continue and every quarter we'll be launching some products in this presentation also if you see they are being there have been there are four products we have launched in this quarter on the digital side.
Speaker #2: On the analytics sides now through our data lake project which is under the artificial intelligence and machine learning now the book is more than 21,000 crores.
Speaker #2: On the analytics leads which are coming through the CRM platform. So lot of money is being spent on technology not only for the business growth but also on cyber security part and we are pretty confident that the bank on the technology platform is quite strong and robust now.
Speaker #2: Thank you.
Speaker #3: Before we proceed I just wanted to add in that people who have joined us online can drop in their questions to Mr. Ganesh Shankanavar on 7738688746.
Speaker #3: I repeat 7738688746. We are ready to take the next question. You can go ahead sir.
Speaker #1: Congratulations to team Bank Of India for excellent performance and your initial guidance. Sir. Looking at the performance I think we are speaking a little lower than what we are achieving.
Speaker #1: It's fine that we outperform the guidance. You replied to some of our questions which are prompted to us. What is the size of the book which is sanctioned unavailed?
Speaker #1: What is the pipeline in corporate in RAM specifically where car loans are concerned? Housing loan tickets are concerned. It is more customers or the average ticket per customers rising?
Speaker #1: Second thing is the same customer can be multiple products can be sold. How are we tapping them? And if so how many products are we able to establish with each customer?
Speaker #1: On digital spend you said lot of budgets but I understand in the marketplace our supply chain various other corporate led solution trades platform is yielding good advance yield compared to many other advances.
Speaker #1: Looking at that can you elaborate a bit what Bank Of India's engaging in which is changing our model from a traditional banking model?
Speaker #2: Yeah. So as far as the pipeline is concerned on the credit side let me tell that as far as the corporate pipeline is concerned as on 30th September we are having a pipeline of around 65,000 crores.
Speaker #2: That is the pipeline in the corporate side. Apart from that in the RAM side also we have a pipeline of around 20,000 crores and then we also have pipeline created in the pool and co-lending and the supply chain platform.
Speaker #2: There is also a pipeline of around 4,000 crores apart from that we have a digital platform also now as you are aware there also we are having a pipeline of somewhere around 3,000 crores.
Speaker #2: So in total if you see the pipeline which is a very secular pipeline not only corporate but also RAM digital lending and also and co-lending and also supply chain we have a total pipeline of somewhere around 86, 87,000 crores.
Speaker #2: Total including corporate credit. And if I give you a sense on the corporate credit side the main numbers are from renewal energy of more than 12,000 crores where we have pipeline in which we have sanctioned and yet to be disbursed or in principle approval is given and the proposal is under different stages of being placed to the committee in power sector we have more than 9,000 crores pipeline road sector again we have more than 5,000 crore oil and gas we have more than 5,000 crores cement is there which is again more than 4,000 crore manufacturing particularly with textile and others is more than 2,700 crore construction also 2,100 crore automobiles also more than 2,000.
Speaker #2: So these are the major sectors where we are having these pipelines which are there. As regards as you rightly said that in the new economy which is coming the supply chain and other kinds of things we have now separately made one branch in Mumbai centralized branch in the entire country which we call the SBB wherein the supply chains are now handled.
Speaker #2: So in that branch entire pool entire co-lending entire trades and supply chain is there and we have a very robust IT platform for that for the supply chain financing which is there and in that we have already started building up a book and we have already given a target to our 69 zones that every month they have to onboard one new vendor for that supply chain.
Speaker #2: So that work has already started presently the book has already touched more than around somewhere around 1,000 crores and we are confident because this has just started in this financial year only.
Speaker #2: So on a dedicated way and with a dedicated team sitting there of around 20, 25 officers who are doing this work only and we are very confident that the by the year end when the time it stabilizes this branch stabilizes under this supply chain financing we should have you should be having a business of somewhere around 1,500 crore in the first year itself and after which the scale up will happen.
Speaker #2: In that thing also. As far as the the other question was with respect to I think these were the two main questions.
Speaker #4: Hello. Hello.
Speaker #2: How do.
Speaker #4: Hello. Hello.
Speaker #2: Yeah. Yeah.
Speaker #1: Let me finish.
Speaker #2: Yeah. Average.
Speaker #3: Sir. We'll come back to you.
Speaker #2: Average ticket size is growing in us housing loan on one hand and vehicle loan also there is a good traction and another thing I would like to add what MD has just said is in this digital initiatives especially supply chain related where trades and all where you are saying that yield is good.
Speaker #2: So if you see our growth in the quarter in the current quarter itself we are going grown by almost 10% in that. Okay. So most of the assets are booked in medium enterprises and small enterprises medium enterprises mostly are coming through trades as well as supply chain.
Speaker #2: So there is a good traction over there. So we go to continue to improve in that and then make a good book out of it.
Speaker #2: So in terms of this one. So there will be a lot of traction through digital which will flow into the supply chain and other trades related platforms.
Speaker #2: So the number is also growing. Our trades portfolio is also growing very very robust. That's how it is.
Speaker #1: Yes. Hello.
Speaker #2: Yeah. So let somebody ask.
Speaker #1: My name is Mayur Gala. From through Alpha FinServe. I'll directly come to the questions. What is the current government's stance on its stake? Any OFCs?
Speaker #1: OFS?
Speaker #2: OFS of what?
Speaker #1: Yeah. And what is the current government's stance on its stake in the bank?
Speaker #2: Yeah. Yeah. Okay. Yeah. So as far as this is concerned see SEBI guideline we are a listed entity. SEBI guideline says that the promoter should be below 75%.
Speaker #2: So we are already within that. We are 73.8%. So that we are already complied. So at present we have no indication from the government to further reduce this number.
Speaker #2: So we don't have any plan also as on date when we are speaking from board also for raising any capital.
Speaker #1: Okay. And next question is what is the ROI target and when does the band expect to reach it?
Speaker #2: Yeah. So ROI as I said in my last analyst presentation also that we will now try to have ROI of above 1% on a quarter on quarter basis.
Speaker #2: So if I give you just a sense from the last three quarters March 26, June 26 and now September 26 we have been able to have our ROI above 1% and we will at the top management side that is our endeavor that we will have ROI of above 1% in the ensuing quarters also.
Speaker #2: And the overall March 27 also we'll show ROI of that is our guidance that we'll be showing ROI of above 1%.
Speaker #1: Okay. Any higher targets for the future?
Speaker #2: So presently the guidance we are giving up to March 27 only. If you see traditionally our ROI has been somewhere between 0.89 to 0.9495 in the last two three years.
Speaker #2: But this year consistently we have said that we'll be having a ROI of 1%. One we hit this mark of 1%. FY28 should be even better.
Speaker #1: Okay. Last question.
Speaker #3: Just we'll come back to you sir.
Speaker #1: Thank you for the opportunity. Congratulations sir for good set of number. My first question is about the recovery in return of accounts triple to 978 crores.
Speaker #1: This quarter are there any specific large resolutions driving this and what is the sustainable quarterly run rate as the NPA pulls now shrinks? You mentioned this last time also.
Speaker #1: So just wanted your view on that.
Speaker #2: Yeah. So recovery in return of accounts if you see that this number is at somewhere around 900 crores in this quarter as against the previous quarter which was lower.
Speaker #2: There are two three accounts not a single account but I can say that there are two three accounts which were lumpy accounts but we are expecting that with the kind of targeting that we have come done for these accounts which are like fully written off where we are targeting some resolution for us either through OTS or through NCLT or any other route.
Speaker #2: So we are expecting that we want to maintain this kind of run rate during the entire year.
Speaker #1: Perfect. My second question is about NPA provisions which got doubled to 1,000 crore plus. And despite slippage at record low of 0.15% is this front loading under the new RBI provisioning norms and which sectors are being provisioned for?
Speaker #2: Yeah. So if you see this number by it has increases see Q1 there were slippages of around 1,800 crore. This quarter also there is a slippage of around 1,100 crore.
Speaker #2: So this provision which has been done is to take care as per IRAC norms for those provisions. So whatever is the NPA we have provided as per the IRAC guidelines.
Speaker #2: So these are all those provisions which are as per the fresh slippages which are happening. So just to give you a sense we have a this PCR of more than 94% and tangible PCR of somewhere around 73%.
Speaker #1: Got it. Thank you so much sir.
Speaker #2: Thank you.
Speaker #3: Who would you like to take the next question?
Speaker #1: Yeah.
Speaker #2: Excellent. Set our numbers. Growth on growth as you had indicated earlier. My name is. A lot of question have been asked so I'm changing the questions I had earlier planned.
Speaker #2: So you mentioned you have made extra provisions and now in response to query you mentioned these are as per IRAC norms. And now a couple of public sector banks have clearly articulated that they have started making taking steps towards creating front loading provisions for ECL.
Speaker #1: Correct.
Speaker #2: Indian Bank has clearly articulated two quarters in fact half of their ECL estimate they are also being clear and giving estimate is already done.
Speaker #2: A couple of other public sectors have also done in fact when we saw the slippages and provisions we were wondering whether we are also taking this similar steps but why don't we have clarity and indicate to the investors whether we have front loaded 1,000 crores or 2,000 crores and if you can give the estimate as of today about the ECL provisions we need to make how much we have already done and the in what period we would should be front loading or we will go as per the glide path of RBI.
Speaker #1: Yeah. So as we are aware that the ECL provisions start from 1st April 27. So as far as the present provision on the ECL is concerned we do not have any provision on ECL side.
Speaker #1: So what we have decided is that the entire team is working on the ECL guidelines. So we have a consultant also we are taking all the care as far as the IT platform is concerned for the ECL computation and other kinds of things.
Speaker #1: So we will go to the board get the entire preparedness and other things get approved from the board and then we will start making the provisions.
Speaker #1: So we expect that from Q3 onwards we will be making the provision Q3 and Q4 will be the two quarters when we should be making the front loading of the provisions as far as the ECL is concerned.
Speaker #1: That is the first part. Second part is with respect to the how much it would be coming I would just share with you one number the if you see the SMA data which is there on page number 25 of our slide as I told earlier our SMA number has now come down to 2,200 crores above 5 crores.
Speaker #1: So which was more than 6,000 crores as on September 25. And it is only 0.3% of the our standard assets. So with this kind of very robust zonal collection centers that we have and the work which is being done from the credit monitoring side in the bank we are very confident that the overall ECL provisioning will be at a very rational number for us with the impact being that the our SMA numbers are in control.
Speaker #1: That is one part. Second part the ballpark calculation which is there the impact should be somewhere around 0.5% on the CRAR per annum. It would be spread across over the next four years.
Speaker #1: And as I as you are aware that we have a CRR of more than 17% which is well above the RBI threshold of 11%.
Speaker #1: And with a profit already we have made a net profit of more than 6,000 crores. And if you if I give you the guidance if you double that to we should be having a profit of somewhere around 12,000 crores with this kind of run rate.
Speaker #1: So this profitability will also add to the CRAR and this there will be hardly any impact on the CRAR also in that. So but Q3 after in the analyst presentation of Q3 by which time we will have the board approval also we will be in a clear position to give you some clear guidance about the numbers but definitely this should start happening from the Q3 onwards.
Speaker #1: Fine. Thanks. Excellent.
Speaker #3: Before we proceed I would like to take an online question sir.
Speaker #2: Yeah. Second second part of the question.
Speaker #3: Okay.
Speaker #2: Yeah. Now we were looking you gave a rough you gave a very clear guidance on the full year credit growth and all. From your feeling what type of feeling we are getting not the festive season the Sarah is already over.
Speaker #2: But from kind of a global headwinds coming there's a lot of uncertainty in the minds what type of growth will be having in terms of consumption and this is a time everybody goes out and spends everybody has been expecting for some relief from the government when they are announcing hopefully it should come by the Diwali but what is the kind of feeling we have in this quarter festive consumption growth also e-commerce and non on also on the ground vehicles homes etc etc and also if you can just highlight about what are the investments and applications of artificial intelligence for our growth.
Speaker #1: Yeah. So as far as this headwinds which are there as you said as I replied earlier also I will say the same thing that the economy is quite robust in that sense that GST collections as I said on a monthly basis is now with a good run rate of more than 2 lakh crores per month and if you see the supply this e-way bill data also there also we have nearly 13 to 14 crore of e-way bill getting generated every month.
Speaker #1: So that kind of invoices and transactions are happening in the economy. In spite of the West Asia crisis which is there in spite of the fact that some El Niño impact is coming Indian economy has been quite robust and we have been able to absorb it with the kind of infrastructure the supply chain that has been built and also the warehousing that has been built in the country.
Speaker #1: So as on now we do not foresee any kind of impact which is coming out of that as far as what the growth potential is there as I already said that we have a credit pipeline of somewhere around 80,000 crore.
Speaker #1: If you see our global loan book is somewhere around 8,55,000 crores. Loan book in the sense outstanding as on 31st of 30th of September.
Speaker #1: So 86,000 crore of loan book means that we have a credit pipeline of nearly 10% of our loan book. That's a very handsome loan credit pipeline that we are having.
Speaker #1: At present we do not see any impact which may have on our business growth numbers for this financial year.
Speaker #2: Yeah.
Speaker #3: Yeah. We'll take the online question and come back to you. Sir I have a question from.
Speaker #1: Investment in AI. So yes investment in AI see we have frankly speaking we have just approved our AI policy from our board. As per the RBI guidelines we have already started scouting for certain AI kind of features which are there.
Speaker #1: But a very preliminary level we already have now this our data lake project in which we are using AI as a predictive AI. Not a generative AI as a predictive AI kind of thing which is there.
Speaker #1: The analytics lead which are coming under that we have already touched a number of somewhere around 21,000 crores. So in lot of the different areas we are engaging with some of the vendors and other things for having AI components particularly on the asset book side liability side wealth management and also particularly on the transaction monitoring.
Speaker #1: So there we are trying to have some AI engagement. So but once the deal is signed or anything then only we can be able to divulge that.
Speaker #1: Thank you sir.
Speaker #3: All right. I'll take the next question from Siddharth Rajpurohit. He's from Systematics Institutional Equities. He's asked that within non-interest income recoveries are higher please share more light.
Speaker #3: Also other non-interest income of rupees 598 crore is down by around 25%. So what was forms a part of this line item and why is it significantly down quarter on quarter and year on year?
Speaker #1: Yeah. So as far as our non-interest income is concerned we have grown it from 2,200 crore in September 25 to 2,700 crore. The main growth has come from recovery from the return of assets where the growth has been 190% on a YOI basis and now it has touched 978 crores.
Speaker #1: And also from the treasury income profit from the exchange transaction where the growth is 157% and it has touched the number of 411 crores.
Speaker #1: So and on the overall number it is a YOI growth of 25%. And we are very hopeful that we will be able to maintain this run rate of more than 2,500 crore in a ongoing basis.
Speaker #3: Okay. Thanks sir. Aman from ICICI Securities wanted to ask that gold loan outstanding and split into agriculture and retail gold. He wanted an explanation on that.
Speaker #1: Okay. Okay. So as far as the gold loan outstanding as on 30th September is concerned we are having a gold loan book of around 61,000 crores.
Speaker #1: And as far as the split is concerned so majority of this gold loan is booked under agriculture. And some of which is also in MSME also.
Speaker #1: And the other part is the retail.
Speaker #2: Retail. Yeah.
Speaker #3: Okay. I'll take the question. From the floor. Please go ahead sir.
Speaker #1: Yeah. Yeah. Good evening sir. My name is Bhavesh Shah. Sir recently one prominent NBFC has flagged concern about stress in their gold loan portfolio.
Speaker #1: So do you see the this similar trend for you or for that matter any any other asset classes?
Speaker #2: Yeah. So what we have seen from the media reports and other kinds of things there are certain issues in some of the NBFCs gold loan NBFCs where it is observed that even when the account is SMA fresh sanctions is taking place.
Speaker #2: So that is what the stress has been observed over there. For as far as our book is concerned we do not have any much stress over there.
Speaker #2: If I tell you the NPA number it is also at a very low number it is hardly 1% is our 0.13%.
Speaker #1: Yeah. 0.13% is there. So we have a very clear SOP as far as the gold loan is concerned. In the SOP it is very clear the moment it becomes NPA there are two notices that we have to give to the borrower.
Speaker #1: After which we go for the auction of the gold which has been pledged to us. And unless and until there is some spurious gold and some fraud happens at the time of selling we observe that some spurious gold was there.
Speaker #1: Majority of the time full recovery happens. In such accounts. So we do not foresee any risk in our portfolio. And lot of guardrails we have now put in the portfolio which also includes because of the price volatility on a daily basis now our CBS platform is putting the monitors the value of the gold so that the LTV of 25 loan to value of 75 basis is maintained at all times.
Speaker #1: So we at present we are having a LTV of 75 in gold loan. Thank you.
Speaker #3: We'll take last two questions. You can proceed sir. Please give me your name and organization's name.
Speaker #2: Sir. Ramesh Bhojwani from Meta and Vakil. One is an observation 0.4 on page 4 oversees deposits have increased by 11.52% to 1,37,401 crore. But overseas advances have increased by 35.21% year on year to 1,51,160 crore.
Speaker #2: Is there any specific cause or reason?
Speaker #1: Yeah. You are right. You have rightly observed that yes advances in overseas we have touched 1,51,000. In deposit it is 1,37,000 crores. So this the entire leverage part of the FCNR is booked in the international loan book.
Speaker #1: So that is why this number is coming. So as I said that we have raised 2.2 billion. Which is more than 20,000 crores. So everything is parked over here only.
Speaker #2: It explains. And the second thought was inflation has spiraled beyond control. This is a very very strong feeling and a strong experience by across the economy by all sectors.
Speaker #2: And the unspoken word is RBI may not wait till December to announce another rate hike and this time it may be 50 basis point or even 75 to contain the inflation at any cost.
Speaker #2: If that so and if inflation still doesn't come under control there is a fear of the projections made for GDP and growth may be toned down if not an alarming basis.
Speaker #2: What are your thoughts and comments on the same?
Speaker #1: No there is nothing much in that comment. So this is the worst case scenario. Okay. You are telling. So let when as and when that scenario pans out.
Speaker #1: So definitely we will be giving some guidance on that.
Speaker #2: Thank you and all the best.
Speaker #3: Okay. With that we'll come to the last question. Please proceed sir.
Speaker #1: So very quick question. A new vertical is emerging and a lot of money is pouring into AI-led capex specifically on the infrastructure side as well as GPUs.
Speaker #1: And the quantums are significantly large. So what is our view on this and you know how are we approaching such transactions because I'm sure there'll be a lot of traction going forward in the Indian market.
Speaker #2: Yeah. Yeah. So yes as I said that in the corporate book we have a credit pipeline of more than 60,000 crores which is both domestic and international book.
Speaker #2: And as I said that we are there it is totally secular. It is not only for one sector. We are there in infrastructure. We are there in manufacturing.
Speaker #2: And there are in the new renewable energy also it is in data center also. It is for EV vehicles batteries everywhere we have given either sanctions or in principle approvals.
Speaker #2: So lot of good pipeline robust pipeline we are having in the corporate book in the capex side and it is totally secular pipeline which is there and it is not like for one or two sectors.
Speaker #2: It is spread across the sector. In fact it is there in steel also we have given sanctions for cement also we have given sanctions in textile also.
Speaker #2: So it is spread across the board.
Speaker #1: So sir I understand that we have an exposure to a lot of legacy industries but specifically what sort of growth do you foresee from this vertical that I'm speaking about?
Speaker #2: Pharma.
Speaker #1: No.
Speaker #2: GPU-led capex AI-led capex.
Speaker #1: Steel.
Speaker #2: No AI-led capex.
Speaker #1: Acha AI AI-led capex. Okay. Okay. Data centers kind of thing. So already we have given some sanctions some of the sanction for data center are there some in principle approvals are already there.
Speaker #1: So lot of capacity is getting built up on data center. We are very mindful of that and we are looking at certain transactions which are there.
Speaker #1: Some of the in principles and final approvals also we have given for the data center. And definitely this is one area which is in our mind for funding.
Speaker #3: Last question.
Speaker #1: Just a small clarification. Are we looking at just the infra side within this or GPUs as well?
Speaker #2: Both. Both.
Speaker #3: question we'd like to end now.
Speaker #2: Sir. I'm just this is Pritesh here. So sir our outstanding to realist sector is a big proposal as as we see in the sector.
Speaker #2: Do you see any what do you see the the any any stress coming forward for next coming years? Right now it's okay. But the sector lending is very large as compared to other sector.
Speaker #2: So how do you comment on that? Commercial real estate. See basically it is like this. Most of the real estate export it is coming through housing loans.
Speaker #2: Okay. And commercial real estate as a project lending is very very minuscule in our bank. It is not even 2 3,000 crores. Okay. So most of it is from housing sector.
Speaker #2: It is houses market housing. That's what we so we don't see much problem there because many of them are all ticket size of 50 60 lakhs is the average ticket size.
Speaker #2: So most of them are either in tire bond housing.
Speaker #1: Percentage of the lending to the the real estate developer would be what percentage of that?
Speaker #2: No. It's very very minuscule. I can give you the data subsequently. That's what amount is around 3 4,000 crores. Not more. Understood.
Speaker #1: That's all. And sir as far as NBFC is concerned I mean NBFC is there. That growth rate is also quite good growth rate do you see that retail is overreaching because we get lot of calls I mean generally that do you see this this sector can come off I mean certain period of time?
Speaker #2: See there are two things. It depends on the exposure that the my NBFCs take in terms of if you look at our pool buyout or direct assignments that we take most of them are all backed by securities.
Speaker #2: Our unsecured portfolio is very less. It's hardly 7% of the total portfolio in retail. So NBFCs they who have very typical exposure to personal loans and other types of loans they have a problem.
Speaker #2: Otherwise people who are NBFCs who are into SME lending who are into lap lending there is no problem. We don't see much stress in that.
Speaker #2: And another thing that we do in terms of an NBFC lending is we look at the funding profile as well as the asset profile.
Speaker #2: We also look at the NPA ratios over there. And the collection efficiency ratios they are very clearly before we take exposures. So so we even in NBFC exposures we have a robust this one.
Speaker #2: That's what it is.
Speaker #1: And sir infrastructure as far as infrastructure sector is concerned as why why there is some decrease. Do you see that the overall infrastructure spending has come down as far as your exposure to particular industries?
Speaker #2: No no it is not like that. See you have to look at the outstanding like if you see also our outstanding it is more or less flat right in spite of the sanctions.
Speaker #2: So what is happening in the system is that many infra projects which are achieving their COD they are going coming for refinance. And they are being financed at very low interest rate by other institutions.
Speaker #2: So we have left quite a few transactions where we had lent during the construction stage where the COD happened and after which we did not go into the this refinance kind of thing because it was at a very low interest rate.
Speaker #2: So this kind of thing is there in the market which is happening. Some churning of assets are happening in the infra side because of it.
Speaker #2: So otherwise also whatever pipeline and sanctions we have given infra takes lot of time to get disbursed because it gets disbursed in stages. It takes at least 7 to 8 quarters to get disbursed the full infra loan whether it is a road whether it is a port or any other kind of transmission line and other things.
Speaker #1: Okay sir. Thank you very much and all the best for the good results. Thank you very much.
Speaker #2: Thank you.
Speaker #1: Thank you.
Speaker #3: Thank you everyone for joining us today. Thank you Rajneesh sir and and the entire Bank of India management team. Have a nice day everyone.
