Ladies and gentlemen, good day and welcome to CSB Bank's Q3 FY25 Earnings Conference Call, hosted by Yes Securities. As a reminder, all participants' lines will be in 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shivaji Thapliyal from Yes Securities. Thank you, and over to you, sir. Thank you, Faisal. Good evening and a warm welcome to all those who have joined the call. The CSB Bank management is represented by Mr. Pralay Mondal, Managing Director and CEO, Mr. B.K. Divakara, Executive Director, and Mr. Satish Gundewar, Chief Financial Officer. We specifically thank the management of CSB Bank for giving Yes Securities the opportunity to host their result call. The management will first be making some opening remarks, after which we will throw the floor open for questions. I now invite the management to make their opening remarks. Pralay, over to you. Thank you, Shivaji, and good evening to everybody on this call. This is regarding the Q3 performance of CSB Bank. But before that, a word on the economic scenario, especially because the world is a volatile place right now, especially in terms of financials. So just a quick summary of what we think is the global scenario. So after the U.S. elections, markets globally have reacted to a stronger dollar and probable sanctions on U.S. imports contributing to inflation. A concomitant sell-off has happened in Indian equities by FDIs. The resultant depreciation of the INR, along with the RBI's effort to contain volatility, has caused a repeat liquidity deficit. The RBI has already taken necessary steps to address this, including a 50 bps CRR cut in two phases earlier, and the announcement of OMO long-term VRRs and INR swaps yesterday to inject durable liquidity to the system. RBI has also revised its growth estimate in the last few weeks to 6.6%. While the MFI space shows signs of overheating, rural and government consumption are picking up. With inflation pulling in at 5.22% in December gives the RBI and the Ministry of Finance room to take further steps to inject liquidity and boost economic growth. Under the circumstances, the chances of the RBI cutting the repo rate are evenly balanced. With the new U.S. president and dollar index at an all-time high, we expect pressure on emerging market equities and currencies to continue for some more time. However, with the recent steps taken by RBI and its intent to address liquidity issues, we expect liquidity to improve this quarter along with the continued softening of yields. On CSB specifically for this quarter, key highlights. On the profitability front, net profit of 152 crores for the quarter, marginally up YoY, and QOQ improvement is around 10%. Operating profit of the bank is 221 crores with a growth of 13% and 10% of YoY and QOQ basis. Other income registered a 75% growth on YoY basis and 10% on sequential quarter basis. Other income constituted 19% of the total income, which is a significant improvement compared to how the bank used to look a few years back. Cost-to-income ratio marginally improved compared to Q2 level to 62.9%. It was 65 plus last quarter. NIM could be sustained above 4% both on a quarterly and on quarterly basis. Despite the tight liquidity conditions and higher interest rate costs looming large in the system, NIM for the quarter stood at 4.11%. ROA stood at 1.52. The bank is holding the contingency provisions intact and is continuing with its accelerated loan provisioning policy. I'll talk about it a little bit more when the questions come on contingency provisions. On the liabilities front, we all know that the markets are going through a difficult situation on the liabilities because of the negative liquidity. We had a reverse deposit growth of 22% YoY amid a slow-paced industry growth of around 10%. CASA grew by 7% YoY, and CASA ratio stands at 24.07%. We complemented our funding with ECB borrowings and refinanced based on cost considerations, which helped us also in maintaining LCR at a comfortable level. We ended our LCR somewhere around 138%, but average LCR was around 119%, which was marginally higher than last quarter. On the asset growth, net advances growth of 26% YoY, which is more than 2X times of industry growth, which is somewhere around 12%. Gold portfolio registered growth of 36% YoY, other retail by 32%. SME growth was 29%. And I think on the corporate side also, we are starting to pick up really well. Though it reported a growth of overall 30% on the corporate book, but the reason it is shown only 5% is because of the liquidation of the DA portfolio and few exits we opted for as part of our coverage strategy and risk appetite. But if you take out the DA portfolio exit and some of the exits which we took deliberately, the fresh disbursement on the corporate book, which should be seen in the next quarter and next year, that will show up in the top line. The growth as well has been significant on the corporate side as well. What it means is between retail, wholesale, corporate, and SME, all are showing organic growth pretty well. On the asset quality matrices, slippages have been contained effectively and recorded a lower NPA ratio sequentially over September quarter. GNPA and NNPA ratios for the quarter were at 1.58% and 6.64% against 1.68% and 0.69% for Q2, which is a sequential improvement. PCR now stands at 60.12% without TWO, which is a slightly marginal improvement over last quarter. Eventually, we want to take it up to 70% at some stage. The bank is holding a provision buffer additional of around INR 181 crores over and above the regulatory requirements. This is where I would say that we continue to hold INR 105 crores of what we originally had provision for COVID, which later on we moved into contingency provision. And in spite of that, a fairly large chunk of that was due to one account we had provision. That account is now exited. Still, we hold that against the other accounts as a provision. So this is the kind of conservative policies which we do. And that provision was INR 34 crores. So effectively, in spite of the exiting of that account of INR 34 crores, we continue to hold in contingency provision. On a capital base, CRAR 21.08%, Tier 1 ratio of 19.73%. Of course, this will improve when the profits come in at the end of fourth quarter. Low proportion of risk-weighted assets compared to industry, marginally higher than 40%. Shareholder valuation side, book value per share is INR 236. EPS for the quarter is 34.68. ROE is 15.28%. So you can see most of the guided parameters other than NIM we have sort of achieved this quarter on almost all the ratios. Distribution, we have a network currently of 807 branches and 777 ATMs as of 31/12/2024. We have added 34 new branches during the FY, and part of the branch specialization, merged six branches during the year. The rest of the branch expansion as planned will happen this quarter. In conclusion, I'd like to say that we had a decent quarter both from deposit and advance growth perspective, registering a growth of almost 2X times over the industry in both sides. Though the advance growth outpaced the deposit growth, the gap was effectively bridged through diversified funding sources such as FCY borrowings, refinance, etc. We are well placed in terms of liquidity, capital ratios, and have sufficient room for further growth. Coming to profitability, while our NII growth is relatively flat, the operating profit grew reasonably well both on a YoY and sequential basis. Other income recorded a robust growth of 75% on YoY basis, and other income to total income has improved by 5% from 5% two years back to 19% now. Net profit recorded a growth of 10%. The proactive decisions taken in terms of slowing down the growth in unsecured loans, MFI, etc., is helping us with minimal impact compared to the industry. I'm sure there will be some questions on this later on. I'll delve into the details. Our NPA ratios are lower on a sequential basis. We have been generally able to hold on to our guidance on growth ratios and asset quality, as I said before. This can be taken as an indication that our compounding execution story is playing out as per existing effective issues. In the current quarter, the credit growth will be largely dependent on how the liability growth evolves. For smaller players like us, where the deposit franchise is yet to be fully built, and we are working on that, the deposit mobilization at reasonable cost will have to be overmanaged, and we have clear plans there. On the tech transformation side, this will be a big year for us. I'm talking about FY26. It will be a big year because post FY26, we'll almost have nothing left in terms of transformation of the bank from a very average tech capacity to our probably best-in-class tech capacity in this next financial year. There's a lot of work happening on that front. Last time, our CIO, Rajesh, had given a briefing on this on the call. So if you have any questions, we'd be happy to answer on that front. But we are completely on track in terms of what we want to do. Our CBS migration, along with OGL offsets and some of the other pieces which we are putting together, is expected to be completed in Q1 FY26, stabilized by Q2 FY26, and leveraged from Q3 FY26 onwards. So this is a big, big development for us, and we are all excited to look forward to that. Our distribution strategy is working well. Once the products and processes stabilize post CBS migration, the distribution will look at leveraging more opportunities leading to granular growth, helping the bank to deliver consistently in line with the stakeholder expectations. As we talk, we have also started planning our retail assets franchise because that is the one franchise which we deliberately didn't pick up so far. A, because we saw the markets not seeing some stress. B is because we are not fully ready in terms of liability acquisition. The entire systems and processes have to be in place. So now that we have visibility of the tech piece, tech transformation in the next six-to-nine months, we have started our retail assets transformation journey now, which will be visible in the next one year, and we can talk about it as we go through the call. With that, I hand over the call back to the coordinator. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Suraj Das from Sundaram Mutual Fund. Please go ahead. Yeah, hi, sir. Thanks for the opportunity and congratulations. Sorry to interrupt, Mr. Suraj. I would request you to please use your handset. Yeah, is it better? Yes, sir. Yeah, so thanks, thanks, sir, for the opportunity and congratulations on a good set of numbers. Couple of questions. Sir, on the yield side, so on a QOQ basis, if I see your yield has fallen by around 15-20 basis points, and this is despite the growth being higher on the QOQ basis on the non-corporate segment on gold loan and your retail loans, and your gold loan yield is anyway much higher than your overall blended yield. Sir, what is causing this fall in yield on an overall basis, if you can explain? Yeah, thank you, Suraj, for your question. You're right that the growth in gold loan has been 36%, which is higher than the bank growth, which is 26%. At the same time, we grew on retail as well as in SME, reasonably close to either 30 or higher than 30. And what I said, I think the critical part is that wholesale, if you take out the DA portfolio and take out the LCBD and that one or two accounts which we exited, which are on the very high yielding basis, then they have grown by 30%. Okay? So what it means is that what we are putting on now are low risk and hence necessarily not very high yielding business, especially in a cycle like this where we want to be careful. And even on the, if you look at the details of our assets group, our degrowth has happened in three, four products, which are all high yielding products. two-wheelers, we have degrown. Personal loans, we have degrown. Basically, unsecured, we have degrown big time. MFI, we have degrown. And agri, we have degrown. All these businesses are somewhere anything between 12%-16% kind of a yield, okay, or even higher in certain cases. So given that perspective, we decided to de-risk our portfolio around a year back, and that is exciting as we are going, leading to some of the high yielding portfolios moving out. In wholesale itself, one account itself which moved out was more than INR 200 crores, which was yielding us close to 13%. It was not an NPA we are earning well, but as a de-risking strategy, we have moved that portfolio out. Okay? So when you look at all this, the prudent call which we are taking is, be it retail, be it gold, be it SME, or be even SME, our yields have remained kind of similar as it was before. So we are playing in that range between wholesale to the highest yielding 90%-95% of our incremental portfolio is between 8% to less than 12% because gold, our business is less than 12%. So that's a conscious strategy saying that yield maximization or NIM maximization in an environment where there's enough risk in the system is not prudent. And anyway, based on our board guidance, we are looking at businesses which are long-term franchise building and just not NIM-accretive. So that's the reason we have done this. But yield has gone down slightly across all the products, almost all the products we had lower yield than before. But more importantly, the NIM compression has also happened because of higher cost of funds and also because of that penal interest which we lost around 25% that continues every quarter, right? So while part of that we are getting as a penal charges, but that's more or less the reason. And in spite of the fact we have managed a 4.11% NIM at this stage where things are not the most positive in the environment, I think we are quite happy with this risk averse kind of strategy which I've laid out. Sure, sir. Thanks for the elaborate answer. And sir, on the gold loan piece, in terms of reporting numbers, have you changed any classification? Because last time PPT versus this time PPT, I think in terms of numbers of the gold loan vertical and retail, I think there has been some reclassification in terms of numbers, both on AUM and disbursement numbers. So I mean, has there been any reclassification? And if yes, then if you can explain that also. No, there has been no change compared to last quarter. I don't remember which quarter, but there is some change which we had done two, three quarters back where because of regulation and other reasons, we had moved some of the businesses around INR 1,500 crores, if I remember it correctly, from gold loan to loan against securities. And we disclosed that in the call as well as in our conversations. So that we did not because we wanted to move from this side to that side, but because of some regulatory reasons, we didn't classify them as gold loan. But the collateral security is gold, but they are classified as loan against security, which was INR 1,500 crores. But nothing changed this quarter. It happened, I think, last quarter itself. Okay, sure. No, I was actually looking at slide 17, which is the disbursement number. I think last quarter in the gold loan vertical, you mentioned 6,944 crores was the disbursement. But this quarter, I think 2Q FY25 number has been reclassified to 5,752. 6,752. 5,752. Second quarter number, I am seeing. Oh, second quarter number has changed compared to last time, is it? Yes, yes. That could be that loan against securities, which we would have in the book, we would have changed it, but in the disbursement, we might not have changed it last time. This we would have changed it this time when it came to. But nothing has changed within Q2 and Q3. So maybe last quarter, the disbursement number on loan against securities, we have kept it under gold loan. But in the book, we moved it into portfolio. But we probably forgot it last time in the listing. But nothing has changed this time. Sure. And sir, is there also a reason that of this number of accounts in the gold loan business has also fallen from earlier reported number of around 7 lakh to now 4.8 lakh? Is that the reason also, I suspect? Haha, quite possible, and so I told you that it's around INR 1,500 crores which have moved into retail from the because of loan against security. It could be the reason, yeah. Understood, sir. And last two questions, sir. One, just a clarification. This CRAR number does not include the interim PAT, right? So, CRAR number, because of the three quarters, it is a limited review by the statutory auditors. And actual statutory audit, it is kind of at the end of the year. So after four quarters, the profit number will get added into the CRAR. Understood. And the last clarification is, sir, in the contingency provision that you were talking about, 100 crores, is that included in the PCR or that is over and above PCR? No, no, no. Contingency provision is not in PCR. Sure, sir. Thanks for answering all my questions. 105 crores is not in PCR. I mean, we could have easily moved that INR 34 crores into. Due to no response from the current participant, we'll move on to the next participant. The next question is from the line of Sonal from Prescient Capital. Please go ahead. Hi, sir. This is Sonal. May I have my audio? Yes, yes, absolutely, Sonal. Good evening. Good evening, sir. I hope all is good. I wanted to understand the behavior of customers in an increasing gold price scenario. So typically, as these products, the gold product is low in tenure. What happens for loans which basically reach their termination in an increasing gold scenario? Do typically customers prepay the loans and they take a new loan for a higher cover? And how do you handle LTVs or these kinds of loans? Just trying to understand that as we speak, yeah. No, I think it's a great question. So there is no one answer to this. There are all kinds of behaviors. In a retail scenario, not everybody does so much of calculation and does things like that. Typically, what happens in a gold price rising scenario, some part of the LTV starts coming down. The reason that LTV starts coming down, and as we are talking that when it was gold price was low, came down, and then it went up, our LTV has moved down from 74% to 70%. And that itself proves that obviously not all customers do that because LTV is going down because gold loan price is going up. At the same time, there will be some customers who will do this by which they will want to take benefit of the LTV and hence can close and open a loan. There are a few customers like that and we have no problem with that because once they are opening, we'll get a processing fee again. Okay? They are willing to give that because they are getting a higher LTV and even if you say no to it, they'll go to the next branch and do it of another bank, so we don't have a choice. We have to do this. The third one is there is a third category also where they sell the gold, okay, or they take it away. The reason for that is that they see the maximization which they can do and they don't see the price going down or whatever their limited view is what they see, so when I see a sudden spike in gold price, I sometimes see that we lose some customers or some takeout happens from the portfolio itself. So all kinds of retiring happens. So not necessarily when gold price goes up, business goes up immediately. It goes up after a while. Initially, sometimes it falls as well, which means that some customers exit. The fourth type of customers who are on the higher LTV, we exit them also taking this opportunity. Suppose somebody is in an 85%-90% bracket, then we say this is a great opportunity. And then we also exit them saying that pay it and go so that we can bring our LTV. So a combination of four, five things happen. It's a very dynamic scenario. But in general, with gold price going up, LTV comes down. So what would be your BT out equivalent in current quarter or in general when gold prices are up? What would the number be? What number? Yeah, BT out. I don't have that number. And sometimes we'll not even know BT because it's not like a BT where people will come and take it out like that. They will just take the gold and go. Where he's going, what is he doing, whether he's going to another bank or he's selling it, we don't know, or he's consuming it, we don't know. But generally, in both scenarios, our renewals are similar. Okay? So we have not done that kind of analysis at how much BT out because it's very difficult to do that. It's a very physical business, right? We don't know which one is BT and which one is taking out. Got it, sir. And any guidance on LTV as we speak? Because just as a precaution, because the gold prices are inching up and the outlook is weak. So any guidance on LTV? I mean, whether outlook is weak or not is debatable because whenever I read various things, almost 70%-80% people say that gold prices still can go up internationally. But that's for another debate. I mean, we are not into that business of predicting gold price. So what we do is since the tenure of the loan is low, generally tenure of the loan is low. So this LTV management through prices does not happen that much. But generally, I can say that we hover anything within 68%-75%. And 75% also because part of our business is also equity portfolio. That's why there we can go up to 85% as per approved board policy. So given that, it goes closer to 75%. And generally, it remains between 70%-75%. In that range, it plays out. I understand, my sir. I'll come back in a bit. I have no questions. Sure, thank you. Thank you. The next question is from the line of Shreepal Doshi from Equirus Securities. Please go ahead. Hi, thank you for giving me the opportunity. My question was on LTV only. So what is our disbursement LTV in Retail Gold and in Agri Gold Loan? Sorry, what is the question? We didn't get you. So you want to break up between Agri and Normal Gold Loan, is it? No, what is our disbursement LTV in Agri Gold Loan and in Retail Gold Loan? Your voice is not very clear. I can't hear you properly. Mr. Doshi, I would request you to please use your handset. Sir, my question is, what is our disbursement LTV in Agri Gold Loan and in Retail Gold Loan? Oh, I see. LTV, as per regulatory norms, LTV in retail gold loans has to be below 75%. And agri, there is no such thing like that from a regulatory perspective. But generally, as per our internal guideline, we try to keep it within 85%. And when we say LTV, we include the bullet interest or interest included in this. And hence, that is a conservative LTV calculation we do. How much for this thing? On average, it is well below 70%, obviously, for normal. And agri will be somewhere around 75%-85%. Got it. And sir, just one more question here. Within the gold lending portfolio, there has been a sharp decline in number of loan accounts. So just wanted to understand what is the ticket size that we are focusing on in the retail and in agri loan? Is there a thought process on ticket size or we are open to taking any sort of ticket size? So typically, what has happened is now I've understood the previous person's question also. So if you look at it, this sharp decline is between Q3 FY24 and Q3 FY25. Okay? So this is year of the compliance. It's not quarter on quarter decline. I said already that in previous quarter, we had moved 1500 crores from the gold loan portfolio to loan against security portfolio because of some regulatory and other reasons. Okay? So because of that movement, those 1500 crores corresponding accounts would have moved from gold loan to this thing. So the collateral is gold, but it is classified under loan against security, which has moved under retail, which we disclosed last quarter as well. So this also answers the previous because I didn't have the number in front of me. So we didn't make a mistake last quarter. It is basically year-on-year degrowth. Okay? And year-on-year degrowth happened last quarter because we moved our chunky portfolio of 1,500 crores from gold loan to loan against security because we didn't want to take the benefits of gold loan under that. We moved them under loan against security. Got it. Got it. So this is LTV. Also, just one last thought. So in gold, what would be the average ticket size for Retail Gold and for the Agri Gold Loan? I think our gold loan ticket size is somewhere between one lakh to two lakhs. Okay? And I think ticket size are almost similar. Got it. One last question, sir. Slightly lower, but it will be between INR 1 lakh to INR 2 lakh average. Yeah. Got it. So just one last question. As a policy or as a strategy in the gold financing, do we try to maintain 75% LTV throughout the loan tenure or only at the time of disbursement we keep the upper cap of 75 and then we will not really track it during the tenure of the gold loan? No, no, no. Gold Loan is a very complex business to run on a day-to-day basis. So it's not like that. So before that, let me answer the other question what is. Just came to me. I'm forgetting. But on the ticket size which you talked about, I certainly remembered, that now as per RBI regulation, okay, Agri Gold Lo an cannot be below 2 lakhs. Okay? Because you cannot take any more Agri Gold Loan with security below 2 lakhs. Previously, this used to be 1.5 lakhs. And hence, previously, Agri Gold Loan could not be below 1.5 lakhs. Now it cannot be less than 2 lakhs. So anything below 2 lakhs, we are taking under general category. And above 2 lakhs, we are taking under Agri Gold Loan. So Agri Gold Loan has to be necessarily above 2 lakhs as per regulation. Coming to your question on LTV management, yes, while it is done at the time, but RBI regulation is that it has to be through the tenure. Okay? And hence, we have to keep monitoring it. And whenever it is going above 75% or above whatever limits are set by RBI at any point of time, we have to go back to the customer and either take more gold or take more money to reduce the LTV. That's done diligently in the bank. Having said that, that's why we keep some buffer in the system so that we don't have to keep going for INR 100 upon INR 100 each. So we manage it accordingly. But the rule is that you have to be through the whole tenure of the book. You have to be keeping below 75% for normal gold loan. For agri, there is no such thing. Got it. So that is only for the retail gold loan, not for the Agri Gold Loan. Because I mean, I cannot give this thing, LTV norm. Yeah, yeah, yeah. Just to follow up there. So we would have a bullet repayment option for agri, whereas for retail gold loan, it will be typically year-on-year structure, right? Now, bullet repayment has nothing to do with agri or non-agri. We can have bullet repayment on both because we are calculating the bullet repayment for the LTV calculation itself. For our internal reasons, we generally like to keep it within 85% because that's our own way of managing risk. Within that, we keep the bullet repayment within that 75% or 85%, whatever we call it. Got it. Got it. Thank you so much for answering all my questions. I'll be back to the next one. Thank you. Thank you. The next question is from the line of Mona Khetan from Dolat Capital. Please go ahead. Yeah. Hi, sir. Good evening. And thanks for taking up my question. So firstly, on the corporate book, now that I believe the evergreen corporate book is nearly done with, I was just looking for some color on the book, like where is our average ticket size as of now on this book and what would be the average yield and also maybe how many exposures are above 100 crores at this point. And where would you like to maintain the average ticket size at in the corporate book? So, what we have given in public domain is our this thing. We can share that broadly our segment is just give me a minute. So we vary between 9-9.5, generally the average, depending on which quarter we are talking of. Okay? And on the rest of the questions that you're asking is very much detailed. We generally don't share that level of detail of how many customers are above 100 and this thing. And given that perspective that our overall book itself is so small, it's not that too many customers will be above 100 and 200. Okay? But we don't have that data in the public domain, so we're not able to share it. Sure, but some color on average ticket size will really help or the range of your ticket sizes. Okay. I'll tell you. I can give you a roundabout answer on this. So our norms within the bank is that anything above 50 crores goes to our management committee. And for better rated companies, above 75 crores goes to management committee. Okay? And most of our corporate loans goes to management committee. Okay? Then rest you can deduct. Okay. Got it. Got it. Secondly, on the sell side, so again, this quarter, we have seen a very strong growth as you highlighted. So just want to understand how much of it is retail granular fees and is there some component of corporate fee as well in this thing? And where would this ratio remain on the fee side? And could this sort of growth trend continue on the fee side for the first half of this year? Thanks. So you have seen that our fee growth has continued and has been consistent. We are now around 19%-20% of our overall income is coming through fees. Now, that's also a ratio. I mean, because NII has also come down as well. But that's a ratio still. On the growth, yes, we grew by 70%. The core fee, whatever we define, the core fee, which is scalable, granular, and scalable, is around 15% of that. And another 4% depends on things like the SME Commission, some one-off here and there, etc. So 4% is one time. It's not even one time. Every quarter we get it, but it's not business-linked kind of a fee. It's not granular kind of a fee. So on that, I can tell you that 15% is very clearly granular fees, which we have a compounding growth story. Broad heads are processing fee, commission upon bancassurance, and this thing. Some credit card-related fees and some non-proc side, some TPS commission. These are the broad larger lines which are there. Trade finance TPS is also there. So there is no chunky corporate fee as such out there. Mostly it is granular and mostly scalable, which you'll see in fourth quarter also our fee business will be good. So this entire INR 200 crore, there is no corporate component, but there's only 4% of the fee. That's probably one time. Not one time. Like TPS commission. TPS. Got it. Got it. Got it. One of those income, which is the largest income in that 4%. But that TPS can come every quarter also. We can consider them as core fee. TPS is not your business fee. That's why I don't call it considered core. Got it. And just finally, on the gold loan book, so any impact on the growth that you are anticipating in view of alignment with RBI norms in the upcoming quarter? I had responded to the question last time, so I'll repeat what I said. 30th September circular, we had done so much work on our gold loan portfolio last one or two years that we could have implemented the 30th circular in the next seven days itself. Okay? Because we are almost ready on all the points which have been communicated there. Only one part of that is a continuous process, which is how many audits you are doing, what are the operational efficiencies you are creating, what controls you are building on a day-to-day basis. That's a continuous process. Other than that, we are ready with everything. And as of December, we have also communicated to RBI as per their guidance or as per that circular about our compliance to all the points which they have given. Okay? So if it has not impacted us last quarter, I don't see that circular will impact us this quarter or in future. So we are quite comfortable with that. Sure. And what would be the risk weight on aggregate gold loans versus retail gold loans? Is there any difference? Actually, there is hardly any risk weight on gold loan business. So I don't know the difference, but there will be hardly materiality will not be there at all. But what are the risk weights against gold loans? Just to refresh. Mona, overall, the RWA convention on the gold is very minimal because we get a cut-off on the value of the gold after doing a haircut. So after we do a haircut, that is compared to the outstanding. And only whatever is remaining balance of that is risk-weighted. Now, in the overall portfolio also, we always maintain an LTV of 75%. So after doing haircut also, there is no exposure. Generally, we see an excess of the collateral that we are holding after the haircut also. At the overall portfolio level also, the RWAs are very low. The category convention is very minimal on gold loans. Okay. When I look at the one on slide 16, there is a sharp decline in number of gold loan accounts, even as the gold book has grown from 5.2 lakhs to 4.9 lakhs. Yeah. Mona, the previous I don't know. You might have joined a little late. So just to quickly answer this, you remember that last this is last year's same time to this year at the same time, YoY decline in number of accounts. The reason is, if you remember last quarter, we had saw that INR 1,500 crores, roughly INR 1,500 crores of portfolio moved from gold loan business to LAS loan against security for some regulatory compliance reasons. And then we don't classify them under gold loan. Neither we take benefits of gold loan under that, including the risk weight and things like that. So because of that reason, those accounts also moved from gold loan to retail. That's the difference. That happened last quarter. Yeah. So, sir, I get that. So that number was about 7 lakhs, the earlier reported gold loan accounts, which has come down in the new reporting to 5 lakhs. So even adjusted for that, the number of gold accounts were actually smaller year-on-year. So how do I read this? It's based on the new reporting, both these numbers, the year-ago as well as the this quarter number. I'm not giving it. The last quarter when you have seen this slide on the gold loan included that last portfolio, whereas now we have recategorized that last portfolio including in this slide, that that portfolio has been removed from there. No, no, no. Sir, I totally get that. I'm referring to today's this quarter's presentation where you have given last year's number, which is at 5.2 lakh number of accounts. And this quarter, which is Q3, it has fallen to 4.9 lakh accounts. So I'm assuming both these are as per the new reporting, adjusted for the last book. This is exactly what I explained to the previous person also. Q3 FY 2023 and Q4 FY 2025 is one-year gap, right? And this happened last quarter. So obviously, it will show on a year-on-year basis decrease, no? No, sir. So if I look at last Q3 FY 24 presentation, sorry, just let me finish this. If I look at Q3 FY 24 presentation, this number was above 7 lakh accounts. So it has anyway come down based on your new reporting because we have also reclassified the loan book. Same time last year presentation, Mona, to look that would have included the last portfolio. Now we have removed the last portfolio from both the periods. Right, right. So I'm just trying to understand why the decline in number of accounts. That is why she's offline. We are not able to understand the exact thing. So what she's saying, I've understood her question. What she's saying is understand what it is. And that would be the other reason. Let's figure it out. What she's saying is that last year, Q3, this 5.22 was 7. Okay? I don't know. I don't have that number. I have to see myself that number. So she's saying if you have corrected that, that would have been corrected from year-on-year growth. Okay? So let's find out what is the reason. We don't know actually, Mona. I'll check this out. It could be that our ticket size has been up or whatever. We have to check that out. Okay? Sure. Thank you. I'll come back to the queue. Thank you. The next question is from the line of Shivaji Thapliyal from Yes Securities. Please go ahead. Yes. Thank you. My question is, again, on the gold loan market as such, so this RBI advisory that we had seen as of September, and I just wanted to understand what is the early feedback in terms of is there any market share shift going on maybe from NBFCs to some of the regional banks because this RBI advisory is kind of targeted or maybe it is affecting NBFCs more because they are the ones which have not so far properly fallen in line in terms of the processes? Or what is your reading of the gold loan market as such? Thanks, Shivaji. So before that, let me just try and address Mona's question once because I think I got the response. So what could have happened is you're right that there has been drop. The reason could be that because RBI 30th September circular, I think, covered that less than 2 lakh accounts cannot be gold loan anymore because you cannot hold collateral against that. So because of that, we could have exited, but it didn't impact. See, what typically happens is such small ticket may not impact your overall portfolio. Or some of those customers could have brought in larger value and come under this thing. So because of that, some numbers would have exited because we couldn't have classified them under gold loan or aggregate gold loan anymore. If we didn't give it as an aggregate gold loan, they would have exited us because we will not get the LTV what we want. Given that perspective, there could have been some exits because of that. That's what I'm guessing, but we will do a more detailed analysis of this question. This looks to be the most obvious reason because we did exit a lot of accounts from our LTV from our below two lakh collateral perspective. This happened this quarter, so it could be that number. Now, coming to your question, Shivaji, see, we do our business, so we don't really necessarily try to capture market share based on some regulatory reasons or some arbitrage here somewhere or this thing. So we just follow our execution, and our market share is not that big that if there is an impact like that in the market, we'll get a lot of business onto all this thing. So frankly speaking, the answer is I don't know. Okay? But what we know is our business has not been impacted because we were ready with most of the measures which were taken, and we have engaged with various measures which we have taken in our various supervisory reviews and everything like that. So from that perspective, we are pretty comfortable that these measures which have been prescribed as of 30th September have not impacted us overall as a business, which we show in the fourth quarter. Yes. For example, what Mona was asking, that some accounts could have exited because they are small ticket accounts which are classified as aggregate, they may have exited. But that won't have impacted the portfolio because on the portfolio side, we have grown. So like that, some small little impacts would be there. But otherwise, broadly, I don't think positive or negative, we don't look at it. We just focus on our execution. And in the process, what business comes, comes. We don't try to find that gap in the market and try to address that. Those are too much strategic thinking. We just focus on execution. Thank you. Thank you. The next question is from the line of Mr. Pareekshit Sahewala from Knightstone Capital. Please go ahead. Am I audible? Yeah, brother. Yeah. Yeah. Thank you for the opportunity. So my question was on the tech side. So I understand that the tech transformation is going to take something like two, three years. But in this phase, how will the cost-to-income look like? So while this transformation happens, the OpEx has been already incurred, or will it be incurred over the next two, three years linearly? So how will the cost-to-income look like over the next two, three years while this transformation is taking place? Yeah. No, great question. So typically, the way it happens from this transformation, whatever can be taken as CapEx is taken as CapEx. Not everything can be CapEx. A lot is OpEx also. So typically, our tech spend has been somewhere around 8-9% of our overall OpEx. And we believe that some of these CapEx, when they move to OpEx, along with that comes AMC also, which comes as an additional OpEx. When we do that calculation, we look at the TCO, and we look at how it impacts our cost-to-income over the next five years because CapEx generally will be for five years. So given that perspective, we have seen that it will remain in that range of anything between 8-10% of our overall OpEx because once we move to CapEx to OpEx, AMC comes, and it all neutralizes. Finally, we have to keep our tech investments planned in our between 8%-10%. We are somewhere around 9% right now. Got it. And this will remain in the 8%-10% range till FY 27, I'm presuming? Probably forever. We don't know. Okay. Okay. And next question was on the retail side. So you said that you have degrown or been conservative in the unsecured part. So which side of the segment you are looking to grow? Is it LAP or affordable housing, or are you looking to grow in the unsecured as and when the scenario changes? See, the way we are doing right now is, if you see, we are not going that much in retail except for a few strategic businesses like in CV/CE on strategic segments we are doing where you don't get that kind of a yield, but we want to be playing in that space. So CV/CE is growing. LAP is growing because that's a segment which will continue to grow forever if you have, it's like SME business, right? So wherever we have visibility of the end use and customer collateral, everything, we do those businesses more aggressively. We try to do business through our in-house channel. We don't believe too much into DSA businesses. Though there are some DSA businesses we're doing in LAP, but we will gradually decrease it over a period of time. But the roadmap in the long run is not products and trade. Roadmap on the long term is we will have all businesses and all products we'll have. Based on the liability franchise and the customer acquisition we build in and around the branches, we will cross-sell and build customer acquisition and customer cross-sell and customer deepening as a part of the wallet share. That's the way we want to build our retail asset business very, very clearly because we don't need retail asset business to grow to build our 25%-30% growth. We want our liability franchise will not grow if we do not give them payment products, if we do not build wealth businesses, if we do not build retail asset businesses. That's why the entire book of products has to be there. That's what we'll do. Growth will come from LAP, CV, CE as we grow auto inventory funding because we want to have a visibility of the end use and the end collateral. Only when we know the customer well, we'll do businesses like a little more like auto than your personal loans and all of this. That's the long-term plan of the bank. Even if we do this right, because the acquisition will be so huge FY 2027 onwards, that cross-sell there itself will build our retail asset portfolio, which is not on the productive asset side but on consumption asset side. That will go on the existing customers based on a new acquisition we do. That's a clear roadmap and clear strategy laid out. We are starting to build our strategy both on credit collections, products, processes, technology, everything on the retail asset side. The story has just started now. It will take a year for us. We will take off once the entire tech transformation happens, when our liability side of the customer acquisition side of the story starts picking up, and then the retail assets will grow. Got it. That was helpful. And sorry for repeating the question, but again, on the cost-to-income side, so you said that you will continue to incur around 8%-10% OpEx. So how will the cost-to-income trajectory go below 50? It's not clear to me. Can you just explain that? Yeah. I'll explain. That's on the calculation. I'll explain. So I think if you have to run an efficient bank and if you have to actually bring down your cost-to-income, you have to incur 8%-10% of your technology cost because you have to automate everything. Because people, productivity, all of that stuff will happen only when we are making the person productive through on-the-go, mobility on his hand, better customer service. Why should the customer come to us and ask for more products? Why will he build more balances? We have three other options in his hand, in his wallet, right? So only whichever happens, whether I'm able to give a better service, I'm able to cross-sell better, I'm able to on-the-go understand what the customer needs, I'm able to do better analytics, I'm having a better turnaround time. All of that stuff will require that kind of a thing. So actually, investment in technology prudently will help us in having a multiplier effect on productivity, which will reduce the cost-to-income. What it effectively means? Business per employee will go up. Okay? Productivity per employee will go up. All of that stuff will go up, and we'll have more happier and more at a customer level, profitability will be much higher. So that's the way we want to build up the franchise. This is a classical method where we are taking names, larger banks and more successful banks have done it. So we are not doing anything so special. We are just following the best practices in India as well as globally. I think 8%-10% technology spend prudently is a great strategy by reducing product. So if you have more products per customer, okay, whether it is the wholesale side or on the retail side or on the SME side, automatically your OPEX, I mean, operating expense comes down because of cost of servicing and cost of manpower comes down, right? So that's the way we also want to build the franchise. Got it. And just to put this another way, so are there any one-time expenditures which you have taken this year or are going to take next year? Not that I'm aware of. Most of our heavy lifting is sort of done now. Now we will see if we clean out a bit through the CapEx to OpEx too only primarily. There's no one-time expense. All our leadership is in place right now. So we don't have any more leadership to be hired in the bank right now at a senior level. So most of the heavy lifting has been done now. They have to deliver. Okay. Thank you. Those were all my questions. Thank you. Thank you. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Good evening. I wanted to better understand your medium-term sort of an ROA. So the way I look at it is that right now you are very heavily focused into gold loans. And there you are incurring minimal credit cost. So your credit cost is like 0.1% per 9M or something like that. So now as you grow and you increase your mix into other products where as of now your yield is lower, so yield is probably going to come down overall because your gold loans are at a higher yield. Your cost-to-income is sticky and looks like it will remain at the same level. And your credit cost is also probably going to increase as you grow into other products. So what are the levers you are seeing to increase this ROA if at all you have the expectation of increasing, or do we want to sort of feel that this can be maintained also? Yeah. So I'll try and explain this. So I think our ROA, what I've told is somewhere around 1.5-1.8 in that range. I think given the overall environmental challenge right now, we'll stick to somewhere around 1.5-1.6 at this point of time. But eventually what will happen is it will come down and it will start going up FY 2028 onwards again. I'll tell you how. So at the same time when gold loan eventually by 2030 is slated to be around 20%, okay, of the portfolio, which is around 25% right now. The reason it will happen is along with gold loan, which is low on loss, high on yield, okay, operating cost is also very high. One of the reasons our business per employee, which is eight, which is one of the lowest in the industry, is also this gold loan business. One of the reasons is that most of our business gold loan is also apportioned to the branch cost, etc., because we are not doing some of the other businesses, etc. The fact is that wholesale business, our group head in wholesale, Manish, tells me that he can do 2% ROA business. Okay? So it is possible that every business, when I was doing my retail asset business many, many years back, I used to do ROA business, which is much higher than 2%. Okay? So the reason the way it happens is that one customer has to have multiple products. Okay? So in wholesale, for example, you will get in an account or get into a relationship at maybe 8%, okay, or even lesser. But then you build the entire ecosystem banking there, cross-sell and other flows, other businesses, collection accounts, so many other things, and then through supply chain you'll get more business. In the process, over at your account level, you will get ROA. Similarly, in a corporate salary business, which we don't do, by the way, here yet, but we'll launch that once this thing is done. Corporate salary business, you don't make money through liability, by the way. You make money through cross-sell on fees, on assets, cars, and all of this stuff. So the banking business is not about a single product business. Unfortunately, we have become a product company because we are 50% gold loan, 35% gold loan. Eventually, the journey, the whole reason of investing this kind of a thing into technology and leadership and distribution and customer acquisition, all of this, is to move from a kind of a single product to product business to a multi-product because then you have a book of products to customers, and the whole idea is to get better cross-sell, better penetration per customer, whether it is wholesale, SME, or retail, and then get the ROA up. Also, let me tell you, by end of FY 28, 29, once this thing has gone live and this thing is chugging along very well, that's the time we launch wealth business. Wealth business will make a lot of money provided you start addressing the medium to top end of the pyramid, okay? There is a lot of money to be made there as well. Most of the retail banks, 20% of the customers contribute to 80% or 100% of the profit of those banks, okay? We are nonexistent out there. We will build those portfolio also by FY 2029 onwards and start building that. So there are many levers to create ROA tree. And we have done it in the past. It's not that we have not done it. We know how to do it. But it's difficult to have a visibility right now because we are seeing CSB as a single product kind of a bank, which will not be after 2027, 2028. For building all these new lines of products and businesses, generally, again, for every business, it becomes a multi-year journey where you start with more than 100% cost-to-income, and it will take some while for it to become profitable. Will that not impact your profitability as you want to develop into omni-product and multi-channel sort of a bank? I'm glad you asked this question because this is exactly the mindset of a product company. I mean, you can look at a product company. You can look at a franchise. When you look at a franchise, I'm not looking at a product profitability. I'm looking at a customer role. I'm going to see what did I say in the beginning. My model is I'll give the customer what he wants. I'll not go to a branch and tell him, "Build a auto loan business for me." I'll not go to a dealership and say, "Build auto loan business for me," or go to a branch and say, "We build a personal loans business." That can never be profitable as per my experience goes for the same reason which you're saying, and in a cycle, we will lose that business also. The way we will do it is that all products will be there. There will be a single channel which will deliver to the customer. There will be other support teams, whether it is an asset team or it's a liability - sorry, cash team or something else or a fees team, which will help. But customer will be at the branch level. To that branch man, so the monitoring will be customer-level profitability, not a product-level profitability. As soon as you do that, then you are not invested. Unfortunately, many places I've seen that people work in silos. And in silos, these products take time to break even. But the day they work with customer franchise branches and channels, that's the day you don't incur those costs which you otherwise incur. So we will not incur that kind of a cost in these products and businesses. Everybody else will support the front-end who is supporting the customer or servicing the customer. If we take that model, then that's a product-centric mindset to customer-centric mindset. That's the reason this model is very different. I build this model on my expertise, and this is how we'll work. So I have no doubt about it that our growth will be faster FY 27, 28 onwards because liability will happen because of other cross-sell. Liability also is not a different business. Liability happened because other things are happening, and hence liability is an outcome. That's the way we have to build the franchise. And same thing, I mean, I'm talking about retail because I know that more. Wholesale, Manish, Shyam on the SME side, they also tell me the same thing on SME and wholesale as well. It's the same thing. More we leverage, more we penetrate the customer, more money we make. Even if one product doesn't make money, that doesn't matter. That's the way we'll build. We'll build a franchise model. Today, unfortunately, we are a product bank. That's the reason why even a 1.5% ROA is looking difficult. Understood. And finally, on your margins, so now, if you look at last 12 months, obviously, now there are constraints on the CD ratio, and hence you had to take a lot of bulk deposits, which has probably hurt your NIM. So instead of growing at such a rapid clip to achieve the same result, thereby taking more risk and incurring higher operational cost, would it be better to grow at a lower pace without taking bulk deposits because the end result in terms of absolute profitability would probably remain the same? So no, let me answer that. Again, I'm glad you asked this question. It gives me an excuse to clarify our strategy again. Our strategy here is not to maximize profits. Our strategy is not here to maximize names because three years down the line, four years down the line, nobody will remember what name was in FY 25. Okay? What people will see is what is the franchise we have built. Okay? So if there's an opportunity to do a business, if there's an opportunity to penetrate a corporate account, if there's an opportunity to penetrate to build a market where I can acquire customers, if there's an opportunity to get into SME segment where I want to be, should I stop doing that just because I don't have a liability franchise today? To me, our strategy says, "No, the answer is not that." We have to fund that business which we are building a long-term strategic franchise. But do we want to show business by going to a DSA and doing a personal loan business or some other business just to show a top line? Answer is no. Because of them, I agree with you that if I do that and then to take a high-cost funding, what are we doing? I mean, we are going round and round around the circle. So given that, look at it this way that after all this, also, we have achieved a NIM of 4.11, which is not so bad. Okay? In my entire stint in one of the larger organizations I worked in, it used to be 3.9-4.2 all my life. Okay? So 4.11 is not a bad NIM. Look at our LCR is still 130 period end and 119 average. Okay? Our CD ratio, where a lot of large banks are struggling, our CD ratio is 86%, which is not so bad when we are sitting on a borrowing, which is 12% of our portfolio. Okay? Just think about it, how much liquidity we are sitting on. Why we are sitting on it? Because we don't want a liquidity risk, and I don't want a situation where if Manish and Shyam tomorrow tells me that I want to do this business, I cannot say, "No, no, no, I can't support you from a liability perspective." I have to support him because he's building a franchise. We are building a franchise, and then once we build that, eventually, we'll make a lot of profits out of that based on the relationships which we are building. Our strategy will be different. We are not in the NIM maximization game. We are not in showing top line at this point of time. We are building a long-term franchise, which only we will kind of leverage FY 2028, 2029, 2030 onwards. Our thinking and strategy is slightly larger than mindset. We don't want to play a niche strategy, which I've told many times. And this is not a niche strategy saying that we'll maximize NIM, we'll remain small, we'll do this. That can be also a strategy, but that's not our strategy. Thank you. Ladies and gentlemen, we will take this as the last question. I would now like to hand the conference over to the management for closing comments. Thank you. Thank you, first of all, Yes Securities, Shivaji, and team for hosting us. We had absolutely a fabulous set of questions. And also, some questions keep me thinking on that gold loan, which I finally got an answer. So we may not be able to answer all the questions upfront, but I think we have been able to satisfactorily give a response to most of the questions. Thank you again for asking very good questions. And look forward to seeing you at the end of Q4 again. Thank you for everything to everybody. Thank you. Thank you. On behalf of Yes Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.