Siddharth Rajpurohit: Good evening, everyone. Thank you for joining Bank of Maharashtra's Q2 FY27 post-results earnings call. From the management today we have Mr. Nidhu Saxena, the MD and CEO of the bank. We thank the management for giving us the opportunity to host the call and congratulate on the strong numbers. I hand over the call now to Mr. Saxena for his opening remarks. Thank you, and over to you, sir.
Nidhu Saxena: Thank you, and good evening to one and all. Thank you for joining this investor call. The business and the numbers for this quarter has been quite encouraging for the bank. We had set out the year with a set of guidance numbers across all metrics of growth, profitability, asset quality, capital adequacy, and so on. I am happy to share that each one of those guidance numbers have been met, and this is getting consistently met also, is one good feature. I will quickly take you through to the highlights. The business for this September 2026 has grown by 25%, within which advances have grown at the rate of 30% year-on-year. A large contribution, significant contribution has come from the IBU. Minus the IBU also, the credit growth in the bank year-on-year has been healthy 23%.
Nidhu Saxena: All verticals of the RAM, retail, agri, MSME, have grown individually and have grown more than 20%. The large credit growth which is seen is also year-on-year growth of 38%. So INR 36,000 crore of large credit has grown year-on-year. As I just said, 50%, INR 18,000 of this has happened in the GIFT City IBU branch of the bank. The rest, INR 18,000, has happened in the domestic large credit, which is again a healthy 19% growth. As against the domestic credit growth of 23%, the deposits have also grown healthy 22% year-on-year. So even if we exclude the FCNR, the deposit growth has happened at the year-on-year rate of 19%. Within which CASA has grown in the bank at 12% year-on-year, and bank has added in absolute terms INR 19,000 crore of CASA over the last FY. GNPA also has improved.
Nidhu Saxena: It has reduced by 47 basis points, and GNPA stands at 1.25%. Likewise, NNPA also registered a reduction by six basis point. NNPA for the bank is at 0.12%. Provision coverage ratio is at a healthy level of 98.53%. Stress in the loan book also has been well managed. It has also reduced overall 167 basis points year-on-year from 4.93% to 3.26%, within which the SMA 1 and 2 portfolio is also shown a reduction of 50 basis point, and it stands at 1.37%. We have seen the improvement in the stress levels across the sectors, retail, agriculture, MSME, every sector has registered improvement. Above INR 5 crore, the stress is mere 0.13%, and exclude one state account, it is only 0.11%, which also has improved four basis point. The cost of deposits and overall costs we have been able to manage and maintain well.
Nidhu Saxena: We have been exercising the various options of availing refinance, raising through infra bonds from time to time. Today in the bank we have an outstanding of INR 18,300 crore of refinance book, which is between 6% to 6.5%. Likewise, infra bonds raises, which happened in the last FY, outstanding is INR 2,400 crore. These have been also supporting the credit growth at reasonable, and able to give reasonable profitability levels to the bank. So cost of deposits also has reduced for the bank year-on-year by four basis point, stands at 4.38%. Likewise, cost of funds overall have shown reduction of 25 basis points. It stands at 4.07%. So with slippages also staying under check, profitability for the bank has been good. Operating profit has shown a growth of 31% year-on-year, while the net profit has grown year-on-year 41%.
Nidhu Saxena: As a result of this, the ROE has shown a sharp improvement. ROE has improved by 440 basis points, and has reached 27%, 26.98% to be precise. NIM has improved by 12 basis points to 3.97%, and the ROA has improved by 20 basis points to 2.02%. The capital adequacy is also maintained at the healthy level and above our guidance number. CET1 is 15.61% and CRAR stands at 18.51%. Bank is maintaining a good LCR. The LCR is standing at 123% and NSFR at 127%. This is overall highlight from my side. I think we should take some questions from the investors.
Operator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ashok Ajmera from Ajcon. Please go ahead.
Ashok Ajmera: Yeah, thanks. The name of my company is Ajcon. Thank you for this opportunity. Congratulations Nidhu Sir, and the entire team of Bank of Maharashtra for yet another very good quarter, for good set of numbers, fantastic results. In fact, you have reached many of the milestones. The business for the first time, I think has crossed INR 7 lakh crores, if I am not wrong. Credit has also more than crossed for INR 3 lakh crores. Your EPS for the first time has gone above INR 3, ROA is above 2% and many more such milestones, and the records which you have created in this quarter and the half year. Congratulations for that, sir. Having said that, I have got some couple of data points, some observations and some questions.
Ashok Ajmera: Sir, on the provisioning side, there is a low provision for the. The provision for the standard asset and the restructured asset has gone up to INR 603 crores from INR 76 crores in the last quarter. But at the same time, in the contingency side, which was for the COVID-19, we are gradually reducing our provision from INR 1,200 crores to now in three, four quarters, coming down to INR 510 crores. Coupled with that, the ECL provisioning which is required to be done. All these three questions must be having only one answer from your side. What is our ECL preparedness? How much do we need to provide, and how are we prepared for it, sir?
Nidhu Saxena: Thank you, Mr. Ajmera. I think you have covered the top line also issue. Let me confirm that yes, business for Bank of Maharashtra crossed INR 7 lakh crores for the first time. Coming to the second part, which is provisions. I will just like to highlight that provisions for NPAs and provisions for standard, I will give you the number. The NPA provisions, September 2025 quarter last year, June 2026, that is the Q1 of this FY, and September 2026, the current quarter we are discussing. The number you must have seen, reduced number.
Ashok Ajmera: Yes.
Nidhu Saxena: 580 has come down to 120. There are two broad reasons around this. One is that with the high provision coverage ratio we are maintaining of 98.5% plus, our incremental requirement that comes every quarter for providing for NPAs is a very nominal amount. This particular quarter also, we have experienced good recovery in the Q2, and even the upgradation number has been good. Yes, there is a support also from some recoveries in the debt waiver has come because that book also was 100%. We were holding with 98.5% provision. It was almost 100% provided for book and whatever recovery has come also has aided towards that. Net, this is one reason that this provision for NPA requirement has got reduced, and this is how it is. Second, the standard provision book, if you see, INR 158 crores was last year. This year was INR 603 crores.
Ashok Ajmera: Yes.
Nidhu Saxena: This is on account of ECL provisioning that we have done of INR 500 crores. That is how in the standard assets, you are seeing that provisioning number has increased from INR 150 to INR 600 crores. In terms of ECL provisioning requirements, we had our assessments done way back when these draft guidelines were under discussion. INR 250 crores upfront front-ending, we had already done previously for ECL. This quarter, we have done INR 500 crores. Our total assessment was that INR 2,500 crores is our ECL provisioning to be done in four years. Yes, we have put some system in place and validation is going on. Maybe this number appears to even go down. Assuming INR 2,500 crores today with 250 plus 500 in this quarter, INR 750 crores of ECL provisioning that we have already done, this is covering more than one year requirement.
Nidhu Saxena: FY2027, 2028, we have provided for in terms of ECL already by September 2026. Going forward, we see no challenge in making the provisions.
Ashok Ajmera: Alright, sir. Point well taken, sir, on this. The credit growth is also phenomenal, and some part of it, the credit goes to IBU also. You said the large credit of INR 18,000 crore came from the IBU. And must be some credit growth might have come for the lending on the FCNR deposit, which you have collected through the IBU, I think the credit must have gone. Do you think that this kind of credit growth will be maintained because your overall target for the year is much, much lesser than what you already achieved in this H1. So, from the credit growth point of view, whether this momentum is going to be continued now when there is no opportunity for the FCNR, that special window which was opened.
Ashok Ajmera: Along with that, this recovery also from the written-off account, which has been exceptionally high in this quarter, INR 737 crore as compared to INR 305 crore in the last quarter, whether that trend is also going to continue so as to give a color on the future profitability of the bank.
Nidhu Saxena: Ajmeraji, let me take FCNR first. We had a mobilization of 820 million, and 760 million was IBU loan, where the leverage from the IBU is 560 million only. So INR 7,000 crore of FCNR(B). This is what has actually gone into the IBU overall book of INR 18,500 crore. 560 million of leverage from the FCNR thing. Going forward, yes, this window is not there, but coming on the domestic side, I have the guidance number of 18%, and other than IBU, we have grown 23%. So, if you see individually, all verticals have grown at 20% plus, and even the large credit is showing a robust growth. It has grown YoY 19%. In terms of credit pipeline that I am holding, currently, we have INR 23,000 crore of proposals in pipeline, and up to 27 March, we have estimated INR 10,000 crore out of this will be getting disbursed.
Nidhu Saxena: Sectors where we have taken exposure and where these proposal of INR 23,000 crore lie are mostly within infra power, around 18%, infra road, HAM projects of NHAI and 12%, renewable energy 10%, and metal and other space 10%. We are doing niche segments like data centers and other things which are actually the growth opportunities available to banks. Plus, annually, you might have recall, you can recall 200 branches annually we are opening. So in the segment of retail and MSME business, fresh business is getting added through these branches as and when they are opening in the bank. In this H1, we have made 77 branches functional. Whatever new branches are getting is also ultimately adding to the growth, both credit side, deposit side. I do not see a challenge at all to maintain a pace above our guidance of 18% in credit in future also.
Ashok Ajmera: Sir, whether this drought situation, especially in Maharashtra, and we are predominantly present in Maharashtra, has it started showing some signs of getting the negative effect of it. How do you see it is to be played out, whether still you see this 18% or 20% growth is not going to be endangered or affected because of the prevailing drought situation especially in Maharashtra and in the whole major part of the country, sir?
Nidhu Saxena: If you ask about current scenario, I, in my opening remarks, had said that the stress levels have actually gone down, and the same has happened also in the Agri book. So Agri book, the stress has improved. Stress level has gone down by 35 bps to stand at 3.51. So currently, there is no stress as such, which is visible to us. Whatever growth has happened in the agriculture, I would say a very substantial part of this is through agriculture gold loans. So we are very mindful of taking exposure in any segment. This Agri gold loan is all backed by security. We don't foresee any issues around our gold loan growth in the bank. So that's how it is currently. But yes, with the El Niño talk around, we are mindful, we are monitoring.
Nidhu Saxena: As of now, as I said, the entire growth which has come in the bank is through secured gold loans. There is no anticipated stress that will build through the El Niño. But we are monitoring the situation closely.
Ashok Ajmera: Sir, my last question in this round is on our digital preparedness.
Operator: I am sorry to interrupt you, sir.
Ashok Ajmera: Just last question. Just that one question. Sir, on the cybersecurity front and the digital front, technology front, now, as you know, a lot of things are happening, and especially everybody has become very cautious, even though we were prepared for that. What is the extra preparedness for it? Now with this DPDP Act also coming in, and many of the new challenges are to be faced, how are we prepared for that? Is there any extra budget which we have kept for this? How are we going to deal with these kind of situations which are happening around, sir, on the digital front?
Nidhu Saxena: Ajmera ji, I think the question that you have raised is a very relevant one, but it cannot be answered in a line or two.
Ashok Ajmera: Yes
Nidhu Saxena: There will be so many things that Bank of Maharashtra is doing, and doing in association with various entities to safeguard the bank, to safeguard the customers, to maintain the trust that people have in the banking system as such. There are various entities, regulator, who are doing so many things around this. It is very difficult to answer.
Ashok Ajmera: Okay.
Nidhu Saxena: But I can tell you very proactively, there is absolutely, in terms of providing budgets in doing any in the cyber area, we have been very upfront and proactive in taking whatever steps, suggestions that are coming from the various entities, CERT-In, and all. For 2024-2025, we had provided a INR 900 crore budget for IT, where a large part is going towards the cyber. Because lot of things in terms of hardware replacement, in terms of upgradation, had already been achieved. In 2025-2026, we have kept INR 985. So major part is going there, where we do not see budget as a constraint, first of all, and there is nothing as such not to do to safeguard the interest. So this is how things are moving. But as I said, this is a very pertinent, but very lengthy answer is required to
Ashok Ajmera: No, no problem.
Nidhu Saxena: holistically give you. Yes.
Ashok Ajmera: I will take it offline, sir. No problem. We will discuss. Thank you very much, sir, for giving this opportunity and all the very best for the bank. You have been doing a phenomenal job. I think this kind of growth is unheard. And in fact, once upon a time, Bank of Maharashtra had achieved 26%, 27%, and now coming in 29% and 25% of the business growth, crossing INR 7 lakh crore. You are no more that, the people used to have in mind a small bank, or they are saying the Bank of Maharashtra is fully ready to take off from here now. And the kind of growth which you are having, we can see it a INR 10 lakh crore bank very soon. Thank you. Thank you, and all the best, sir.
Operator: Thank you. The next question is from the line of Parth from 361 Capital. Please go ahead.
[Analyst] (361 Capital): Yeah. Hi, sir. Sir, what is the proportion of the EBLR book in the overall loan book?
Nidhu Saxena: Mr. Parth, it is 47%, which is linked to the external benchmark.
[Analyst] (361 Capital): Okay. Thanks, sir. The second question is, our cost of deposits have increased sharply on a quarter-on-quarter basis. What has actually happened here?
Nidhu Saxena: If you see year-over-year basis, we have seen a reduction. But if you ask me, we have been very mindful of doing business and doing business profitably. We have been very consciously looking at alternate sources of raising our resources, whether it is through the refinance window, whether it is through raising infra bonds, whether it is through capitalizing on our strong investor engagement, and going for debt issuances. For the bank, in its 92 years of lifetime, this was the first time that we took assessment, which is around USD 2 billion, is what we had in mind, is what we can have an appetite for raising through the RBI swap windows for OFCBs and FCNR(B), and we decided to do around 1.5. I can tell you that we did USD 1.65 billion putting FCNR(B) and OFCB together.
Nidhu Saxena: There also, we are going to get the rate advantage in this scenario of interest rates going up, both domestic and global markets. I think, the MTN program where we raised. It was the first-ever foreign bond issuance for the bank, and we got 3x the issue size as subscription from the investors and at a very good rate. It was very well-timed. This is a fixed component for the next five years for the bank. We have our calculations in place, some ballpark number as to what in terms of profitability this one initiative of fundraising through foreign bonds will lead to the bank. So those numbers also are there. The point is we have been very cautious. We have done a lot of FCNR, some high-cost bulk deposits. We have consciously allowed to leave the system and focus more on low-cost components of the deposits.
[Analyst] (361 Capital): Okay. From next quarter's perspective, sir, should we expect the cost of deposits to inch up or stay at similar levels? Because next quarter will also have some impact of the FCNR deposits.
Nidhu Saxena: FCNR is actually fixed 6.51. If you ask me, the one-year CD is 7.75, somewhere hovering, even touching 7.9 or something. One-year CD. All these mobilizations, fundraisings have been at a very good rate. 6.11 was my OFCB. It is a five-year fixed cost kind of a thing. Yes, the focus will always remain to see that we are able to attract core stable retail deposits into the bank, where from time to time, if we have to offer attractive rates through some special schemes, we will keep doing that to maintain that. But then high-cost bulk deposit is not the preferred mode to raise resources. Very consciously with this refinance that we took, we have been able to see that our overall cost is, year-over-year basis, gone down. Actually, cost of funds has gone down by 25 basis points.
Nidhu Saxena: And many such raises do not attract the CRR and SLR requirements, the PSL requirements. So they are actually beneficial in many ways to the bank. So the point is, the growth, top-line growth, we are very careful, mindful that how it is impacting and whether the growth is happening in the bank and profitable growth is happening. That is of paramount importance. We always have our complete sight over that part.
[Analyst] (361 Capital): Sure, sir. And my last question, sir. This recovery from written-off accounts of around INR 1,100 crore. How did it impact the interest income line item?
Nidhu Saxena: So in recovery in write-offs, there is 125.
[Analyst] (361 Capital): In total-
Nidhu Saxena: In total recovery in write-offs, there is a good contribution which has come from debt waiver also. In case of debt waiver, we have around INR 100. 442 is the debt waiver we got in write-off recovery. There was unapplied interest.
[Analyst] (361 Capital): 2 to 3 bps.
Nidhu Saxena: Up to 3 bps, which has come as contribution to our NIM. To respond to your query regarding how we look at the write-off and write-off recovery going forward, we have a book of almost INR 21,500 crores of write-off book. We have targeted annually for the next 4 to 5 years to recover something like INR 1,300 to INR 1,500 annually. Why this range? Because out of INR 21,000 crores, we have INR 8,000 crores, which is in NCLT. Out of 151 cases, 147 cases are admitted already, where this amount involved is INR 7,500 crores. So INR 21,000 minus INR 7,500 crores is the non-NCLT book where we are focusing also very hard to get recovery from the write-off. If I tell you the numbers, our recovery of write-off, which was ranging from INR 600 to INR 700, INR 800 annually for FY22 to FY24, it has been increased.
Nidhu Saxena: FY25, INR 1,375 crores, almost doubling that. FY26, INR 1,423 crores. FY27, we have already done INR 1,023 crores. If you see, the stock is still huge for us too, and this is how we are planning that annually for next 4, 5 years. We should be able to target and receive INR 1,300 to INR 1,500 annually. That is the target we have kept. We have two board-approved special schemes where up to INR 1 crore in old accounts, Bank of Maharashtra has consciously worked out a haircut, looking into the underlying securities that Bank of Maharashtra hold, looking into the age of NPA and some other issues. If there is no security around or we have auctioned for N number of times, but we are not disposing. So the metric gives the non-discriminatory, non-discretionary to the field functionaries to go ahead and get recovery in these written-off accounts also. That is how we are pursuing for going forward.
Nidhu Saxena: Last two years, we have seen good outcome from our efforts in recovering in the written-off book. As I said, despite that, we continue to hold a big goldmine, I would say, of INR 21,000 crore, where we can keep targeting recovery. Annually, if anything we are recovering in the written-off book is straightaway adding to our above-the-line OP number.
[Analyst] (361 Capital): Sure, sir. Thanks a lot for a detailed response, sir. Sir, can I ask one more last question, please?
Nidhu Saxena: Please.
[Analyst] (361 Capital): Yeah. Considering we are hearing about the drought situation in Maharashtra and Karnataka, in case the state government announces for a restructuring, how does the debt waiver scheme operate differently from a restructure? Can you just throw some light on the same?
Nidhu Saxena: Mostly what happens is whenever there is a drought-like situation, it is discussed also in the SLBC and a restructuring plan gets approved, whereby we will restructure the accounts without the accounts getting downgrade. This is how things will happen. I think the assessment is done at the SLBC level, and that's how the restructuring framework is approved. Any such activity does not let the account downgrade. The way things El Niño will pan out in various parts of the country, I think this call will be taken. As of now, as I said, we are not experiencing any visible stress in the agriculture book. Since large part of growth that has happened in the last one or two years, contribution has come from the secured part of gold loans.
Nidhu Saxena: Currently, there is no reason I see for us to worry, but we are closely watching and wherever the SLBC guidelines are going to come, where we have to allow restructuring, we will be proactively implementing those and going forward implement those directions of the state.
[Analyst] (361 Capital): Sure, sir. Thanks a lot for all the answers.
Operator: Thank you. The next question is from the line of Aman Singh Sahaj Singhani from ICICI Securities. Please go ahead.
Aman Singh Sahaj Singhani: Hi, sir. Thank you for the opportunity and congratulations on good set of number. Sir, continuing the last question from the previous participant, as you said, a large part of agri growth is done in the gold loans. Can you give out the agri gold number for the bank?
Nidhu Saxena: Yes. 11,000 actually has grown year-on-year in the agriculture book, which is translating to 34%, out of which I think the number is 10,700, around this. What is the number?
[Company Representative] (Bank of Maharashtra): 18,600.
Nidhu Saxena: This is the outstanding. So growth, if we are saying, agri gold loan INR 6,500 was the number in September 2025, has grown to INR 18,600 in September 2026.
Aman Singh Sahaj Singhani: Okay.
Nidhu Saxena: It is a 12,000 growth which has come in agriculture gold loan year-on-year.
Aman Singh Sahaj Singhani: Right, sir. Also, sir, our retail gold book has declined quarter-on-quarter. Any comment on that?
Nidhu Saxena: If you see the gold loan, there was certain tweak in the Reserve Bank of India guidelines last year, wherein some segment of the gold was subject to conditions going to get qualified as an MSME. Some segment will go into the agri and the non-priority gold loan will be under the retail category. After those guidelines have been introduced, wherever branches have been sourcing or even when the existing gold loan is repaid and the customer requires further extension through a fresh loan, if the customer is eligible for an MSME or for an agri, they are renewed accordingly. Since it is a PSL, even in terms of our pricing strategy, we had kept three prices for these three segment of products. In fact, there was no MSME segmented product as such, but after the RBI guideline, we immediately introduced a new MSME gold loan product.
Nidhu Saxena: Agri will attract the lowest rate. MSME will be priced a little higher, 50 bps or so, and the non-priority will be again, charged the highest. With the pricing strategy, even those who are eligible under retail, they have been availing, and if they are eligible under MSME, if it is a shopkeeper, small trader, and has an Udyam Aadhaar, and he has been availing gold loan facility from the branch, when the renewal comes, he or she has moved from the retail to the MSME book. That is how retail has gone down and lot of movement has happened inter set. They have not customers who have left the bank, but they have moved from retail to other priority sector eligible buckets.
Aman Singh Sahaj Singhani: Sir, can you please give out the MSME gold outstanding book or total gold outstanding book for the quarter? That could be helpful and comparable.
Nidhu Saxena: We will just read out the number.
Aman Singh Sahaj Singhani: Yeah.
Nidhu Saxena: Sure.
Aman Singh Sahaj Singhani: The total gold loan outstanding is INR 33,000 crore and MSME gold loan outstanding is around INR 2,000 crore.
Aman Singh Sahaj Singhani: All right, sir. Thank you so much. Sir, second question, if you can also help me with the number on ECLGS disbursement that we have done on the
Operator: I am sorry to interrupt you, sir. If you have follow-up questions, please rejoin the queue.
Aman Singh Sahaj Singhani: Sure. Thank you.
Operator: Yeah. The next question is from the line of Sushil Choksey from Indus Equity Advisors. Please go ahead.
Sushil Choksey: Congratulations to team Bank of Maharashtra for excellent performance. Sir, to sustain this performance, entire banking system and the globe is transforming. For Viksit Bharat, new businesses are emerging, whether it is EV vehicles, battery manufacturing, data center, GPU financing, logistic plays, multiple plays. How are we shaping up to enhance our visibility on corporate business, even supply chain with multi MSME and various other verticals being in heart of Pune, which is the second-largest engineering center in the country. How is business outlook looking from this point of view, is my basic question.
Nidhu Saxena: Yes, sir. I think thank you, and very interesting, sir. In fact, where the economy is growing, where the country is growing, bank is very closely finding those and marking those as sectors where we are bullish to grow our exposures too. So with the aspiration of a developed nation by 2047, we know that country has to see lot of infra-upgradation. So whether it is ports, airports, roads, these are the sectors where there is an emphasis coming from the government also, and we are also picked up wherever these road projects under the HAM model from the MoRTH or the NHAI. We have extensively funded these projects. We have upped our ticket size also, appetite also, and we have been doing data centers.
Nidhu Saxena: In fact, I would not name the account, but the first of the biggest data center in Navi Mumbai is also funded by us along with NaBFID. So we have been joining hands with these entities, like NaBFID, where we have participated in large transactions also. So within infra, road, power, transmission, renewable energy, I think almost INR 14,000 crore, INR 15,000 crore has been funded in the last three quarters in the renewable energy. And this is where we are seeing that there is a growth emphasis and new opportunities coming in. Support from the government is coming in, and we are also marking these sectors as bullish for us to grow. In fact, my current pipeline, which is almost INR 23,000 crore in this corporate book, we have share of almost 18% from power infra, 12% from the road, 10% from the renewable energy, 10% from the metals and the allied sectors.
Nidhu Saxena: This is where new opportunities are coming, and this is how we are aligning ourselves, participating in the Viksit Bharat vision of the country.
Sushil Choksey: Sir, to sum up your reply, do I assume that you are not averse to a large equity backer and a cash flow-driven new businesses to be supported? Second thing, to achieve the enhanced performance levels, how is Bank of Maharashtra supporting the HR training, digitization, new initiative on digital? The new businesses and emerging growth needs a lot of support for good talent within the bank to understand the businesses.
Nidhu Saxena: Sure. I think very valid point, sir, that you have raised. Bank has to gear up itself for facing the new opportunities. If the skill sets internally will take time to groom and train, then you are able to handle new businesses, or internally any skill sets which are found not present but bank requires, we have gone for massive recruitment also. The idea is the assurance functions, the managing of risk, including the technology risk that we will encounter when we are growing. The IBU bank has been doing for 90 years domestic business, but here we went into a different, I would say, domain. Not a lot of skill sets were there. So we went in for recruiting externally and onboarding the best talent to manage these elements.
Nidhu Saxena: In terms of branch openings, since we are also aggressively opening branches in the potential growth centers of the country to support this massive branch expansion at entry-level positions, we also have been going for large-scale recruitments. If I have to give you a number, 2 years back, we were 13,000 in terms of the employee strength. But for this manning the initial positions, the new branches, now the number is standing at 17,500. I have not been worried about if the cost to income has to go up. It is fine because we need good people, good talent, and the right number to take this growth.
Nidhu Saxena: And as I said, assurance, the regulator comfort with the bank, how we are growing in the IBU or elsewhere in the domestic side, that has to be properly assessed, managed, because a story is sustainable only if it has been done in a very compliant manner. We have gone for a lot of recruitments in these kind of specialized skill sets, treasury, IBU, and IT as well.
Sushil Choksey: If I understand your reply, instead of underwriting large projects, which we can't because of the size of the bank, you have a good understanding with organization like NaBFID, which you indicated an equivalent organization who are underwriting such projects. So your risk is divided and this year you are garnering the business. Am I to understand that?
Nidhu Saxena: Absolutely. Yes, sir. Just to add, sorry. I will just add on that. We have increased our appetite also. We have gone for funding large projects of national importance where we see support coming from the state, from the center, from the World Bank, from entities like NABARD, they are also funding. And where NaBFID is there, and we take the advantage of being the sole commercial banker. When that happens, we are able to manage the entire escrow and cash flows of those projects, which also give me some business on the liability side also. This is how we participate with term lending institutions where we wish to take the entire working capital opportunity and also managing the escrow for that large project where we get some liability side business also for the bank.
Operator: Thank you. The next question is from the line of Sameer Bhise from Dymon Asia. Please go ahead.
Sameer Bhise: Hi. Thank you, and congrats on a strong set of numbers, sir. Just wanted to understand on the treatment of the recovery from written-off assets, which probably is waived by the Maharashtra loan waiver recovery. You indicated that the impact on the interest line is around INR 125 crores. But if I look at the yield on advances, it jumped like 30 basis points on a sequential basis. What explains such a largish improvement in a quarter? Some clarity there would help. Is there any other accounts which were upgraded to standard and that has helped the interest line here? If you could provide some details, that will be helpful.
Nidhu Saxena: Sameer, first of all, debt waiver. There is eligible around INR 3,500 crores of accounts which are eligible. Our estimates and calculations are that out of which government receivable is around INR 2,750 crores. In the above INR 2 lakh category, there is a requirement from farmer to first upfront come and deposit, then the debt waiver amount is passed on to that account. Around INR 260 crore like that. In this entire 3,500 eligible portfolio, tentatively eligible portfolio, we have a haircut of INR 500 crores, as against which our provisions that we are holding is INR 1,700 crores. Actually in practical sense, there is no haircut at all to us because we have already provided this element. Up to 30 September, out of eligible 3,500 and 2,700 government receivable, we have received around INR 1,200 crores, wherein the write-off recovery is INR 422 crores.
Nidhu Saxena: The recovery in the NPA side has been INR 465 crores. Rest has gone to overdue accounts. This is how the break-up is. Around 50% has been concluded, I would say. The rest 50% will be seen in due course. But we are not counting on this because these are not effort of our branches and verticals. We have already a target approach to the written-off book that we are holding. I had just explained a little while ago on that. Through our two targeted schemes of up to INR 1 crore and from INR 1 crore to INR 50 crores, we try to resolve other than NCLT cases in the write-off in a better and a bigger way. Last two years, recovery numbers have been quite encouraging, and this trend we will keep maintaining going forward as well. Any recovery which is coming is adding to the OP number.
Nidhu Saxena: We see this as a big goldmine with us. If we just attend to this in a focused manner, annually INR 1,200 to INR 1,500, INR 1,300 to INR 1,500 is what we have our number in mind, which we will keep doing for the next four to five years, I would say.
Sameer Bhise: Excellent, sir. Appreciate the clarification. Just reconfirming, there is some element from this which has helped the yield uptick. Is that a fair conclusion?
Nidhu Saxena: In terms of NIM, it is 2, 3 bps and 125, it is actually 30 crores, so far what has happened. 125 must be the total calculation, which I shared little while ago.
Sameer Bhise: Yeah.
Nidhu Saxena: Till date, whatever recovery has come, INR 30 crores has gone towards the interest element. We have also one-off 3, 4 bps ITR refund had come. I would say that would have contributed to the NIM. Sameer Bhise, let me tell you the real change is what, which is helping us maintain this kind of NIM above our guidance is our focus on not only growing, but growing profitably. We have now in place a system where we are able to assess the branch level profitability. This is again, an industry-leading example, I would say. In the entire sector, in the banking sector, when the field functionalities are reviewed, the review is limited to the top-line growth. The target is there for only top line.
Nidhu Saxena: But correspondingly, the top-line growth, whether it has translated to corresponding growth in the bottom line, this is always left as a function of the central office or corporate office to look at. But here we have, for the last three quarters, already implemented a system where the branch-level profitability is also part of the review in our meetings. It is not merely that if the branch or the zone has grown their business by, say, 10%, whether the profitability bottom line has also grown correspondingly 10%, 15%, or it is 5%. In terms of how the business that they are sourcing, are they negotiating properly with the clients in terms of what pricing. Every MSME facility, INR 50 lakhs, INR 1 crore, INR 2 crores, whatever, are they able to command a good rate, negotiate a good rate? Then only their top-line growth will help with the bottom line.
Nidhu Saxena: I think this kind of focus that we have brought down to our zonal manager and branch manager, everybody is contributing in the profitability of the bank. I think this is the one. I do not have numbers to actually showcase how this transformational change that we have thought, which is the first of example in the industry. We have taken it to how we give the annual performance rating to the employee. It is how he is doing business and how he is doing profitable business. There is a metric which awards in their annual performance ratings also, some marks, and which has really brought focus to even my branches. When they are doing individual transactions, they are mindful of the profitability part of it. That is bringing the change, I think.
Sameer Bhise: Great, sir. Appreciate. Thank you for the clarification. That is all from my side. Thank you, and all the best.
Operator: Thank you. The next question is from the line of Suraj Das from Sundaram Mutual Fund. Please go ahead.
Suraj Das: Yeah. Hi, sir. Congrats on the quarter. One just data keeping question. Sir, if you can give the SMA 1 and 2 figure, including less than INR 5 crore exposure. I think in the slide you have given 5 and 8 basis point respectively for the SMA 1 and 2, but I think that is only for the INR 5 crore and above. If you can give the figure for the overall bank for this quarter, September, as well as for the June quarter.
Nidhu Saxena: Sir, I have the numbers for September readily. I am just sharing right away. Stress overall is INR 10,750 crores, within which SMA 1 plus 2 is INR 4,500 crores for the bank as a whole. Then above INR 5 crores is, amount must be-
[Company Representative] (Bank of Maharashtra): 432.
[Company Representative] (Bank of Maharashtra): INR 432 crores, sir. Above INR 5 crores is INR 432 crores, which is translating to 0.13%.
Suraj Das: What was the figure, sorry, sir, below INR 5 crore? I missed that. Overall, you said INR 10,750, right?
Nidhu Saxena: Sir, SMA 1 and 2, 1 plus 2 SMA is INR 4,500 crores.
Suraj Das: Okay. Sure.
Nidhu Saxena: Yes. I hope that.
Suraj Das: By any chance, do you have the figure for June quarter also? Or maybe the latest one?
Nidhu Saxena: Sure, one minute.
[Company Representative] (Bank of Maharashtra): Around INR 4,100 crores was the June figure.
Suraj Das: In October, let us say till date or maybe for the first fortnight.
[Company Representative] (Bank of Maharashtra): That is not readily available. We will be providing.
Nidhu Saxena: We will take it and offline provide you. But June and September numbers, sir, we have shared with you. Those were readily available, so we have shared. ECLGS, somebody has asked, I do not know if I can push in this question. So ECLGS, sir, we had done INR 4,493. So almost INR 4,500 crores of ECLGS, within which agriculture was INR 530 crores, major component MSME, INR 3,300 crores. Corporate was INR 577 crores. Sir, if you have any other question, I will take that, please.
Suraj Das: Sure, sir. I think that is all from my side. Maybe for October, I will connect offline. Thank you so much, sir.
Nidhu Saxena: Sure. Thank you.
Operator: Thank you. The next question is from the line of Jai Prakash Mundhra from ICICI Securities. Please go ahead.
Jai Prakash Mundhra: Yeah. Hi. Good evening, sir, and congratulate on a very strong set of numbers. I have a few questions, sir. First is just to connect on ECLGS. You can give agri loan also in ECLGS, right? Will that pertain to, let us say, crop loan also, or what kind of agri loan will qualify for ECLGS?
Nidhu Saxena: It is-
[Company Representative] (Bank of Maharashtra): It is agri business loan, where they are also under the processing and they are having the URN registration. That is classified as under the agriculture as per the PSL classification.
Jai Prakash Mundhra: Okay. They have URNs, so anyway they are MSME, right? But they are in agri, so they are agri also.
[Company Representative] (Bank of Maharashtra): Yes.
Jai Prakash Mundhra: Okay. Sure. Sir-
Nidhu Saxena: Jai ji, processing. Yes. Please go ahead.
Jai Prakash Mundhra: No, no. You please complete, sir.
Nidhu Saxena: No, no, it is okay. I think what my vertical head has explained, the processing unit is the example he has given. I hope that clarifies.
Jai Prakash Mundhra: Right. Yes, yes. Sir, secondly, on yield on advances, I think Sameer also asked. But, sir, the question is that in this quarter, we had around INR 24,000, INR 25,000 crore of QoQ increase in the loan growth, right? Of which around INR 10,000 crore is IBU-led. And I believe IBU yield will be much lower than the bank domestic yield. And still, the overall yields have actually increased. So there seems to be some extra element which is pushing the yield up because the loan mix is actually favoring IBU, which has lower yield. So what is the disconnect, sir?
Nidhu Saxena: Jai ji, the global yield has been 8.86, and the domestic was 9.02. I mentioned a little bit about this branch-level profitability, which is an industry-leading thing. What we had done very consciously, we had lot of entities, state PSUs where, of course, it was MCLR-linked, but very fine rate was continuing. We identified all these facilities which were running into several thousand crores, and we had gone with increasing the pricing in that. The ROI was changed. I will not like to name the entities, but this was very consciously done before the quarter. It was done actually in Q1 as a very conscious exercise in several accounts. Even if in a INR 2,000, INR 3,000 crores, 25 bps I am increasing, the worst-case scenario, we were thinking that probably a central NBFC will pay off my dues, but it did not happen.
Nidhu Saxena: Because we are able to see that market is like that, and the cost is actually going up for them also. We didn't see any of that element, but we're prepared to do that because we found that the pricing is too fine for now. Very consciously, we did this in several accounts. This also has contributed. These were all MCLR-linked. I don't have the exact calculation to showcase, but this was again one, two, three things which were contributing in the high NIM improvement, 12 bps that has happened for us.
Jai Prakash Mundhra: Right. Sir, yield on advances global is 8.86. What is the IBU yield? A rough number will also help. Is it below 6 or is it reasonably similar to global yield on advances?
Nidhu Saxena: I will have to seek some time for you to revert back. The IBU is not linked on this. I will get the number and offline maybe share with you.
Jai Prakash Mundhra: Sure. Secondly, sir, on Maharashtra debt waiver recovery. I heard you that out of INR 2,700 crore receivable, so far as of September, we have received only INR 1,200, right? Still around INR 1,500 crore worth of claims are yet to be received, right? Is that the understanding correct?
Nidhu Saxena: Jai ji, you are right. Those are the correct estimated numbers that we are having. But for those accounts which have concluded, we can say anything for sure. But those which are forming now INR 1,500, there is always a process which the state will entail.
Jai Prakash Mundhra: Right.
Nidhu Saxena: They will keep refining the list. The accounts have to be cleansed, and sometimes the eligibility criteria undergo some changes. We are not sure on that. But I can tell you, on 1 October itself, we received more INR 115 crore. We have already received.
Jai Prakash Mundhra: Okay.
Nidhu Saxena: Already received. So out of that INR 1,500 that we are just discussing, on 1 October, INR 115 crore is received by the bank. Because there is a process of cleansing accounts, lists are shared, data is uploaded, then sometimes the approval process takes its own time. The availability of funds also sometimes is seen by the state, when they will give. These are the issues which are beyond our control, so we do not rely much on what is happening. Yes, this is the eligible portfolio. That is rough estimation number we are having, but we keep doing our own efforts and just do not rely on what. But yes, anything which is coming with kind of provisioning that we are holding. For this FY, I think we will see some extra outcome, extra recovery in the write-off book also, and the overall recovery also out of this debt waiver event.
Jai Prakash Mundhra: Correct. Sure. Sir, is there any timeline from government that let us say the rest should come in this financial year, or it could at least spill to next financial year, or it can be even after that also?
Nidhu Saxena: 31 March 2027 is what they have indicated in the SLBC, sir.
Jai Prakash Mundhra: Okay, sure. For the second and final tranche, right?
Nidhu Saxena: Yes, sir. It may come in several tranches.
Jai Prakash Mundhra: Yes
Nidhu Saxena: but this is how the data is given. So far, SLBC, this data is shared there.
Jai Prakash Mundhra: Right. Sir, on your ECL comment, you have said that we now INR 2,500 crore assessment is broadly unchanged. It can actually revise downwards, but as of now, we are holding on to that. You said that you hold 2.5 plus 5 billion. I think we also had some other provision by West Asia crisis, or you can label it something, anything which is not NPA, or contingent provision. Sir, how much is the total outstanding contingent provision, which including West Asia or COVID or ECL?
Nidhu Saxena: So West Asia is what global, we had nomenclature given was that.
Jai Prakash Mundhra: Global uncertainty.
Nidhu Saxena: Global uncertainties is what the nomenclature and we had provisioned INR 200. So putting all these together, it should be somewhere INR 1,600 to INR 1,800 crores that we are still holding surplus provisions.
Jai Prakash Mundhra: Right. You can actually use those towards ECL transition, right? Is that a reasonable understanding?
Nidhu Saxena: Yes, Jai ji, you are right. We can always do that.
Jai Prakash Mundhra: Right. Understood. Last question, sir. On this ongoing drought thing, you are the SLBC lead, right, in this state? What I am trying to understand is, there have been several districts which have been marked as drought affected, et cetera. I believe the economic activity, especially in agri side, would have come down for sure, right? Is there any, let us say, lower recovery or what is happening? When can we see the restructuring? When can SLBC pass the restructuring or natural calamity restructuring?
Nidhu Saxena: Jai ji, just permit me, the SLBC head.
Jai Prakash Mundhra: Sure
Nidhu Saxena: He participates and heads. So he is with me in the group.
Jai Prakash Mundhra: Sure.
Nidhu Saxena: He is listening to all your queries. I am just handing over the mic to him and he will explain granularly also.
[Company Representative] (Bank of Maharashtra): Good evening, sir. As you know, special SLBC has already been convened, wherein it has been decided by the committee that where trigger one, means where crop loss is up to 33% and crop loss above up to 50%, where the crop loss is up to 33%, banks are advised to restructure giving one year moratorium and repayment period up to three years. For a crop loss more than 50%, it is going to be a total repayment period of five year, including one year moratorium. Already a communication has been sent to all the banks and who will be coming for restructuring, the farmers, they will be getting restructuring under this.
Jai Prakash Mundhra: Understood. So sir, the scheme is final, right? It has gone out to all banks.
[Company Representative] (Bank of Maharashtra): Yeah.
Jai Prakash Mundhra: Is there any deadline, sir? So let's say by December, whoever wants to restructure, they should come forward or this is an on-tap window.
[Company Representative] (Bank of Maharashtra): As far as timeline is concerned, declaration has a timeline. But as far as applying by the farmer, it is up to February.
Jai Prakash Mundhra: Up to February 2027.
Nidhu Saxena: Yes, sir. Past experience is that, generally 10% to 15% tend to avail this kind of restructuring. That is not much because our past experience is like that, 10% to 15% cover and that require 5% provisioning.
Jai Prakash Mundhra: Right
Nidhu Saxena: not impact much.
Jai Prakash Mundhra: Right. Sir, apart from crop loan, does this scheme also pertain to, let us say, other normal businesses, MSME who are in the drought affected district or they are not part of this scheme or they may have a separate scheme?
[Company Representative] (Bank of Maharashtra): This scheme is only for the agriculture-related, whether it is a term loan or crop loan, for that it is.
Jai Prakash Mundhra: Okay.
[Company Representative] (Bank of Maharashtra): Directly.
Jai Prakash Mundhra: Right. Your assessment says that—
Operator: I am sorry to interrupt you, sir, but that was the last question.
Jai Prakash Mundhra: No.
Operator: Yeah.
Jai Prakash Mundhra: Sorry. Should I continue or? Okay.
Nidhu Saxena: Yes, sir. Please, Jai ji, you can finish your question, please.
Jai Prakash Mundhra: Yeah, and also, sir, I just wanted to know, what is the crop loan? The total crop loan, if I see, for the bank itself is around INR 20,000 crore, right? Farm credit is the crop loan, right? That is the outer limit. I am trying to understand what could be the, even if you believe, 15% restructuring were to happen, how much could that be the quantum? So out of INR 44,000 crore of agri loan, INR 20,000 is farm credit, right? Roughly.
[Company Representative] (Bank of Maharashtra): Sir, yes, sir.
Jai Prakash Mundhra: Yeah.
[Company Representative] (Bank of Maharashtra): Yeah. Farm credit is also having a majority portion is also in the form of gold loan.
Jai Prakash Mundhra: Oh, okay.
[Company Representative] (Bank of Maharashtra): Exactly, I will have not any amount, but it will not much amount will be there.
Jai Prakash Mundhra: Okay.
[Company Representative] (Bank of Maharashtra): productions credit, that will be not much amount.
Jai Prakash Mundhra: Right. I think, sir, this is reasonably clear. Thank you so much, sir. Thank you so much for your time.
Operator: Thank you. That was the last question for today. I now hand the conference over to the management for closing comments.
Nidhu Saxena: I think, we keep seeking, coming back to you, analysts and the investors community, with guidance numbers, promises that management has to be adhering to religiously. We keep delivering on what guidance numbers and whatever we have been sharing. We will keep seeking your support going forward. Thank you so much for sparing time to participate in this investor conference. Thank you.
Operator: On behalf of Systematix Group, that concludes this conference. Thank you for joining us and you may now disconnect your line.
