Congratulations. So basically, I had a couple of questions, but I'll start with Sudipta's comments on unsecured loans. First of all, thank you for making those comments upfront because there's a lot of confusion. But in your experience, because you have a very rich experience in unsecured retail and in risk, in your experience, do you think that the risk in the small ticket segment can easily spill over to the large ticket segment? Or they are -- they have to be viewed as two completely different segments? And does that then impact other unsecured segments like MFI as well? So that's my first question, and then I have earnings-related questions.

Yes. So, to answer your question on the rural segment first, they're not exactly consumption loans, they're rural business finance loans. So, in that way, they are of a different category. And the collections discipline and the lending disciplines on that business are markedly different from the urban personal loans. And frankly, I do not believe that the risk from the small ticket personal loans that we are seeing, which are mostly fintech in nature are actually the same quality of loans that are done by t he large established financial services players because in addition to the sort of the digital underwriting and acquisition models, there's a deep experience that the large organizations have, which actually help us to sort of sift out the risky customers from those that are non-risky. So, to answer your question, I really do not see any contagion risk from the small ticket personal loans to the larger sort of personal loans category or the prime category. And that -- and I have looked at the risk numbers, that the risk numbers on that p articular segment remains quite stable across the financial services players, the larger financial services players.

Okay. That's very, very helpful. The other two questions are that, of course, the presentation is very detailed, if you could just highlight the value of SR, security receipts?

I will take that. So, Mahrukh, last time, we had said that SRs were about Rs. 6,500 crores. With the overall value of the loans, which we have sold was about -- original POS was about Rs. 13,000 crores. So that was the kind of safety we had. Okay? So same thing, SR stood at -- net asset value of SRs will be around Rs. 8,000 crores with total loans, the POS will be upwards of Rs. 16,000 crores. So, two things that I would like to highlight here: • Number one, on entire basis, even if you take SRs plus loans, etc ., we have shown a reduction of close to Rs. 9,000 crores, between Rs. 8,500 crores to Rs. 9,000 crores from the beginning of the year to now. So, we can even see the overall. • Second, because of these deep discounts on SRs over the original value, you would see that over the last several quarters, the reduction in the value of SR, revaluation, has been very limited. I always say that this Rs. 25 crores- Rs. 30 crores per quarter, Rs. 150 crores to Rs. 200 crores per year is what I always say will be the cost coming both from SRs as well as some reversal of interest that we take on the Infra loans according to IndAS. So, no negative surprises waiting there. • Third, for the first time, we have actually told on the call that the -- by the way, Net Stage 3 (NS3) on the book, you know that is just about Rs. 175 crores. The Net Stage 2 (NS2), as Sudipta said, is just about Rs. 500 crores on the book also. So, if we put all this together, that gives us confidence that there are absolutely no negative surprises coming from either the book or from SRs. What you need to take in your model is about Rs. 150 crores to Rs. 200 crores negative on the P&L from wholesale book and model accordingly.

Moderator

The next question is from the line of Viral Shah from IIFL Securities.

Congrats on good set of numbers. Actually, I had a few questions. So probably maybe I'll come back into the queue later on, if they are too much -- too many. So let me start with, first of all, the other income and the fee income growth that was there in this quarter. So right now, you are now at almost 12.5% NIMs+Fees. What's, first of all, the sustainable level going ahead? And was there any one -off in the other income in this quarter? Let me start by first this.

So one-off, I can't call it one-off, but there was fees that we had to receive from our partners, insurance partners, which was due over the last 2-3 quarters, but came this quarter was just about Rs. 25 crores to Rs. 30 crores. So, I don't think that is one -off. These things keep happening. Quarterly fees don't come every quarter, but that's about it. There were no major one-offs other than that coming. But since you asked this question, I would like to point out that another Rs. 25 - 30 crores in addition to business-as-usual came from there -- why I'm not ready to call it one -off is because further quarters also some past dues will keep coming, okay? As far as the trend is concerned. NIMs+Fees Retail, I have been always been guiding around -- I was initially guiding 11.5%, I changed my guidance to 11.7%. I was also surprised at 12. 16%. We have done very, very well this time. As I said in my comments, it comes from two things: • Number one is cost of funds. That is an item which may go up by maybe 20-odd basis points in H2. There is no question about that. We have managed our treasury very well based on locking certain long-term, medium- term loans. I mean I can tell you that when treasury was looking at locking them, I was asking them so many questions. And today, we are laughing all the way to the bank, having locked some real long-term rates over the last one year. That is one. • Second, our especially Farm portfolio, to some extent, Two wheeler and the Micro Loans portfolio enables our treasury to borrow PSL and even more importantly, PTC, which really keeps the cost of funds in control. So even if we see major hardening -- not major, but 25 to 30 basis points hardening, further hardening in bond yields, by the way bond yields, as you know, are already hardened. Even if you say further hardening, we will keep our cost of funds in -- it will go up, but it will be in control. • Secondly, as I pointed out, CP percentage, if you see, it's just about 6%. Now this 6% to 9% was good when our wholesale was 30%-40%. Now with wholesale down to 12%, there is scope to increase it, at this point of time, it doesn't make much sense since the spread between CP and long term is not that much. But that is temporary. We can always -- when the CP rates come down, we can always use them to increase it even slightly to 9%-10%, it will work well. So, this is as far as cost of funds is concerned. As far as yields are concerned, let me clarify that it has not come out of a major increase in yields, etc. Competition doesn't allow that. It has come out of a little bit shift in portfolio, more towards retail, and especially within retail also towards rural. So that's clear. As far as what is sustainable, I would be perhaps foolish to say that this 12.2%, we will sustain and increase from here. But I don't see it falling much more than 12%. It will be in high -- very high 11% to 12% over the next couple of quarters. That's, I think, as accurate as I can go . We have done lots of modelling. It's a conservative number that I'm giving.

Fair enough. And thank you for this detailed answer. The second is in terms of the credit cost. So over here, as you mentioned, while NIMs are benefiting from the changing book mix, not just from wholesale to retail, but even within retail, the mix is changing towards more of MFI, Two wheeler and Personal Loans. And if I look at the collection efficiencies across your Tractor, Two wheeler or Personal Loans, they are now trending 30 to 100 basis points down on a YoY basis. So, I believe there won't be any seasonality into this. Now in this scenario, what gives you the confidence that your credit costs can further go down on the BAU basis? I'm not talking about whatever extra provisions you may be holding, but on a sustainable basis.

100 basis points on a YoY basis, which product, I don't know -- #1 clarification. You called our Rural Business Finance, MFI. I would like to clarify it is no longer that. In fact, we give the breakup and a very small percentage of what we do is now Microfinance. Microfinance is defined as less than Rs. 3 lakhs income, and that's less than 10% of our customers. So, 90% of our customers are above Rs. 3 lakhs income. Close to 15% of our customers -- rural customers are above Rs. 10 lakhs income and which is giving us the confidence that even the increased percentage of Rural Business Finance is quite safe. As you would see, we have maintained the collection efficiencies. I hope you are not making an issue in the colors. Collection efficiency of Rural Business Finance is absolutely steady at 99.8%.

So not in Rural Business Finance…

Yes, yes. I'm coming, I'm coming, one by one, okay? As far as Farmer Finance is concerned, yes, there is a small reduction to 91.6% compared to 91.9%. We have not seen any worrying factor there. This may be just last couple of months, certain small issues coming up. We expect these things to improve quite a bit in the third quarter already. Okay? One place where there is a reduction about -- 100 basis point reduction in -- is you can see in Personal Loans. Now two things have happened here. And the last time, last year, this Personal Loan book was just about Rs. 2,000 crores, and now it is Rs. 6,000 crores. So, it is, the percentage, to some extent, is just the book being large, more mature, etc., one. Secondly, as you would also see, we have reduced our rate of acquisition of new personal loans quite a bit. In fact, this is down quarter -on-quarter. For us to change and put in place many journeys, especially underwriting journeys. And once this area is c omplete, from Q4 onwards, we will start growing. In fact, Q3, we will be, again, on this slow trajectory. So, a little bit of denominator effect. Sudipta, would you like to add to that?

Yes. So, what I would like to add is that though there might be a slight quarterly fluctuation in terms of the overall risk numbers, but on an overall basis, the sort of the new improved sort of risk framework that we are putting in place will smoothen out all these sorts of kinks in the future, and we expect to deliver a stable risk regime going quarter-on-quarter going forward. So, I wouldn't read too much into this sort of as DD said, the base effect was very small. So, as we are speaking, we are working on -- and this is not only in the personal loans business, this is in all our business lines. We are strengthening the framework so that even as acquisitions go up, the risk trajectory remains stable. Last but not the least, Two wheeler. Yes, Two wheeler, we are at 97.9% as we speak now. And very, very important couple of facts, which wherein Sudipta's speech is, one, a big move is happening towards prime customers towards prime Two wheelers, the prime Two wheeler volume had some number of...

Yes. So, if you see the prime Two wheeler volume, it has gone up to 52% as of now in Q2FY24. So, it is a part of a concerted strategy where we have observed that Two wheelers above a particular ticket threshold size deliver significantly lower risk numbers then. So, the organization as a whole is pushing towards that. EVs sort of exhibit 1/3rd risk numbers of ICE engine vehicles. So as an organization, we are making a shift towards broadening those funnels and bringing more such customers in, right? Obviously, you will not see the impact of such actions immediately. But over the next couple of quarters, you will see those strategies come up in terms of risk numbers and collection efficiencies.

Does that answer your question?

Yes, it does. And again, thank you for the detailed answer.

It is important because there are so many factors which come in finally to that credit cost, right? And I would also say that importantly, you would have observed that this credit cost number, the lower credit cost number is without utilizing even 1 rupee from macro prudential provision. So that remains...

So, does this still mean that even from this level, your credit cost can further come down – generally?

Most definitely.

Okay. Fair enough. I had another question, a follow -up on what Sudipta had mentioned in terms of strategy of cross-selling and top-ups.

Go ahead.

Yes. So over there, that is what the strategy going ahead you are referring to. But when I see in terms of the personal loan disbursements, nearly 40% of those are being sourced from the e -aggregator platforms. So, can you give us more colo ur on what are those kind of loans, the character of those borrowers, average ticket size, how do they differ? And how does this stand with our strategy of doing more of cross-sell to existing customers?

Sure. So, I will give the second part of the question to Sudipta. But first, see, when it moved from last year to this year, we started e-aggregator last year. So, we started this product, as I was always saying, only as a loyalty product. So, it was 100% loyalty, naturally. And now we are moving to more sources. So those percentages will obviously go up. The overall characteristics remain absolutely the same. We don't do new -to-credit customers. We don't do less than Rs. 50,000 loans. That remains absolutely same whether it is -- obviously, loyalty cannot be new-to-credit because they are our customers. Bu t as we acquire from outside, we d on't do a single new -to- credit customer as far as personal loan is concerned. As far as exactly how e-aggregator, what type, what are the credit engines and how we are improving them? I will ask Sudipta to elaborate. In fact, Sudipta, why don't you take a little bit more time to say how we're improving the credit....

So, one of the things what we want to do -- and thanks for the question, is that our average personal loans ticket size now is about Rs. 1.7 lakhs, right? Now we are focusing as an organization on -- now on making sure that a large amount of the throughput of the customers that we get from the digital channels is primarily salaried. So that is our first focus. The second focus is that we do not want, as DD said, we do not want any customer which -- who does not have a footprint on the bureau or which someone else has not seen in terms of their engagement. Now obviously, that would entail working with some e -commerce players and some e -aggregators and making sure that their credit engines have seen that customer for some time, build a transaction score or risk behaviour for that customer, sort of validated it through us, maybe through our data room exercise and then sort of given our offer to the customers. So, the focus, as we sort of build the acquisition engine for this business, it is very important that we are operating on two axes: • the first axis is to give the right-size loan to the right customers. • And the second thing is while we are doing that, make sure that the credit administration process is further sort of strengthened by not only looking at the bureau data, make sure that we are able to -- whenever the customers give us access to -- give us an account aggregator pulls, sometimes we are able to sort of analyse the bank statements with a far more degree of clarity. And last but not the least, get the behavioural signals from whichever e -commerce player or whichever e - aggregator that we are pulling it from. Then making sure that as I told in my initial comments, that moving from a single axis underwriting to a multi-axis underwriting. This model will obviously take some time to mature. And so, we will grow this gradually. There is no hurry. And as DD said, you have noticed that we have sort of plateaued the acceleration rate of our personal loans business, while we put this new tool in place and sort of slowly gain experience in this new tool. So, you will see a gradual increase in disbursement in this business while trying to keep credit cost flat.

So, two things I will add: • Number one is, Sudipta has done it for his living for all these years. And we will obviously draw from that. • Second, there was a -- last time, there were questions about yields based on -- as we move to prime. So, what we will do through this is it will enable us to do more risk -based pricing. So, this kind of underwriting, multi-axis underwriting not only helps taking better credit decisions, but it also helps risk -based pricing. Now that we hope to steer the portfolio more and more towards prime with that, which will reduce absolute yields perhaps, but we'll definitely make sure that risk -adjusted ROAs are superior. So basically, delta yield will be less than the delta collection cost plus delta credit cost. So that's clearly in the model as we move ahead....

Thank you so much. I think you even answered the other question that I had in terms of what changes are you making. So that's it from my side.

Moderator

We take the next question from the line of Shweta from Elara.

Congratulations for the quarter as well as the comprehensive presentation. So, I remember you always used to mention about market share across products. So, if you can just do that this quarter as well? And also, while we say that the growth on the retail side will converge for the whole overall loan growth ahead. So how do you see the momentum now in say FY25-FY26? That's from my side. Okay. The second one, I don't know how to answer. I can only say that we expect those kind of growth rates to continue. Whether we will be at 33% -34%, I don't know, but we have stated always that we will keep the growth rate above 25%. And all this, we put in place for that. And at the same time, as I say, seasonality, cyclicality is a fact of life. So, I'm not saying anything quarter -on-quarter. Generally, for the 4 -5 years going ahead, various factors, like broadening customer funnel, using our database, which is increasing now every quarter, mor e efficiently, movement towards prime, we believe and then last but not the least, which we didn't talk about because it is too premature is launching new contiguous products. What do we mean by contiguous products is products, which our existing customer segments use. We will not go suddenly looking for new customer segments, but our existing customer segments as they need more and more products, we will look at launching them as we go ahead. So that growth doesn't seem to be -- or especially the CAGR over the next 4 to 5 years. I mean we are not clairvoyant to say -- okay, how the fourth quarter will be, how the first quarter next year will be. But generally, CAGR is likely to remain healthy. Most important part is to do this while making sure that productivity goes up and credit cost comes down. And the entire concentration is going to be on that. So that ROAs keep going up, keep moving up to by -- at least by FY26, we should reach at least 3.5%, if not earlier. We probably will reach it much earlier, but at least that's the goal. So, we have said 2.8% to 3%. We should be comfortably at 3.5% levels over the next few quarters. On this topic, I will also s ay that even the overall ROAs -- I mean, ROA, by mistake I think I said ROE, ROA at around 3.5% levels. And overall ROAs, as Wholesale comes down, over the same period, we can see going to the 3% mark and crossing it, which is giving us good confidence that even the overall ROEs can touch mid-teens as we finish the Lakshya period. So that is the overall profitability. You asked a very specific question on market shares, okay. We have been giving our Farm market share. So, our Farm market share in terms of number of vehicles is around 15%. Our Two wheeler market share is around close to 10% if we say number of vehicles. But slowly, we will start also calculating it in value as we move more to prime vehicles and we are close to 6% in Rural Business Finance. Of course, there counting market share is, I think, a little bit infructuous because the market is microfinance. They all report it as less than Rs. 3 lakhs, whereas our share of less than Rs. 3 lakhs is very small. But if you take it as reported, then it is about 6%. I don't think we are anywhere near counting our market share for Home Loans or Consumer Loans (Personal Loans). We are too small as well as SME also at this point of time. Does that answer your question?

Moderator

The next question is from the line of Saurabh Kumar from JPMorgan.

Sir, just I had a follow-up on the SR book. So, what will be the time frame for this run down? And secondly, beyond the Rs. 150 crores that you spoke about in terms of credit provisions, is there any fees also you pay for this SR? So, I just want to know the negative carry on the P&L...

But the negative carry, we give the entire wholesale book profitability. So that entire negative carry is in the wholesale book profitability. It is there in the presentation.

Okay. No. But on the SR you said Rs. 150 crores, because the book will keep running down, but you will keep paying this -- you'll keep having a markdowns and the fees, right? I don't know that kind of micro details, I don't remember over the next 4-5 years. As far as when it will run down, I mean, frankly, we expect it to start giving positively after another couple of years, because as I said, the SR value, so these are not parked SRs just because we don't like those assets. The effort on recovery is continuously on. And I would say conservatively after another 1.5 to 2 years, actual recoveries will start contributing positively to the overall P&L. But I don't want to guide at this point of time. You take the wholesale loss values, which is what right now? Wholesale loss...

Wholesale loss is about Rs. 50-odd crores per quarter.

Rs. 50-odd crores per quarter. That conservatively, you can take continuing till FY26. It can only come down but not up from that.

Moderator

The next question is from the line of Abhijit Tibrewal from Motilal Oswal.

I have just two questions. So one is, I mean your wholesale GS 3 has declined. So, congratulations for that. Just wanted to understand, last quarter, you had explained predominantly Rs. 1,000 crores in that was Supertech. So, has that account now been kind of sold down to another ARC or has got resolved?

Yes, answer to that is yes. So, it was only Supertech. And a part of that Supertech is sold to ARC. We would have liked to sell the whole thing, but that we could not. So, it is just that. It is not that the asset is resolved. However, as you know, Supertech, we have always said that we are more than adequately provided, whether it is on the book or with ARC. It is adequately provided, and it is one of the accounts, which may actually say, see recoveries, say, one year down the line from here. It is in that stage of NCLT. So don't read too much into the reduction from Rs. 400 crores to Rs. 175 crores. It is just part of Supertech going out to ARC. The important number is what we gave this time for the first time, Rs. 500 crores Net Stage 2 (NS2) in Rs. 9,500 crores. So, we -- last time, people were saying that, okay, I am saying that there will be no negative shocks. Based on what I'm confident? I'm confident based on the, number one, the momentum I'm seeing and likely to see, but most importantly, Stage 2 assets are just about Rs. 500 crores.

Got it. Net Stage 2 (NS2) in wholesale is about Rs. 500 crores?

That is correct.

Got it. And sir, just one more question that I had. I mean, while we all have been talking long-term strategy here. I think, I mean, when Sudipta sir was making his opening remarks, I gathered that you were -- I mean, a little cautious on how things could be in the second half, especially rural cash flows and how demand could be given that inflation is going up etc. So just wanted you to kind of explain that in some more details? Sure. Number one, everybody knows that August rains were very bad. Also, the distribution of rain has not been very good. Reservoir levels are quite negative from last year. These are the 3 negatives in rural. What are the positives? Positive is that the Kharif crop is not that down from last year. It is more or less at last year's level. The Kharif is, in fact, 0.34% up actually. Secondly, the MSPs are at record level, as you know now. So that works as a -- on the other side. So that is why we would not like to paint a negative picture in rural. It is very easy to paint a negative picture and then do better than that and positively surprise. We are only saying that we need to be cautious and see how demand progresses. When you're in rural, it's good money, but you have to deal with seasonality. Now what we are doing to deal with seasonality? There are various things that we have already highlighted: number one, making sure that collection is very analytics-driven and remains very strong, both 0 DPD and further collections. That is number one. Second, increasing disbursements to our 0 DPD existing customers. Always, one, they are safer, they pay on time more often than not. And thirdly, that is not seasonal. My current farmer customer borrows more not when there is -- tractor is in season or whether the tractor demand is going up or down, it doesn't matter. Same for rural business finance. We know the lady very well. We know her for 1, 2, 3 cycles. And at that point of time, we can take much better exposure. Fourthly, we are specifically making sure that in our rural business finance, the share of direct agri keeps coming down. It is around -- the share of direct agri is now around 25% to 30% at this point of time, more than 70% is non-direct agri even though everything is rural. So, the feeling I want you to give is seasonality and cyclicality is the truth of life. I also wanted to say that what all we are doing to make sure that we smoothen out these cycles as much as possible. And there is one thing which Sudipta said, which you may not have heard is -- perhaps is the first 20 days of the season, we are seeing a ve ry good season actually. So, the actual fact is going exactly opposite to what pundits say or what even I would have said. I'm no pundit, but I would have said that. But on the ground, I'm seeing very good pick up both for two wheelers as well as tractors. Perhaps a fuzzy answer, but that is because it is something in future, and I don't want to be very emphatic about future -- lots of factors are playing, right?

Moderator

The next question is from the line of Kunal Shah from Citigroup.

Yes. So normally, you tend to comment with respect to opex plus credit cost in terms of the trajectory. So, when we look at it, opex was slightly higher, credit cost was almost stable and what Sudipta also talked about in terms of 5 growth vectors. And I think maybe in terms of enhancing the customer acquisition or heighten the brand visibility and all plus optimization of talent pool, that will also involve a lot of cost, okay. So, what are the anticipated spends towards these five growth vectors? And any change in commentary with respect to opex plus credit cost...

No. Same commentary, will tend to 7%. Today, we are at 7.33%. In fact, this time I went ahead and actually split because I don't want to hide behind this opex plus credit cost and pepper over the increase in opex. The opex has increased. And I'm saying that it will be, as you rightly pointed out, we are doing several investments -- in brand, in IT, getting good people. It will remain sticky. I'm not necessarily saying that this percentage will go up. It will remain sticky for maybe next year or so. Sudipta, if I can say that?

Yes, it will be about a year or so. And then it will start coming down. And it is -- but it is not going up as fast as the spending measure because the operating efficiencies and productivity are also kicking in. But as a net of both this, the opex may remain sticky, credit cost will keep coming down and we are, hence, very confident of reaching our 7% guidance by FY26, the Lakshya period.

Sure. And so, in terms of credit cost, ideally, maybe what is obviously you highlighted a lot with respect to collection initiatives. But was there anything maybe specific in this quarter that you are confident that 2.74% in retail. So, wholesale has hardly seen any credit cost during the quarter. But retail, when you look at it, it's still 2.74% and mix is changing more towards the higher yielding ones, okay? So apart from maybe on the two wheeler wherein we are focusing more on prime, but what is giving y ou confidence in terms of getting this down to? And what would be the stable state levels looking at the profile, yes?

Okay. I mean I wouldn't like to comment on what will be the stable state. Our ambitions are very high, very high as in very low credit cost. But I can only say that it will trend down. You see that the reduction in this quarter is 2 basis points. I am not promising huge reductions every quarter. But yes, this two basis points, 3 basis points, 5 basis points, we will keep reducing steadily. Again, I'm not saying quarter-on-quarter, a particular quarter may go the other way. But continuously, it will keep reducing. Main reasons you see, component of Home Loans is going up, component of the higher variety of Rural Business Finance is going up, which continues with 99.8% collection efficiency. Home Loans, as I said, is going up. In Two wheelers, we are moving towards prime more. In Tractors, percentage of Kisan Suvidha is going up. Now as -- so, two things, big things, is one, as we said, products, which are much higher collection efficiency percentages are moving up -- number one. Repeat lending is continuously going up. And as we have always said, and we maintain is repeat lending has credit costs of about 1/3 rd of new lending is going up. And even in new lending, the gradual shift to more prime. So that is how we have modelled it, and that's what our experience says. And as I said, our ambitions and the models are -- the targets we have are much higher, but I wouldn't like to talk about that.

Moderator

The next question is from the line of Abhishek Murarka from HSBC.

So, sir, one question on SR. So can you give some more granularity. So specifically, two things I'm looking for, I think, one, you anyway mentioned. One, what is the provision on this? And two, on this Rs 8,000 crores, if you can give any cuts, for example, how much of it is roads, renewables, how much of it is operational? Or I mean, may not be operational entirely, but what's the, let's say, completed to not completed parts of R eal Estate. So, any kind of cuts that you can give for this Rs. 8,000 crores, it would be helpful.

If we could give the cuts, we would have given it in the presentation, if we wanted to give. But completion -wise I can tell you, Real Estate completion, we said some number . So around, I would say, 83% complete is what we can talk in our Real Estate book. So overall, if we put, it is about 83% complete -- towards -- there are various projects. But if you put on a weighted average basis, 83% complete. So that's all. But most importantly, when the CFO, outgoing MD and the new MD, we are all committing that wholesale losses will be maximum Rs. 200 crores year-on-year till FY26. Please understand that we have tremendous amount of confidence that no shockers are coming from this SR book.

No, sir, of course, of course. That was not the idea. Just to get a sense of the... More than this -- I mean you see that every quarter we are giving more and more, and we'll continue to do this. Don't worry.

Sure. And sir, just the second thing in terms of understanding when you give in your presentation the split between Microfinance and Rural Group Loans. The difference is only because you're making a difference between the Rs. 3 lakh income segment and higher than Rs. 3 lakhs. So, in terms of ticket size or other administration monthly, let's say meetings or in terms of operations is there any difference between these two categories?

You are right. Good question. As of now, no; but going ahead, yes. We are launching -- we have launched actually Rural LAP and Business Loans. These are the two products we are launching, which will be managed differently, very differently, very different rhythm, very different way of doing business. It is being -- and a different team of course reporting into the same business Chief Executive, but a different team. So -- but at this point of time, that portfolio is very, very small. But you're right that the rhythm is same. But more importantly, the resilience of these people to pay is much, much higher. Now the important thing, you asked one question, which is very important, that even if this is more than Rs. 3 lakhs, their income, the overall exposure cap, we have not removed. I believe that there are some players who have removed the overall exposure cap. The overall exposure cap -- exposure has been not only us, but for the industry. The overall exposure cap was about Rs. 2 lakhs. We have kept that same. In fact, in most cases, we keep it at Rs. 1,50,000, but maximum we go is the overall exposure of Rs. 2 lakhs, not our loan, overall exposure of Rs. 2 lakhs. That's -- so you're right, we treat them -- not -- by don't over lend to them, treat them as if they're less than Rs. 3 lakhs. But the point I wanted to make is because of higher income, their ability to repay and repay on time is much, much better. I mean you can see, Rs. 21,000 crores now, we are collecting 99.8% on-time.

What would be the difference in ticket size between the two categories ? Average ticket size, just for the microfinance versus rural group loans?

So, it depends on two things: it depends, one, on the FOIR of the customer. Second, it depends on the other loans that person has taken, right? So, it depends on the two things. So, let's say, more than -- because for both our overall limit is the same. So, if a microfinance customer has borrowed from somebody else Rs. 1,60,000, we will lend only Rs. 40,000 – or if she has borrowed -- and it works like that. So, we have not said that, okay, for Rural Business Finance, there is higher ticket size, for microf inance it is lower ticket size. It depends on what is her total exposure, what is her FOIR and because of that what is the gap that we have to lend.

Moderator

We'll have to take that as the last question. I would now like to hand the conference back to Mr. Dinanath Dubhashi for closing comments. Thank you. So, I think I will not repeat anything that has been said other than that we here are very, very confident of continuing with the growth path that we have put and at the same time, continuously improving profitability ratios, not only of retail, but also overall profitability ratios as we keep reducing wholesale. Reduction of wholesale enables two things: one is the convergence of the profitability ratio s, and second most important thing is any possibility whatsoever of suddenly some P&L shock coming - we are very confident that, that is not going to happen. As we go ahead, we look at the future only positively. Now that is as far as the company is concerned. I would like to wish you a very, very happy Diwali, happy Dussehra before that. And more importantly, would like to also state that it would be my last quarterly earnings call as the MD and CEO of the company, would like to put all my gratitude and all my thanks on record for all of you. All of you have been absolutely wonderful interlocutors, and it has been amazing to speak to each one of you. I have tried to take inputs from each one of you, learn and incorporate that in the way the company is managed. The team is here to take the company ahead and more importantly, Sudipta has landed with his feet running. And in the 4 months that he has spent here, I'm very, very sure that he will take the company to new heights as we go ahead. So, thank you very much. God bless you. Happy Diwali and happy Dussehra.

Moderator

Thank you very much. On behalf of L&T Finance Holdings Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines. *Since the transcript has been derived from a voice recording tool, necessary corrections have been made to remove anomalies as well as manifest but inconsequential factual discrepancies, repetitions in Q&A which would have unintentionally crept in, if any