Good day, and welcome to the Q2 FY 2024 Earnings Conference Call for Bandhan Bank. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Mundra from Bandhan Bank. Thank you, and over to you, sir. Thank you, Rayo. Good afternoon, everyone, and a warm welcome to all the participants. It's our pleasure to welcome you all to discuss Bandhan Bank's business and financial performance for the quarter ending September 2023. We will take this opportunity to update you on the recent developments in the history, in the industry, as well as on Bandhan Bank during the quarter. To discuss all this in detail, we have with us our Founder and Managing Director, Mr. Chandra Shekhar Ghosh; Executive Director, Mr. Ratan Kumar Kesh; Chief Financial Officer, Mr. Sunil Samdani; Head, Retail Banking, Mr. Shantanu Sengupta; myself, Vikash Mundra, Head of Investor Relations, along with other senior management team of the bank. We'll be happy to provide you with any clarity if required from the current quarter's number and the way forward. Now, I would like to request our Founder and MD and CEO, Mr. Shekhar Ghosh, to brief you all about our bank's operational and financial performance, along with the development for the quarter ending September 30, 2023. Over to you, sir. Thank you, Vikash. Namaskar. A warm welcome to all of you. I am pleased to state that the July to September 2023 quarter has been an encouraging quarter for the bank. However, before talking about the business numbers, I want to update you about one important milestone that the bank has achieved very recently. The bank, earlier this month, has successfully completed the migration into a new core banking system. We have, we had faced some hiccups during the first few days, as one can expect in a mega transformation like this, but now we are fully functional. We are now live on Oracle's FLEXCUBE, a CBS platform used by some of the largest banks in India and globally. This migration is the first step in our tech transformation journey. Along with the CBS, we have also launched our all-new internet banking platforms and mBandhan, our mobile banking app, both with far improved UX and UI and stronger functionalities. The new CBS, along with the surround system, will enable us to be far more agile, launch newer and more potent products and services, use data and analytics more effectively, and drive personalized customer experience. Coming to this, the business point of view. Despite the various global uncertainties, India's key macro parameters remain strong. Inflation has softened to 5% to GDP in financial year 2024, is projected to be around 6.5%. The RBI has kept the repo rate unchanged for over 8 months. The favorable macro backdrop should continue to help the momentum in the Indian BFSI sector in the coming months. During quarter two 2024, Bandhan Bank's overall advances growth 12.3% year-on-year and 4.3% quarter-on-quarter. The quarter-on-quarter growth in the loan book reflects uptick in demand for all asset verticals. EEB vertical added about 600,000 new borrowers during quarter two, financial year 2024, as the EEB portfolio increased 5.2% quarter-on-quarter. The retail loan book grown 80% year-on-year and 15% quarter-on-quarter. Growth in the case of retail assets and commercial banking continues to be impressive. If you see that the commercial banking vertical, consisting of financial institution group, MMG, and SME Lab, grown 65% year-on-year and nearly 7% quarter-on-quarter. The housing finance book has registered a growth of nearly 4% year-on-year. In line with our medium-term strategic objectives, the share of secured asset as part of our total loan book continues to increase. It reached nearly 44% in quarter 2 2024, up from 38% from one year before. We expect to have nearly 50% of our portfolio will be secured by financial year 2026. Coming to this, the liabilities, which bank have a very strong presence on that. Sorry. On the liability side, total deposits at INR 1,12,000 crore at the end of September 2023, it has been grown 12.8% year-on-year, a tad stronger than industry growth. As we focus on granular retail deposits, our total retail deposit and retail term deposit grew 13% and 20% year-on-year respectively. The retail to total deposit ratio, which was at around 71% in the last March 2023, moved up 74% by September 2023. CASA deposit, which stands at INR 43,196 crore at end of quarter two, financial year 2024, have shown an impressive growth of 10.5% quarter-on-quarter and about a 6.5%--6.6% year-on-year. CASA ratio stands at a healthy 38.5%, compared to 36% in the previous quarter. Microfinance customers continue to contribute just about 4% of our total deposit. Customers continue to repose their trust in the bank. The bank has added about 10 lakh customers in this quarter. Number of liability customers increased by 12.5% year-on-year. Volume of total customer transaction increased by 47% year-on-year. In terms of value, it increased by 13% year-on-year. Coming to this, the asset quality. Let us now move on to trend in collection and asset quality. There has been a good improvement in collection efficiency. The bank's overall collection efficiency, excluding NPAs, stood at 98% for the month of September 2023, up from 97% in the September 2022. Especially for EEB segment, our collection efficiency, excluding NPA, stood at 98% for the month September 2023, significantly up from about 95% a year ago. The post-COVID portfolio, consisting of all loans disbursed after June 2022, clearly turning out to be a strong one. Gross NPA ratio of the post-COVID book stands at 2.6%. There has been improvement across buckets for both forward and backward flows. Current to SMA zero flow was 1.5% in quarter two, 2024, against the 2.8% one year ago. On the other hand, SMA zero to current flows improved to nearly 25% in quarter two, 2024, from 13% a year back. If we now like to see the profitability, the bank has registered a net profit of INR 721 crore during the quarter two, financial year 2024, against a net profit of INR 209 crore a year ago. This was a year-on-year growth of nearly 245% year on profit. Our net interest income, NII, in quarter two, financial year 2024, was INR 2,443 crore, compared to that of INR 2,193 crore in the quarter two, financial year 2023, registering a growth 11.4% year-on-year. Our net interest margin stood at 7.2% in quarter two, 2024, marginally better than 7% quarter two, 2023. With faster portfolio expansion in quarter three and quarter four, NIM usually moves up. Just for the month of September, NIM was at 7.66%, reflecting festive demand. Gross NPA stood at 7.3% in quarter two, 2024, as compared to 6.8% in quarter one, 2024. Net NPA stood at 2.3% in quarter two, 2024, versus 2.2% in quarter one, 2024. However, total credit cost has been largely stable at 2.5% in quarter two, financial year 2024. The bank delivered an ROA of 1.9% and ROE of 14% in quarter two, 2024. In the branch and digital expansion, the bank continues with emphasis on its branch network. This quarter, we have added about 800 branches, over 70% of which are in the northern, southern, and western zone. Today, the bank has its branch presence in 35 out of 36 states and union territory of the country. I also want to highlight how our performance in digital banking was improved. 95% of our total GB transactions are happening digitally. Monthly active users on our digital banking platform are up 57% year-on-year. Our digital transaction volume increased 47% year-on-year. Our UPI transaction increased 63% year-on-year. The bank has enabled a direct tax collection under pay at the bank counter for customer as well as non-customer. We have also been authorized by the RBI for disbursement of central civil pension very recently. All this will help us offer better service to our customer and also to reach new customers. Overall, all these figures, I'd like to mention this, the three points. The growth of the business has come, and showing this quarter is very good on that. EEB, we have been disbursed of INR 4,000 crore more than the last year, same quarter. 4 lakh new customers we are added this quarter on EEB, to, we are giving the loan to them. Portfolio, last year, the Q2, there are INR 600 crore are declined from the Q1, which is this year, Q2, there are INR 2,000 crore increase from the Q1. And altogether, we have been seeing that a very good new and existing customers' credit demand has been increased. So that we are very confident on that, credit growth has come up, and whatever we are guided our credit growth of this financial year will be reached on that nearly 20% year-on-year. Second, my point on that, the quality of the portfolio. We see that the quality of the portfolio, the DPD has come down. Total DPD, SMA zero, one, two, MA, MA, EEB, has come down 1.3% together in these three, and NP increase 1.1%. So that is also, we have been seeing that the fresh slippage, recovery, and the DPD going down have been given the confidence we are returned back to this, the control of this, the portfolio, and which is the better portfolio we are gradually like to show in future. My third point on that, that is in deposit. Within these circumstances, the bank have been also grown, the deposit have been good, and which have been given the confidence to us on that, we'd be like to continue whatever the demand of the credit growth, deposit also will be not the challenge. Even in this—if you see that the, my CASA have been increased from the last quarter, 2.5% in this quarter, within this situation. My third point, all other parameters and ratio, it is—all are aligned with the Q1, more or less in the same on that all. It has been shown the confidence to the bank and the team, that we are now coming to this better position, and we are from here to grow in a better way to the future. So of course, whatever the credit credit cost we are predicting in this financial year, 2% plus 20 basis points or minus, we'll be like to reach, and that all parameters have been shown us. Finally, historically, the 2H of the financial year is a significantly stronger period for most of our business vertical. As the festive season sets in, there has already been notable uptick in credit demand. Of late, we have successfully completed the migration into the new CBS and have initiated several steps to boost cross-sell and the branch-led sales to grow the retail assets and liabilities portfolio, and also to increase productivity per employee, supported by our digital and analytical initiatives. Overall, we are all on our way of achieve long-term strategic goal of portfolio and geographically diversification. Before we end the session, I, on behalf of the whole bank family, wish you and your family a very happy Durga Puja and Dussehra, as well as Diwali. I wish you and your family all the best. Thank you. Enjoy the festival. Yeah, we can start the question and answer session. Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mahrukh Adajania from Nuvama. Please go ahead. Yeah, good afternoon, sir. So my question is on the DPD of the DPD book of micro. Now, if you see last quarter's SME book, then this quarter's slippage is around 65% of that book, total SME. Now, we are left with an SME of around INR 17 billion. If you assume the same run rate of slippage, then would you again have a slippage of around INR 10-11 billion even in the next quarter? Or will recoveries improve materially? How do you view it? Mahrukh, see, H2 historically, if you see, has always been a better quarter or better half for us for any financial year, whether it's in terms of new business growth or also the, collection point of view. So the fact that our DPD has come down materially quarter-on-quarter, we expect this to reflect in the slippages number also going forward. And also, as I mentioned earlier, the recoveries will continue to improve. That has been the trend for last many years. H2, the recoveries are always better. So on both counts, we expect, one, the slippages to be lower and recoveries to be higher. But so, any run rate of slippage for 2H, percentage terms or any such thing that, if at all it's possible, to guide? So we don't want to put a number, but for that very reason, we've added 2 more blocks into our presentation. You know, this is on page 7, right? What we are saying is, how our portfolio pre- and post-COVID in terms of asset quality looks like, and also the vintage analysis. So from starting Q1 FY 2023, the disbursements and the portfolio performance accordingly. So if you look at both these blocks, you know, it gives us the confidence that, you know, the steady state credit card guidance that we've been giving, you know, this performance of last 1, 1 and a half years' disbursement is in line with that. Yeah, if I may add a little more to it. FY 2021 onwards, the portfolio is 92%, the GNPA is 2.6%, and if I go even to eighteen months portfolio to the April 2022 onwards, that is even better, 2.3%. So directionally, the DPD bucket is getting lesser and lesser. Also, the overall GNPA is coming down for the new offset of portfolios. Therefore, we will continue to maintain that credit cost guidance of 2 ± 20 basis points. Got it. But and that should be achieved in 2025 or in 2024 end itself? 2024, end. 2024, end. Okay. Okay, thank you so much. Thank you. Thank you. Before we take the next question, a reminder to participants that you must press star and one to join the question queue. The next question is from the line of Gaurav Kochar from Mirae Asset. Please go ahead. Yeah. Hi, sir, good evening. Couple of questions. Firstly, if I look at the DPD movement, and if you have given the vintage analysis, in that slide. So, while you have given the NPA on disbursement, can you also call out what would be the DPD? I mean, I want to understand what would be the par book, because generally, NPA would take 90 days. And even if I look at four key numbers, from there, we are already starting to see NPA in Q2 itself. So, just to give some context, do we have the DPD number, 0+, 0+ or maybe 30+, early delinquency from that disbursement? No, if you see that in the page six, so we have given that the DPD number. 30 to 60 days, we have the DPD is 1.1%. 61 to 90 days, 1.3%. So that is there. No, not that, sir. I am talking about the, like you have mentioned, NPA in the next slide, you know, quarter by quarter. So let's say you have given Q4 2023, the total disbursement was INR 21,000 crore. Of that, INR 120 crore turned NPA, and NPA as a percentage of disbursement is around 0.6%. So rather than giving the NPA number, do you have a delinquency number, let's say 30+? How much of that- That is not, not in hand now. It is not in hand now. Okay. Okay. That would have been a little more helpful because NPA would obviously take 90 days, but delinquency would give you an early indicator as to whether the situation is worsening. Because if I go by this, then clearly 1 year- Only one point I mentioned in here, overall, if you see that the, 22.6% has come down 1.8%, and 1.5% has come down 1.1%. This is a together to all. Earlier portfolio, new portfolio. So major portfolio are new. If you say that 92% are new portfolio, that means that the 1.1% is in, majorly is in, 92% of the portfolio of that. Sure. But sir, all of this has come down by moving them into NPA, not by recovery. So, I mean, at an aggregate level, the entire pool, if I add the 1+30, 1-30, 31-60, and all of it, including NPA, the pool has only gone up by INR 300-odd crore. So it's not as if this pool is coming down because you're recovering money, it's more or less, there is a DPD movement. Your 30 bucket is going to 60, 60 to 90, and 90 moving to NPA. ... No, so Gaurav, if you add or, you know, let's, let's add the TPD as well as NPA, you know, the total increase for the quarter is INR 260 crore. Yes. Which is well below our guided credit cost guidance, right? And, That is right, but, ideally, because this is at an elevated level, one is expecting this to come down, not, you know, not to go up. So that we discussed in the previous question, right? That we expect the slippages to come down and the recoveries to go up further in the H2. Okay. Okay, sure. And secondly, on the PCR, now, you've given this contribution to NPA by vintage. If I look at the overall PCR, you're standing at around 70%, roughly 60%-70% of your book is NPA. 3/4 of your NPA book is MFI. And typically, in MFI, the recovery rates are much lower. So is there a case of, you know, increasing the PCR, moving it to maybe closer to 80%, where most of the banks are today, even without microfinance? So, I mean, is there a case of you... Because the recovery rates have clearly not been in line with the expectations. So as far as our PCR on the EEB book goes, we are at 85%, right? The other businesses which, the other second business, which is higher, you know, in terms of NPA is housing, there the coverage is about 35%-36%. So to your point, the coverage on the unsecured book is already at an elevated level of 55%. And also, you know, if you look at our page 7, we have recovered, this is on page- Eight. Eight. During the quarter, we've recovered INR 246 crore from the ARC pool, which we had sold in the month of December 2022 and March 2023. And further, if we break that up, the December tranche, whatever was to be paid to the ARC and the investor, we have fulfilled their, you know, requirements, including the IRR. So now on, we are in a situation where every recovery from this pool will start flowing into the bank. Okay. So this is also an added, you know, recovery, which will start reflecting from Q2 onwards. As far as the March pool goes, which we sold to ARC, we expect to fulfill that requirement also by Q3. So the December one, we've already met the ARC and the investor requirement. March one, we expect it to be fulfilled by Q3, and in Q4, we will have both the tranche recovery reflecting into the, bank's P&L. So we'll get, you know, the recovery is as strong as almost INR 246 crore per quarter. We expect the overall credit cost, if I have to adjust this 50 credit cost, to be, in our guided range, much below the guided range. Okay. Sir, just to understand, this INR 246 crore, how does this get accounted? Because, in the December column, as you mentioned, you already have, in the Q4 column, you already have NPA sale to ARC as INR 23 billion. Now, this INR 246 crore is out of that ARC. So how does this get accounted? Is it part of the four twen- INR 400 crore recovery we are seeing in this quarter, or is this part of the P&L and netted from credit cost? So two things. One, firstly, the entire INR 246 crore is not something which has flown to the bank. It is only in the month of September that we've been able to fulfill their requirements. So only one month, effectively one month collection, has flown to the bank, right? So the full impact of that will be visible only in the Q3. Okay. That impact is about INR 93 crore, which is reflected as part of reversal of SR provisions. The SR book, which we had kept as a bank, we had provided 100%. Now that we have started recovering, that book is coming down, and accordingly, the provision is getting released, which is reflecting as part of my other income. Okay. So you're saying out of this INR 246 crore, INR 93 crore was reversed in this quarter P&L, the remaining will be reversed in the next quarter? Remaining has paid back to ARC, and now their quota for December is fulfilled. Okay. Okay, so this is, out of this INR 23.2 billion, which we sold in Q4, correct? No, we are talking about Q3, the December 2022. 8,004 INR 8,900-odd crore. Okay, because in the sale to ARC, maybe I cannot see anything in 3Q in your slide 8. [Crosstalk] Okay. Okay, sure. Understood. So, let's say on a steady state, like next quarter onwards, assuming this is steady state, what could be the slippage run rate or credit cost run rate? Anything you can guide? Because last few quarter, I mean, last quarter also, the slippage was X of the, X of the ECLGS book, the slippage is over INR 8 billion. Now, there is no ECLGS book, but slippage is still INR 13 billion. Just wanted to make some sense out of the next two quarters. How should we look at slippage? I understand the 2H is typically better, but as far as the slippages are concerned, I mean, even in last year, the slippages were elevated in the 2H, they were not lower. So, just wanted your thoughts around that, if you could help. ... So we don't want to put a number to it today, but, you know, if you look at the DPD pool, that pool itself has substantially come down quarter-on-quarter, so we expect the slippages also accordingly to reflect that change. All, all right. I'll probably take it offline. Thanks. Thank you. Thank you. The next question is from the line of Jay Mundra from ICICI Securities. Please go ahead. Yeah, hi, good evening, sir. Thanks for the opportunity. Firstly, sir, on margins, right? So in your opening remarks, you mentioned that, margins for the month of September was 7.6%, versus which is materially higher than what we have reported for the quarter. Is, is this a function of better yield, as, as you have mentioned, in terms of festive season? Or, you know, you are seeing the cost of deposits or cost of funding easing off? No, to correct your number, it is 7.3 and not 7.6. No, September, only September. For the month of September. Only for- For the month of September. Sorry. Oh, okay. That was a mistake, yeah. Okay, so 7.3 versus 7.2 for the quarter, right? So- Yes. Yeah. Okay, okay, sure. But anyway, so how are you looking at cost of funds, sir, incrementally? Should they remain firm up, or you think they have already, you know, or are sort of peaking? We feel that it will be 20 basis points or 25 basis points going up, and next 2 quarters. Yeah, but it will be compensated with higher yield, so we will remain in the range of 7-7.5 on the mean side. Sure. Sure, and secondly, on your AUM growth, right? So, I mean, YTD, financial year YTD, it is still a bit negative, right? That would mean a very steep ask for you to deliver the 20% YOY growth. Of course, there is a 2H, you know, wherein you see better business momentum, but you are confident of the 20% AUM growth, right? We saw that there is an normally, Q2 always has been taken the time to balance the March figure. So, if the last two years we have been seeing that, it will be taken the Q3 also. So whatever the Q2 in this year, we have been seeing that the business growth especially is coming from EEV, INR 2,000 crore, given the extra, which has given very good indication on that. The Q3 will be like to exceed the YTD, and the March it will become to this, the nearly 20%. Also, you know, in March, we had mentioned that there is a very short-term loan against term deposit of INR 2,500 crore, right? Which is a very short term and which has to be adjusted for the growth. Right. If you adjust that INR 2,500 crore, we are back to March level. Right. Right. Okay. Sure. And sir, on asset quality, if you can tell us the slippages from the EEB book and... Yeah, so, so that will make slight more comparable on the SMA pool. I mean, out of INR 1,320 crore of slippages, how much would be from EEB? The EEV is INR 1,000 crore, and that includes about INR 55 Crore of, Manipur. Manipur. Right. So, sir, if I net that off, at the beginning of the quarter, we had SMA-0 + SMA-1 + SMA-2 of EEB at around INR 3,200 crore, out of which INR 1,000 crore slipped, and the ending pool is INR 2,800 crore, right? So there is still a reasonable inflow into SMA pool, right? That math is right, right? One minute. Yeah. So the SMA two was about INR 700 crore, INR 720 crore, right? Last time, which this time is INR 690. Right. SMA two, plus the Manipur pool, typically takes you to the slippages number. So Manipur is not there next quarter because whatever has to flow has flown. So which means proportionately, we should see a reduction in the flow as well, and it typically H2 is even better. Right. Right. Sorry, sir, and just the last clarification, what was so special about Manipur? Sorry, just to refresh, what came out of... No, no, so the point is inactive, right? There is no movement happening there. There is a restriction. Right. Right. Okay. Sure, sure. Okay, understood. Thanks. Thank you, sir. Thank you. We'll move to the next question. Next question is from the line of Himanshu Taluja from Aditya Birla Mutual Fund. Please go ahead. Hi. Hi, sir. Thanks for the opportunity. I just have a similar question, what actually the last participant has asked. ... Sir, if I look at total last quarter, DPD pool together is INR 2,800 crore of that DPD pool together, 1-30, 31-60, and 61-90 together. Now, in this quarter, that has actually come down to INR 2,300 crore. If I took last quarter, INR 2,800 crore and INR 1,000 crore might be of the slippages, so your fresh flows from the standard book, it looks to be INR 500-INR 600 crore. This gives me a sense on the total book between 3%-4% of the incremental standard book is flowing in the path. So can you just give me a clarity, give me a sense why that the standard book is still that number looks to be elevated? I mean, with your calculation, we'll have to rework that calculation. Sir, if I just like, your 1-30 is INR 13.3 billion, your 31-60 is INR 7.5 billion, and your 61-90, INR 7.2 billion of last quarter. Correct. Together, is a sum of around INR 2,800 crore. Fair? Correct, INR 2,800 crore, correct. Yeah. And in this quarter, your DPD pool, SMA 1-90 together is INR 2,300 crore. Fair? Yeah. From INR 2,800 crore, if 1,000 crore would have been slipped as an NPA, it means still INR 1,800 crore plus some, your current book is INR 2,300 crore. It means 500 crore would have been come as a fresh flow from the standard pool, and that still remains 3%-4% of your book basically, which is flowing in the DPD movement. So just trying to get a sense- Okay. What is the why that fresh flow still remains high? If you see that the INR 900 crore, the slippage has come to the NPA. Correct? No, so on a steady state basis, we still expect about 2.5% to be the flow, and then there would be a recovery from there. Right? And which would bring us to that desired level of credit cost. And what we are talking here is the gross slippages. Hello? Yeah. Okay, sir, I will take it offline. How you calculate this at 3%? Yeah. Sir, ideally, I'm just saying your last quarter SMA was full around INR 2,800 crore, and- And then 2,300 now. I'm assuming the gross slippages of INR 1,000 crore from this has been come from the 1-90-day pool. So if INR 1,000 crores got deducted, it means that last quarter pool would have been around INR 1,800 crore. And in this quarter, if I do that together, your reported numbers is around INR 2,300 crore. So I'm just trying to understand, your fresh flows from the standard pool still comes to around INR 500 crore. And if I do analyze this, if I do this as an analyzed number, so it means 3%-4% of the book is coming as an, it's flowing as an SMA. So just trying to get your sense. No, 553, 53, 900, overall book you are calculating. No, but I'm, I'm a little confused as to why 3% overall is not a good number, because we say 98% should be the steady state collection efficiency one should expect. And collection efficiency 98% means there could be 1%-2% part-paying customer, which effectively means 3% credit cost or, or the gross flow into the portfolio. And then there will be recovery from that pool. So that's the guidance we are any which way giving. And in our case, 96% are full pay paying, 3% partial paying customers. Okay. Sure, sir. Sure. Thanks. Yeah, thank you. Thank you. Before we take the next question, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Saurabh Kumar from JP Morgan. Please go ahead. Sir, just two questions. One is, your interest on advances, you know, has not gone up. So can you just tell us, because I thought there would be some repricing which would happen in the microfinance book. So what's happening there? And second is again, back to this forward flow question. So if you look at your entire zero plus, including NPA, that's gone up by about close to INR 300 crore for the quarter. That's 2.3% of the opening book. Is that a fair way to understand it? So to your first question, you know, this growth for the quarter has been backended. You know, typically, you see that seasonality in our business. So, July and 1H of August, we were still degrowing, and the book started stabilizing end of August, and the growth came typically in the month of September. So the average for the quarter is lower than the Q1, and that's precisely the reason why my interest income is lower this quarter vis-a-vis the previous quarter. But this benefit will flow into the coming quarters. Okay. And, for the interest expense also, because of this, that's mostly mixed change, or? ... No. So interest expense, as we mentioned, in this quarter, we had taken an increase in savings bank rate, which gets transmitted almost immediately. The term deposit, if I have to reprice it, basis the current rate that we are offering our entire book, we expect the cost of funds to go up by about 30 basis points, 20-25 basis points, assuming current rate prevails. No, so, my point is your interest expense is also like, you know, gone up only 1%. Your borrowings plus deposits are also like- Correct. A similar amount. So there is no like, we would have expected higher cost of funds. That doesn't seem to have come through. No. So in fact, it, it's also the other way around, because the benefit of the low-cost cost came in only in the 2H of the quarter. Okay. Okay. Just on the forward flow question, sir? I think we discussed that. We'll take that offline, because we... You know, our point is very clear with the gross flow- No, no. Point was at 300, as a percentage of opening book is 2.3%. Is that the way to understand it, the total gross flow? Yes. I mean, that's, that's the right way to understand it. Okay. Thank you. Thank you. We move to the next question. The next question is from Pranav Gupta, from Aionios Alpha Investment Managers. Please go ahead. Hello? Pranav Gupta, you may go ahead with the question. There seems to be no response from the line of Mr. Pranav Gupta. We'll move to the next question. The next question is from the line of Gao zhixuan from Schonfeld. Please go ahead. Hey, sorry, my question is gone. Thanks. Thank you. We will move to the next question. The next question is from the line of Prabal from Ambit. Please go ahead. Yeah, hi. Thank you. Am I audible? Yes. This quarter, we saw very good pickup in savings deposits for us. As a trend, savings deposits are pretty volatile, so why is there a volatility and was there a one-off in our deposits this quarter? No, no. You see, there has not been any element of volatility in our book. In fact, every quarter we had explained where there has been a movement from savings to term deposit. You know, we've seen two quarters where the term deposit rate was materially higher than the savings bank's rate. We saw the funds moving from savings to term deposits. As we've now increased the savings bank's rates as well, we see a stability in the savings bank deposits. So with increasing customer base, that deposit is also growing because there is no material outflow there, and that's the reason why we see the savings bank score. Okay, and there was no one-off in some of the larger bulky targeting, accretively? Nothing. So bulk went down. Okay. The pick-up in consumer, so we had earlier said that we are looking to reduce share of group loans, group microfinance loans in the overall book. But again, this quarter, we saw very sharp jump in group disbursements. So is there a change in strategy, or this is just an opportunistic kind of disbursement, since we are, like, targeting the loan growth of 20%? No, no. So we said the percentage-wise, the share of group loan will come down. So as our retail, commercial, other businesses start to, you know, is doing better in terms of growth, we are also increasing our EB. The idea was never to degrow the EB or a group loan book. You know, the idea was that the other businesses will pick up faster so that our secured, unsecured balances make up. And which is the case which is happening. We see the secured businesses are doing, are having a faster growth. So retail has grown 80%, commercial 65%. We continue to maintain 20% overall growth, with 17% on the EV side. Okay. Just last question on the expense side. So, since we are looking to grow the commercial banking book and go into the higher ticket side and the microfinance as well, do you feel that the quality of employees, the kind of salary that they are getting currently, will also have to be raised? And so structurally now we are going to see higher salary per employee compared to what we had in the past, since now we are introducing the new, new products and new businesses. That has already been happening over the last couple of years. We've been investing on retail and commercial. That will continue. And, as we progress, even on the retail side, we will need to hire good quality talents, as well as on the commercial side. That's already happening. There is nothing new. It will continue to happen in that manner. So meaning the OpEx to asset or cost to income will continue to stay high for us, at least for next 2-3 years as we stabilize on the front side? Not really. Not really. We guided for 3.5% OpEx to asset. H2 is the period where the growth in the balance sheet happens. So with the growth in balance sheet, I think 3.5% OpEx to assets will be met. More importantly, the bulk of the cost on the IT transformation and new branches that we have added, that has already been done. Incrementally, the IT transformation significant cost will come down. New branch addition, as we said, will be 100-120 per year, so even that will also taper, taper down. Understood. Thank you. All the best. Thank you. Thank you. The next question is from the line of Praful Kumar from Dymon Asia. Please go ahead. Yeah, thanks for the opportunity, sir. Very good evening to all of you. The first question is, is there any communication from the RBI on the Assam refund that we had to get? Assam refund, 1 tranche has already been paid. We received some INR 47-odd crores, and we refunded back certain amount of money where the customer had already paid back. Okay. That is for the lower ticket size of up to 25,000 tickets. Okay. Okay. It's not related to RBI, though. It's from the directly Assam government. Okay, but incrementally, any update, you know, when the next tranche should be? Yeah, when they announce the higher ticket size, we expect to get a higher share of the overall kitty. All right. Some second observation and comment from Mr. Kesh will be to understand more on the senior level exits that we have seen in the bank for the last one year. Broadly, want to understand more, you know, from a culture point of view. Anything that we are doing incrementally to ensure that stability at the top level is maintained? Yes. We are maintaining in that top level. Okay, sir. All the best. Thank you. Thank you. Before we take the next question, a request to participants to please limit your questions to one per participant. The next question is from the line of Srijan Sinha from Future Generali India Life Insurance Company. Please go ahead. Yeah, thank you, sir. So I wanted to understand, what is the status of the CGSME recovery that you were supposed to get earlier in Q1, then it got pushed into Q2, and, I mean, we have still not got that. Where is it stuck? CGFMU, there was an audit done. Considering there's a large amount, they initiated an audit. Audit has been completed. There are certain queries that have been raised. We are answering those queries. That resulted into some bit of a delay in the whole process, but we are engaging with them. As and when it comes, we'll keep you updated. That should hopefully happen in this quarter? Because it's a government matter, we cannot put a date because that's wrong to commit anything. But yes, we are pretty much engaging and answering the queries. And yes, it has slightly delayed the whole process so far, but we are hopeful that it should come out at some point. Okay. And, sir, my second question is on savings bank and bank interest rate hike that you have done. I missed when was it implemented? Sorry, what did...? Oh, this one. When was the savings bank interest rate hike implemented? Yeah, it was, it was implemented last month. That's on a specific, specific bucket. In September, September month, you mean? Yeah. Yeah, that's right. From September. Okay. Okay, and sir, my final question is on the asset quality. I mean, if I look at your collection efficiency quarter-on-quarter, that has gone up by let's say about 100 basis, excluding NPA. 98 has gone to 99. If the collection efficiency is at 98, 99% consistently over last six odd months, what explains this forward flow into the NPA bucket? So see, we've been telling this, that our full-paying customer, you know, one should look at collection efficiency along with the full-paying customer. That has been only 96%, which typically means at some point of time, 4% of the customers will slip into NPA. Since they are part-paying, there will be recoveries also from those customers, and ultimately we'll recover some money from those. So that is where you see this 3.5-4% kind of a gross slippages number coming in, because the full-paying customer is 96%. Okay, clear enough, sir. Thanks a lot. Thank you. Thank you. The next question is from the line of Prakhar from Elara Capital. Please go ahead. Hi, sir. Thanks. Just three questions. First, in terms of CGFMU recovery, and you probably mentioned that, you can't put a timeline to it, but, this was always a government thing, so what made us change our stance in one quarter, wherein we were so certain that it will get reflected in Q2? And now in this presentation, when I look at, we have not even put down outside there that it will reflect in Q3 also. And what happened with ECLGS guarantee, wherein we also last time said that it will happen in Q2, but that seems to also get delayed. So, the only change, Prakhar, is that in the first tranche, for the INR 900 crore, there were no audit. In the second tranche, there is an audit happened, and given that audit has happened and there are certain queries raised, so we are answering all of those queries. ... That, according to us, it has delayed the process. Otherwise, we are quite hopeful to get it. But that would change, that audit outcome can also change? The audit outcome can also change the amount? No, amount is higher. If you see that the INR 917 crore is the first tranche, second tranche, we have- Twelve ninety. INR 12.90 crore. So when it has been exceeding INR 1,000 crore, there is some process is there which must be audited, and then we'd be like to proceed on that. So that is the one cause as per our knowledge. ECLGS, as you know, it's a, it's a bit of a operational, that upload issue, and it's happening on track. I think INR 85 crore is already done. INR 410 odd crore is still pending, and it will happen as per the process, because there are no bulk, upload facilities, so it has to run- ECLGS, last time we discussed, right? That has to be uploaded one by one. There is no bulk upload facility, and there are capacity constraints at the NCGTC at the moment. So we have re-uploaded and received INR 85 crores in the quarter. The total amount to be received is about INR 500 crores, of which 85 is received, 410 is something which is pending. Okay. Just on second bit, with regard to liability side, you probably mentioned a bit about that, but on savings, when I look at average savings balance per customer, on there, when I look at the comparison going at industry level, and you are reporting an INR 3,000 balance per customer rise in a quarter, how what explains this? No, so as we mentioned, we've increased our savings bank rate. And so it gives customer the flexibility to use the savings bank account at a maybe 1%, 1.5% lower than what they get in the time deposit. And if the customer wants to opt for that, they don't, you know, they keep money in the savings bank instead of moving it to the term deposit. And that has helped us increase the overall balance. If you see in September 2022, it was INR 59,000 crore. It came down to INR 51,000 crore because the gap between savings and the time deposit rates increased during this period, as time deposit rates went up by almost 200 basis points in last one year, and the savings banks remained constant. The quarter-over-quarter growth has come up, so you're talking about... So the last quarter, we've grown from 50- Yes, so the only thought process that I had is that you raised rates in September, so probably our customer base is so sensitive to interest rates, that we probably saw overnight that our average balance is moving from INR 51,000 to INR 52,000. That has also helped, and also the new customer base that we acquire. You know, if you offer 6.5%, 6.75% as an interest rate, so clearly these customers, there is even some bit of sensitivity towards the rate, right? We are a bank. Since inception, we've been offering the, you know, differential interest rates. Yeah. I think just to add to what Sunil said, if you look at the individual customer segments, the overall balances have gone up, so that's something that we're seeing as a positive, positive sign. Prakash? Just one last bit in terms of your other income. So this collection fees from ARC that you had up around INR 37 crore this quarter, given that for December transaction you have already paid through, and March you are expecting that this will be paid through in next quarter, till when do you see this collection fees coming from ARC? I think, I think by Q3, we should stop, you know, receiving this, you know, collection fee. So Q2, Q3 would be end, and some part of that could flow in Q4. But after that, I don't think, you know, that collection fee would be applicable for us. Got it. INR 93 crore that we talked about is there in other, or other fee income? Yes. That's part of the other income. Other income also has INR 44 crore mark-to-market hit on account of bond yield going up, and this INR 93 crore as well. Got it. Thanks. That was just something. Thanks. Thank you. The next question is from the line of Piran Engineer from CLSA. Please go ahead. Yeah, hi. Thanks for taking my question. Just one thing on the housing book, growth has been, you know, slow for 3-4 quarters now. So any comments on that would be helpful. Yeah, thank you for the question. We are, you know, what we see in the housing book is that we are seeing a steady recovery. If you look at two or three things that we are seeing as green shoots, one, the fact that overall disbursals are going up. Two, we are seeing productivity of our businesses, especially across the country is going up. We did, you know, a change in platform, et cetera, and therefore, the impact that we had initially foreseen, we have gone past that. So what we see right now is steady recovery. I personally foresee that over the next quarter, we see even stronger growth coming back, because the underlying drivers of the business are looking reasonably strong now. Just to put some numbers to it, the run rate has moved from INR 200 crore per month to INR 550 crore per month already. From here on, as company said, Q3, Q4, we get to... We should see a significant growth uptick from here on. Got it. Okay. And, secondly, just in terms of your 3.5% expense ratio guidance, is that for FY 2025, 2024? If you could just remind us, please. This is for FY 2024. ... Okay, and then in 2025, we expect that to go down? 10 basis points. But we'll communicate that in Q4, for you. Okay. Okay, this is helpful. Okay, thank you all. Thanks a lot. Thank you. Before we take the next question, a reminder to participants to please limit your questions to one per participant. The next question is from the line of Param Subramanian from Nomura. Please go ahead. Yeah, hi. Thanks for the opportunity. Just one question on the, if you could remind us the accounting for the CGFMU, recovery, INR 1,600 crore, how it will flow through to the P&L. Will it just reflect as recoveries and upgrade with, minimal impact to the P&L? Is that understanding correct? No. So, the entry will be the same as in when it comes, what was for INR 916 crore, which means this money has to be parked into a separate account as liability, and that account can be treated as part of the provision cover, which effectively means your net NPA comes down. Okay, and your PCR moves higher. Without any direct impact to the P&L, say, if it comes from Q3, it will not reflect in a direct impact in the P&L, right? Yes. Okay. Okay, that's it. Yeah, thanks. Thank you. Thank you. The next question is from the line of M.B. Mahesh from Kotak Securities. Please go ahead. Hey, hi. Yeah, just one question. Are you able to do any form of analysis of the delinquent borrowers if they are able to get access to any other form of credit with other MFIs? Sorry, can you repeat the question once again? Very difficult to check that. I mean, You can do a scrub, right, on the... Whenever the- So, if we are finding out anyone from the credit bureau, automatically their credit score has come down, so they are not eligible to get the funding from us. Because we have been introduced the credit score for the Sudha Credit is the one. Sir, typically, most of the MFIs today do not, do not give any loan for anybody who has defaulted in the other financial company. So anybody who is into NPA with us will not be given a loan outside, and similarly, we do not do that. There's a code of conduct that is signed by our SRO body. So to answer your question, no. Okay. Because the problem has been that the delinquency that we see in your book is completely at odds to what we are seeing outside. So just trying to understand what explains that consistent divergence in performance that still exists today, when every evidence suggests that on the ground, things have improved. So where is the miss that we are consistently getting on being surprised on the asset quality numbers? No, so we discussed this last time, right? As an organization, we have tightened our policy in terms of people eligible for the new loan. Whereas at the industry level, we see more of a business as usual and loosening requirements vis-a-vis the COVID time. So that could be one. And in an unsecured loan, you know, just to give you an example, today, our policy says if a customer becomes NPA and they repay the loan, we will wait for 90 days before we extend a new loan, and these 90 days we will track their CIBIL and see their track record outside Bandhan. So these kind of policies are not there outside. That could be one of the reason. You know, it's unless you have a detailed survey, very difficult to take point. But if you would also look at, DPD from 1 to 180 and then 180 plus as well. If you go into those two breakups, you may not find too much of a difference. You may find a difference between maybe from a 1 to 180 number. 180 plus should be pretty much aligned with all the other companies. Sorry, just to clarify, Sunil, on this point, when the borrower knows that the risk of not getting a fresh disbursement is high for the next 90 days, and there is an availability of alternate channels of credits who have started to disburse loans, why do you think that borrower is not utilizing the facility and risks a no disbursement scenario for the next 90 days, or probably much higher till the time he repays his dues? Will feel that way and will act accordingly. But ultimately, I have to bring that credit culture back. So what is required to do that? There has to be some tough decisions to be taken to bring back that credit culture. Okay, sir. Thanks. Thanks for this. Thank you very much. That was the last question. I would now like to hand the conference back to the management team for closing comments. I want to thank all the participants in this investor call for posing us the question and listening to us and giving us an opportunity to answer the question. We look forward to interacting with you more as we progress. And some of the queries that you posed, we probably could not find the specific numbers. We can take those offline, because we'll be ready to sort of take this question and answer. And on behalf of our founder and CEO, Mr. Chandra Shekhar Ghosh, the entire management team, I have the pleasure to wish you all the best for Durga Puja and the festive season. Thank you. Thank you to all of you. Thank you very much. On behalf of Bandhan Bank, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.