Thank you very much. We will now begin the question-and-answer session. We have a first question from the line of Sushil Choksey from Indus Equity Advisors. Please go ahead.

Sir, I 'm looking for a little guidance on Q4 and next one year specifically from ROA , ROE advance. You may not speak much on advance, but direction towards your retail book, specifically your home loan book which is growing on a quarter-on-quarter basis, but based on your CASA the traction can be much higher, any view on that?

Sir, as far as next year guidance is concerned let us reach the March quarter then definitely we will be giving you the next year guidance also the way we have given earlier and then you also appreciate that whatever the guidance we give t hat is on dot we are reaching to the target numbers. Having said that regarding CASA and then improving the retail book that is on our cards and then the way we have projected our March „24 balance sheet we are on the right track. We will be reaching the figures w hat we have envisaged a nd then we also agree there is a scope for further improvement and then our digital platform which is now coming up that is going to help us in a larger way, b ut what I told earlier in our quarter t hat in this January, February, some of the products we will be rolling out that will be much more helpful in accelerating our business on the retail front.

Sir, the digital wh ich you mentioned can you elaborate a bit what you mean by digital at our Bank?

Digital what the Cent Neo project what we have taken up already almost 12 to 13 months work has gone under and then now products we will be releasing one by one on the retail side that is end-to-end STP journeys and a lot of algorithms that were built up in the back office where we can extend the loans seamlessly on the digital fron t for the customer that is the l arger picture I'm giving on that.

So, it's like a arm within our Bank which we do all the digital prod ucts for the Bank itself, right?

Yes.

And what kind of CAPEX are we doing for this?

CAPEX we have allocated almost Rs 860 crores for our digital projects.

And what kind of recruitment would you have done specifically for this vertical sir?

Almost we have taken around 110 IT guys, and we are placing them in a separate premises rather than in our IT headquarters. There is a separate building we have taken for this transformation project and they are all working and then lot of products we have planned a nd one by one we will be rolling out now the same.

Does t his mean that the digital initiative is purely for retail bus iness or it is for wholesale Bank?

No, it is for the entire wholesale Bank. Our concept is to bring the DG Bank w ithin the Bank that is the Cent Neo, and we will be catering to th e needs of the digital initiative not only on the retail front or liabilities or the asset side for retail but also for the corporate tha t we will be evolving in phases now.

No, in corporate we have sanctioned a line of almost Rs 18,000 crores, but we are spacing it out because our guidance to the market is we will be maintaining 65 %-35% balance with plus or minus 5%. So, I know very well what type of corporate assets that is coming back and what type of assets I have to pic k up based on the risk weights what I would like to pick up. So, though I have larger unutilized limits, we are very selective in releasing the limits.

Sir, I can sense that the Bank has done a good job on AAA and AA rated accounts and 86% of your book comprises of the top-notch customers. I am sure you're doing sustainable and a very good business from a 5-10 year Outlook. Sir, similar way if I have to achieve that in detail, how far are we from current quart er will it take two quarters, five quarters to Central Bank to be visible on that business front?

Actually, only now we have to accelerate on visibility part not to build up our book that is on right track and the targets what we have we are ach ieving the percentage of growth that is als o we are doing the way we have planned, bu t for the larger public we have to accelerate on the publicity that's all.

Sir, any guidance for FY24 the current quarter on ROE and ROA?

Already we have given for ROA is 0.75% and then ROE I am not having here in this.

I will ask my last question to Mr. Wahi he has been quite accurate in guiding about treasury business and what's his outlook based on all the noises which is being made in global market and domestic and various speeches of RBI governor?

See i n line with our expectations 10-year yield faced some resistance at 7 .12%. So, it has bounced back twice from 7.1% to now it is 7.19% sort of numbers and on the higher side it has touched around 7.35%. So, our guidance continues to be that it should strengthen if not in Q4 of this year, but Q1 of next year it should really break away the existence of 7.12%. So, of course noise is there. The Governor said in Davos that rate cut is not at all on the table. So, we are also of the view that at least up to September we are not seeing any rate cut, but the yield should soften after June 24. So, that is expected, and we are prepared for that and actually this is the time to build some duration also.

Sir, I will just repeat the question, sorry about that. How do you see the cost of funds despite our CASA at 49% which is very sustainable , and which is non metro as I see it over a number of years. So, we've done a much better job than 99% of our banks in India of sustaining CASA and that also not from Metro Tier-1 Tier-2. So, how do you see our cost of funds before we see what RBI enables in the system and how do we see our pricing pattern on MCLR over a period of next one year?

Cost of fund right now is only 4.83% and we don‟t expect this will shoot up now. CASA remains very robust so now volatility in the rates also is not there. So, more or less Choksey ji we don‟t foresee any further substantial inc rease in the cost of funds and CASA percentage since we are able to maintain almost maintain our share at 49% in this particular quarter, also we have already launched a CASA campaign. So, we intend that we should go back to our CASA share of around 50% in case the cost of fund will remain the same. MCLR also won‟t change much because it is also dependent upon the deposit rates. So, only 5 bps here and there maybe there.

Thank you. We'll take our next question from the line of Rushil Dedhia from Antique Stock Broking. Please go ahead.

Sir, my question is on the yield on investment declined sharply by 15 bps quarter-on-quarter, so what would be the reason for that?

See if you yield the investment for our quarter ending September „23 was 6.55% and if you include the yield on investment including our profit it was 6 .73%. So, now it is 6 .75%. So, it has not gone down. In fact, it has marginally increased yield on investment.

And sir yield on advances so that was q uite strong quarter-on-quarter 32 bps, so can you throw some color on that and what percentage of the loan book is still due for repricing?

Let me give you the figure almost 5 1.06% of our loan book at Rs 1,14,356 crores is on RBLR. So, there what happens the 100% rate transmission would take place. 31.90% of my loan book at Rs 71,429 Crore is on MCLR w here as and when the reset becomes due then the rate of interest gets changed. However, since there has been no increase in the repo rate in t he last two monetary policies. So, there will not be any su bstantial increase or anything i n the normal course whatever loans come for reset there the rate will increase because MCLR has increased by 5 bps.

My question was regarding the expa nsion of yield on the advances front, s o you were just giving the idea for the repricing of the loan book?

So, as I told you 51.06% of our loan book is on RB LR where th e rate transmission would happen as and when the repo rate increases so that has already happened. 31.90% of our book is on MCLR. So, where periodically if it is a one-year MCLR so then after a period of one year the accounts will come for reset of interest. So, the recent change in MCLR is only by 5 bps. So, not much of impact on account of reset, it is a regular phenomenon. The MCLR based accounts would come for reset at the time of their review or reset.

So, sir next question is on the co -lending side there has been a drop in the loan sanction in the retail segment. So, can you throw some light what would be the reason for this and have you tightened some filters in the retail segment?

There is no such specific reason we will go into the details because our target what we have given to the departme nt was Rs 10,000 crores for December 2023 probably since they have reached Rs 9,575 Crore as such on co-lending side we have no major issues.

Thank you. We have a next questio n from the line of Sarvesh Mutha from Antique stock Broking. Please go ahead.

So, my question is on the special mention accounts, though there is some gradual improvement on quarter-on-quarter, year-on-year basis, but still we are r unning a very high level of SMA book as compared to him, so your thoughts on this?

See in our disclosure we have given entire SMA book. We are not restricting only above 5 crores that is number one an d we are including below 5 crores t hat is all the accounts that is SMA 0, 1 and 2 that is the figure what we are giving. If you want to guess the actual quality you can go to the slippages part that gives the actual grip what i s there on the collection side. So, SMA -0 that is a normal phenomenon, a lot of amounts will come and move back, r ollback to the standard category and then SMA-1 and 2 that we have some restructured book numbers also we have given in the earlier one. These are all the things in a normal way we are handling it is not having muc h concern or much stress in this. There is only some temporary cash flow mismatches do happen here.

And sir on provision coverage ratio we are at 93.7%, do you think we have reached a peak PCR ratio or you still intend to make further provisions?

See basically despite this 93.73% the net NPA ratio is still at 1.27 %. So, we intend to bring it below one possibly in the next quarter. So , for that we need to continue making additional provisions. So, in that case the PCR will furthe r improve, and it will reach the level of around 94%- 95%.

And sir on question on shareholding so promoter shareholding is more than 90% any thoughts on that l ike you're seeing other PSU banks reduci ng their promoter shareholding, w hat's your view on that?

Thank you. The next q uestion is from the line of Amit Mishra from Indus Equity Advi sors. Please go ahead.

Sir my first question is on our standard restructured book, s o if I see it has increased from last quarter specifically in MSME segment and retail segment. So, can you talk about that?

See, these are all the accounts pertaining to Manipur s tate where there was a disruption and because of which the branches were closed the overall activity suffered and so these accounts were permitted to be restru ctured. So , those a ccounts have been restructured o ther than that there is no much addition in any other restructured accounts.

So, we have taken full amount in this quarter, or we have deferred it?

It is the existing account full amount.

So, whole impact is because of Manipur?

Right.

Sir next question is on fee-based income so if I see we have done really good on that basis on fee based income, but if I see your LC BG commission fees is drastically low as compared to historically, so a ny specific reason why that was very low on rest of the param eters we have done really great?

LC/BG commission basically if you will see was Rs 63 crore in December 2022 which has come down to Rs 43 crores in December 2023. What we have done is we want to improve this LC/ BG commissions and for that what we are doing now is that we have c entralized the FOREX operations. And we have centralized the operations at hea d office level from there we will be monitoring the issuance of BGs and LCs and other things because many times what happens these customers if they go to branches they may not know the intricacies. So, with the centralization of FOREX operations we expect that we will be substantially able to improve the commission.

And added to that another main reason was we were only asking our corporate s to use their fund-based facilities rather than non-funds because many of these are good, rated accounts & their commissions are at rock bottom. So, instead of making them avail LC BG we are asking them to use the fund based by converting them and then offering the lower rate of interest that‟s how some of the accounts we have traded off.

PSLC we don‟t intend doing because we did the PSLC sale in the first quarter only and the income is coming as amortization out of that PSLC and other incom e majority is out of recovery in written off accounts.

PSLC we don‟t intend to really have any number in this quarter.

Sir, my last question is you mentioned new digital team, so what is the total cost you are expecting on this new department?

See there are lot of projects that are running under this transformation project per se whether it is on the digital lending platform or integrated customer share on the collection management system or our mobile banking, omni-channel and then internet banking revamping. So, a lot of supply chain financing, wealth management modules. There are so many things that are running in this mega project. So, overall, Rs 860 crores is the envisaged budget that is for 5 years‟ time.

Thank you. We have a question from the line of Sushil Choksey from Indus Equity Advisors. Please go ahead.

Sir, you just replied to the previous speaker based on all the technology initiatives which you had mentioned to me as well as the previous participant, can a cost of income and cross selling lead to the current number towards 50% in a year's time or it will take two years‟ time?

CASA number or cost-to-income what you are asking?

Cost-to-income? I am sure that you will make lot of income out of cross sell as well as digital initiatives, but will our cost-to-income show a sign towards 50%?

Definitely sir it will because see investment has happened, the expenses are being booked as we put to use some of these assets however the business will start coming in the times to come. So, thereby reducing the cost-to-income ratio definitely.

Sir, you highlighted about OFS and you have sort the permission, so I understand that based on the current performance profits which we are retaining and expected profit in next 12 months on the current borrowin g program in CD ratio you don‟t need any further dilution or equity to raise which may happened in the market, but you are asking government to reduce that‟s a brilliant move, sir can you speak little further not getting a angle of OFS whether granted or not granted your thoughts on the process?

We are little bit confident on this issue regarding the OFS otherwise there is no point i n diluting further where actually my capital position is very strong and then my liquidity I am adequate liquidity we are maintaining and the credit growth what we are envisaging for the next year and the capital positions will be adequate for me without g oing into the market whether through the rights or QIP issue. Instead of diluting the equity first we would like to see that float in the market has to improve for that this is one way what we are exploring so that there won‟t be any dilution on the EPS and at the same time we would like to see how the float in the market will help to move us.

And secondly sir I saw piece in today‟ s business paper about some interest which you have shown in COC on insurance vertical business and which you ha ve commented that you have participated, can you say anything about it?

Right at this moment I can tell you that we have submitted our expression of interest.

It would be a brilliant move sir if we are lucky about it because I t hink with CASA at 49 and cross sell Bank can do wonders.

Thank you.

Thank you. I would now like to hand the conference over to Mr. Raju Barnawal for the closing comments. Over to you.

Thank you sir for giving us this opportunity to host the call. I will hand it over to you for your closing remarks.

Thank you very much for all the particip ants for investing their time a nd then let me assure you from our side that we will c ontinue to achieve the numbers w hat we have given to the market and going forward the way Bank is moving and then the opportunities that will be emerging that Bank will do well a nd then whatever the issues that were there, that is the cost for the Bank and we are on the growth path. Thank you.

Thank you, Sir. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.