Ladies and gentlemen, good day and welcome to IndusInd Bank Limited Q3 FY23 earnings conference call. 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 this 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. Sumant Kathpalia, Managing Director & CEO. Thank you, and over to you, sir. Good evening and thank you for joining the call. I will start with some macro commentary and then go into bank-specific details. Domestic economic activity continues to strengthen over quarter three. Improving credit supply with resilient banking system is supporting the economic recovery. Gross NPAs fell to a seven-year low of 5% in September 2022, and net NPAs dropped to a ten-year low of 1.3% of total assets. Monetary policy tightening is also likely to take pause after another possible hike in February. On the fiscal front, the budget for 2023-2024 is likely to continue to support economic recovery and help address overall macroeconomic stability through fiscal consolidation. While domestic activity remains strong, risk from a challenging global economic environment would remain going forward. Indian economy has shown resilience during 2022 in the face of extraordinary external shocks. India is thus likely to be the only major economy growing in excess of 5.5% per year over the next couple of years. Coming to the quarter-specific developments, some of the salient highlights for the quarter were acceleration in loan growth driven by retail segments. Our retail businesses grew by 5% quarter-on-quarter and corporate grew 4% quarter-on-quarter, driving overall retail growth of 5% quarter-on-quarter and 19% year-on-year. Within retail, vehicle finance growth was robust at 7% quarter-on-quarter with another quarter of record disbursements. Bharat Financial originated MFI loans and merchant loans grew by 2% quarter-on-quarter. Non-vehicle maintained steady growth of 6% quarter-on-quarter. Deposit mobilization with momentum on retail. We achieved a 3% quarter-on-quarter and 14% year-on-year growth in deposits during the quarter. We saw healthy momentum in retail deposits, with retail as per LCR accelerating to 21% year-on-year versus 16% in previous quarter and was up at 6% quarter-on-quarter. All key segments of branch banking, affluent and NRI contribute towards the retailization momentum. Stable asset quality. Our gross slippages during the quarter reduced to INR 1,467 crore from INR 1,572 crore quarter-on-quarter. Our restructured book too reduced from 1.5% to 1.25% quarter-on-quarter. Our gross NPA is down to 2.06% and PCR remains healthy at 71% with net NPA at 0.62%. Our contingent provisions are at INR 2,192 crores with a total loan-related provision at 130% of GNPA. Our credit cost has reduced from 44 basis points to 40 basis points quarter-on-quarter. Healthy profitability of the franchise. Our core operating profits grew by 20% year-on-year, driven by improved NIMs as well as strong client fees. Net interest margin was at 4.27% versus 4.24% quarter-on-quarter. Client fee income grew by 28% year-on-year, driven by retail fees. Our cost to income was steady at 43.9% and our PPOP margin remained healthy at 5.7%. Our profit after tax grew by 9% quarter-on-quarter and 58% year-on-year to INR 1,964 crores with annualized EPS of INR 101 per share. Our return on assets improved to 1.87 and return on equity crossed 15% mark in quarter three for the first time in three years. Coming to individual businesses. Vehicle Finance. The vehicle business continues to achieve a record disbursements every quarter and the third quarter has been the best ever by a significant margin. The disbursements have been broad-based across all vehicle categories. Disbursement during the quarter were at INR 12,713 crores, driven by 19% quarter-on-quarter and 44% year-on-year. The cumulative nine months financial year 2023 disbursements were at INR 33,450 crores and are up by 52% year-on-year and already ahead of full year disbursements for last year and one more quarter, with one more quarter to go. The vehicle finance loan growth as a result continued to accelerate with a robust 7% quarter-on-quarter growth and YOY growth improving from 13% to 18% during the quarter. Within vehicle categories, commercial vehicles, utility vehicles, cars and construction equipment saw more than a 40% year-on-year growth in disbursements. Two and three-wheeler segments too, which was stagnant since COVID, saw demand coming back with healthy quarter-on-quarter and YOY growth in disbursements. Vehicle asset quality remains steady with gross slippages at 0.9 versus 1.1% quarter-on-quarter. Standard slippages were higher quarter-on-quarter due to impact of mining duty in Odisha on freight availability. The duty has now been rolled back and freight availability has started improving. The restructured book in vehicle finance reduced by INR 400 crores to INR 1,868 crores from INR 2,270 crores quarter-on-quarter. The reduction in restructured was broadly equally driven by collection and slippages. The collection efficiency of the remaining restructured book customers was stable at 84%. Overall, we continue to see healthy operating environment for the freight industry, thus we expect to maintain our disbursement momentum in the current quarter, as well as supported by new year purchases and income tax benefits. Bharat Financial Inclusion Limited. Our microfinance and merchant acquiring loans originated through BFIL grew by 16% year-on-year and 2% quarter-on-quarter. Our microfinance businesses disbursements were at INR 8,928 crores, growing 27% year-on-year. The disbursements were lower by possibly a few hundred crores due to bunching of festivals in the first half of the quarter. The member addition, nevertheless, were at 593,000 for quarter three, up by 20% quarter-on-quarter, of which December was the best month of the year so far. The disbursements for these member would gather pace from the current quarter onwards. MFI standard book net collection efficiency for quarter three was strong at 99%. The gross slippages during the quarter were down to INR 409 crores compared to INR 435 crores during the previous quarter. Our 30-90 DPD, including restructured customers, were at 2.4 on December 2022, compared to 2.0 at the end of September 2022. The increase was largely contributed by the eastern states. We have slowed down on disbursements in these geographies with increased focus on collections. Overdue position for BFIL continues to be better than the industry at all DPD levels. We continue to expand our merchant acquiring business under the banner of Bharat Money Store. Portfolio flows through BFIL under this business has grown 16% sequentially to INR 3,094 crore with 4.9 lakh active customers. Our liability book sourced from customer service through BFIL has increased by 65% year-on-year to reach INR 1,633 crore through 1.35 crore accounts, savings accounts, RD, FD, and CASA with us. Overall, we continue to be cautiously pivot towards the growth on the microfinance business. The rural economy continues to improve. The pace of improvement seems to be slower than expected. We continue to leverage BFIL franchise to diversify into allied businesses, within microfinance, the disbursements are driven by lower ticket sizes and reducing geographical concentrations. Global diamond and jewelry business. The business continued to maintain its global leadership position of being the largest lender to this industry. Our diamond portfolio saw a growth of 20% year-on-year. Asset quality remains pristine with no restructuring and SMA-1 or SMA-2 customers. We remain watchful on the implications of the prolonged Russia-Ukraine crisis and remain compliant with all the extent guidelines in facilitating cross-border trade. The COVID relaxations in China is likely to help the overall demand for in this year. Corporate bank. Our corporate business delivered another quarter of healthy growth and no asset quality concerns. We achieved a growth of 20% year-on-year during the quarter with no net slippages. The growth was broad-based across segments, with large corporate growing 3% quarter-on-quarter, mid-corporate 4% quarter-on-quarter, and small corporate 11% quarter-on-quarter, resulting in the overall growth of 4% quarter-on-quarter. The segment driving the loan growth was steel, services, petroleum segments. Growth in small corporates were driven by continuous scale-up of our SME segment and agribusiness seasonality, resulting in ramp-up of our commodity finance book. We continue to actively reprice the loan book. Our yield in the corporate book improved by 37 basis points during the quarter. The portion of A and above rated customers is now 74% compared to 72% year-on-year. The overall weighted average ratio to improve to 2.64 from 2.67 on year-over-year basis. The gross slippages from the corporate saw a reduction in both standard as well as restructured accounts. Overall slippages were down from INR 179 crores to INR 119 crores quarter-on-quarter. Exposure to stressed telco was stable at INR 17.3 billion, including fund-based exposure of INR 10 billion and balanced non-funded ex-based exposure. We remain watchful on the developments at this account. Overall, we continue our journey of corporate growth driven by higher-rated granular, shorter duration loan book. The asset quality performance remains comfortable and growth broad based across client segments. Other retail assets. Our non-vehicle, non-microfinance retail loan book, too, saw growth momentum accelerating during the quarter to 23% year-on-year and 6% quarter-on-quarter. The growth was driven by credit cards, personal loans, as well as steady momentum in business banking. Our credit card spends continue to remain strong, with spends of INR 20,000 crores for the quarter. Our credit card loan book grew by 9% quarter-on-quarter. Our new acquisition remains robust with around 88,000 acquisitions in December 2022. We also recently announced world's first tripartite co-branded card in partnership with Qatar Airways and British Airways. We have done a pilot launch of our own home loans in September, and we progressed on rolling it out against various mark-markets in the country. We did disbursements of over INR 200 crores in the quarter and aim it to scale it up meaningfully in the coming quarter. The share of consumer banking loan has increased to 16% of overall loans now. We expect this to continue to increase as we scale up the home loans merchant acquisition to maintain traction on credit card and personal loans. Coming to liabilities. Our deposits grew by 3% quarter-on-quarter and 14% year-on-year. We saw healthy acceleration in the retail deposit mobilization during the quarter. Our retail deposit, as per LCR growth, accelerated to 21% year-on-year from 16% in the previous quarter. The absolute addition of retail percent to 42.4% during the quarter. All our business units, including branch banking, affluent and NRI, contributed towards the growth. The growth momentum comes in the backdrop of the heightened competitive intensity in the industry. Our new initiatives, affluent and NRI banking, saw growth accelerating during the quarter. Affluent banking net relationship value grew 5% quarter-on-quarter to INR 66,700 crores, of which deposits grew by 8% quarter-on-quarter to INR 41,950 crores. Our NRI segment too maintained the momentum, with deposits growing by 16% quarter-on-quarter to INR 32,900 crores. Our customers can now pay direct taxes instantly through our IndusInd Bank accounts using our digital channels and our branch network. Our CASA ratio was at 41.9% versus 42.1% year-on-year. The CASA deposits saw growth in current accounts, whereas savings accounts contracted sequentially. The savings account contraction was due to customers moving deposits towards fixed deposits and we letting go some of the expensive and bulky accounts. This also ensured containing the increase cost in the cost of savings account and as we had taken savings account rate hikes in October. The share of top 20 customers in the overall deposits has also come down from 17% to 15% quarter-on-quarter. We opened 64 branches during the quarter, taking the branch count to 2,384, and aiming towards closing the year at 2,450-2,500 branches. Contribution of the certification of deposits low at 3.6% of deposits. We continue to maintain healthy average surplus liquidity of about INR 44,000 crores during the quarter, with liquidity coverage ratio of 117%. Overall, we remain focused on the retail deposit mobilization despite the challenging environment. We continue to invest in the franchise both through distribution capabilities as well as offering competitive rates. The new initiatives, branch delivery availability of long-term stable refinance sources, as well as surplus liquidity on the balance sheet will help us comfortably fund our acceleration in the loan growth. Digital traction. Overall, the digital strategy of the bank is geared at driving three major objectives. A, build direct-to-client digital platform. B, drive superior client engagement. C, transforming existing lines of business. The building the direct-to-client platform. The IndusEasy Credit platform, direct platform marketing-led business in PL and card has grown 6x YOY and 75% sequentially quarter-on-quarter. The partnership business continued to grow strongly and grew 5x YOY and 17% sequentially quarter-on-quarter. More than 35% of the business in savings account and card by volume is now digital and partnership-led. Drive superior customer experience and engagement through digital platforms. Digital transaction intensity continued to grow with 93% of transactions processed digitally and 74% of service requests processed digitally. The mobile app continued to show a robust user base growth of 26% year-on-year in terms of monthly active user base. The engagement on the mobile app will further accelerate as the banks integrate the state-of-art event-driven real-time engagement stack in the app in quarter three. We further enhanced the IndusEasy Credit for individual stack with integration of new fintech partners leveraging the open banking capabilities of the stack increase in STP% to 30% through advanced analytics. Transform existing lines of business and making them more efficient. We continue to digitize the business with nearly all deposits and wealth business done digitally. With easy credit stack now we have 95% of the credits, credit cards sourced digitally and nearly 80% of the loans, personal loans sourced digitally. Nearly 50% of small business banking is digital and wealth and on track to grow at 80%+ by the end of financial year with the addition of full working capital product suite. Close to 80,000 accounts were boarded digitally every month across personal loans, credit cards, savings accounts by the bank. Sustainability. Sustainability is core to our strategy. We continue to progress on our agenda of sustainable banking. To promote greater trust on our ESG linked products, we are launching a series of ESG linked products. We have already launched two such products, including EV finance for passenger cars and green fixed deposits. We also have a couple of more initiatives planned for launch in the coming quarter, such as green personal loans for solar rooftop finance and new platform supporting women entrepreneurs. During the quarter, the bank's board also approved and upgraded a robust ESG risk frame assessment policy and governance framework for all our corporate exposures. This will help us prudently manage bank's exposure to high ESG risk industries as the country transitions to a low carbon economy. Bank has also selected for a pilot of TNFD, Taskforce on Nature-related Financial Disclosures, a UN-supported initiative of sustainable agriculture. Our efforts are well acknowledged, and this quarter saw us release of our ESG ratings from two marquee international rating agencies, Carbon Disclosure Project, CDP, and S&P Global Ratings, and I'm happy to share that we have once again scored the highest rank among the five large private sector banks. Coming to the financial performance for the quarter. Net interest income grew by 18% year-on-year, broadly in line with the loan growth. Net interest margin improved sequentially to 4.27% from 4.24% quarter-on-quarter. Our loan yields improved by 24 basis points quarter-on-quarter, and yield on overall assets improved by 34 basis points quarter-on-quarter. The cost for deposits increased by 37 basis points, and the cost of funds increased by 31 basis points during the quarter. The core fee maintained strong traction growing at 28% year-on-year and 4% quarter-on-quarter. The treasury income was positive and stable quarter-on-quarter. The overall other income grew by 11% year-on-year and 3% quarter-on-quarter. Share of retail fees remain healthy at a 71% of the total fee. Our total revenue for the quarter was at INR 6,572 crores, with 16% year-on-year and 4% quarter-on-quarter growth. Operating expenses grew by 4% quarter-on-quarter. We continue to invest in talent, we hired 1,800 employees during the quarter and around 8,500 during the current year. Our overall cost-to-income ratio was stable at 43.9% quarter-on-quarter. The operating profit for the quarter was at INR 3,686 crores, growing 11% year-on-year and 4% quarter-on-quarter. The PPOP margin to loans continues to be healthy at 5.7%. Our core PPOP grew by 20% year-on-year. On the asset quality and the provisioning front, the provisions for the quarter were further reduced to INR 1,065 crores, and the provision to loans are thus now at down to 39 basis points now. The gross NPA were down from 2.11% to 2.06% quarter-on-quarter. Net NPA was stable at 0.62% with healthy provision coverage ratio of 71%. The slippages during the quarter were down to INR 1,467 crores from INR 1,572 crores. We utilized INR 461 crores from contingent provision during the quarter, with residual contingent provisions of INR 2,192 crores or 0.8% of loans. Cumulatively, for nine-month financial year 2023, we had INR 1,833 crores of slippages from the restructured book. We have utilized INR 1,136 crores of contingent provisions so far. As the incremental slippages from the restructured pool continue to be range-bound, we are comfortable with the contingent provision. The net security receipts have reduced to 56 basis points from 67 basis points quarter-on-quarter. We carry provisions in line with the exchange regulatory requirements. Total loan-related provisions are at 2.7% of loans or 130% of gross NPAs. Our SMA-I and SMA-II book was at 8 basis points and 24 basis points respectively. Total SMA-I and SMA-II are down to 32 basis points from 58 basis points quarter-on-quarter. The profit after tax for the quarter was at INR 1,964 crores, growing 9% quarter-on-quarter and 58% year-on-year. Our CRAR, including profits, remain healthy at 18.01%. Return on assets continued upward trajectory from 1.80% to 1.87% quarter-on-quarter. Our return on equity has improved to 15.2%. Overall, we are coming towards the end of our PC5 strategy and outcomes so far have been consistent with our objectives outlined in our earlier communications. We will be formulating our PC6 strategy in the current quarter and will present to you the counters in the next analyst call. The key themes that will guide our strategy would be deposit retailization will continue to be the cornerstone of PC6 too. We will add new growth boosters for increasing customer acquisition, including digital 2.0 offerings. Loan momentum should accelerate in PC6 with stable macro environment. The acceleration will be driven by retail segments. We will continue to invest in franchise through distribution, technology, employees, adding and scaling new initiatives to diversify our revenue pools. We have maintained our PPOP margins in most turbulent and aim is to achieve that in PC6 too. The overall return ratios have improved over the last couple of years and should continue to improve with normalization of provisions in PC6. While we focus on scaling up our businesses further, the growth will be achieved with constant focus on governance and sustainability of the franchise. With this, we can open the floor for question and answers. 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 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. Participants, you may press star and one to ask a question. The first question is from the line of Mahrukh Adajania from Nuvama Wealth Management. Please go ahead. Hi. Good evening. Suranj, first of all, what are your views on the new ECL circular? You already have a good stock of contingent provisions, and provisions to loans are running at 2.7%. Plus you've all banks have been doing mock runs with RBI on IFRS, is what we are told. How does that affect? How does the ECL circular affect you? Even some rough estimate would be good enough, either positively or negatively. Well, it's too early to comment on it. I think the circular has just come out. I think, what you need to understand is that there are certain parameters which RBI will define, which each bank will have to follow. Each one bank has been following their own process. I think there will be some standardization which will happen as a consequence of this new note. We have to give our feedback by the month of February. As a consequence, a new model will evolve, which our RBI and the banks will back test. As a consequence, a new model will emerge. I agree with you. The bank carries, you know, very comfortably on contingent provision as well as good capital ratio. I think we should be able to manage this over a period of time, but it's too early to comment whether how it will happen. I'll ask Ramu to also give his views. Ramu runs our risk management. Yeah. Hi. You know, basically, I think the discussion paper that's come from RBI has several questions that they've raised the participants, the banks to, you know, address or to, you know, come back to them on. Then we would get the guidelines as to what the minimum levels would required will be when we can develop our models. No doubt, yeah, as you mentioned, we have been running these and we've been testing it. We'll have to look at the probability of defaults and what else will happen. Uh-huh. Coming out of COVID, the probability of defaults may look higher, but it will get normalized over the next one or two years as the asset quality is improved across the banking system. Where we are at our different portfolios and the way we have looked at it, and over the years we work, it should be comfortably placed. I think we should be able to work it out. It depends purely on how RBI, you know, gives the basic benchmark. Once we have that, then we'll be able to work out our models, have it validated as expected by RBI, and then we'll have to take decisions on what requirements are. Don't expect a material impact as we have looked at our numbers, but we have to wait for the guidelines from RBI. Sure. Sure. Thanks. My next question is generally on sector outlook and then how that comes down to IndusInd Bank. Obviously, loan growth has been very strong for the sector, and given that fourth quarter is busy season, it may continue to be strong. Do you see any deceleration or any big time of fall off in loan growth in the first or second or third quarters? Because it's remained strong for a very long period of time. That in that back context, what would be the guidance for your own loan and deposit growth be? If you look at the businesses in which we are in, I think our vehicle finance business is coming from cyclical lows. I think you are seeing a fantastic, you know, vehicle finance growth across the vehicle categories. I think, quarter one is relatively a slower growth for them, but otherwise they have done relatively very, very well. I think that growth should continue in the next year also. That's something which we are hopeful of and we have diversified that book to such an extent that I think we are not dependent on one single product to give our growth. I think that's why this growth is coming in. Micro finance is an industry, which should see growth and we are diversifying that portfolio with merchant advances. Diamond finance growth depends on the global enviornment, and we have to see how the growth comes in. Going back to the corporate, our focus is on the MSME and the SME segment, where we are seeing growth coming in. And on the retail loans side, consumption story continues in India, and we are seeing a huge growth on that part. So on the overall loan growth, where we are and what we are doing, we are expecting a loan growth of 20% to 25%. We are going to present our PC6 strategy very shortly in the next quarter. You would see that growth and our CD ratio anywhere between 85%-93%. Would that require a lot of hikes in deposit rates from your end or you think it cooled down now, for the sector and then for you? I think, we've always said and the house view has been that there will be one more hike which will come in the month of February of around 25-35 basis points. Then we have to see how the global plays out and how the Indian inflation plays out. I think we are very certain that, I think then, I think the stance should turn to neutral and I think we should see the scaling down of the, of the deposit rates maybe by the third quarter of this financial year, not earlier than that. Okay. Thank you so much. Thanks a lot. Thank you. Next question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Firstly with respect to the asset quality on the consumer finance side, there has been some deterioration on a quarter-on-quarter basis, particularly most of the product segments in vehicle have seen the increase in the GNPA. Is it more a function of lower write-offs or any higher slippages out there in the vehicle finance portfolio? I think the vehicle finance, if you look at, rest are very small. The only thing where the slippages have happened is really on the commercial vehicle side of the heavy, medium and heavy commercial side. It was because of the Odisha issue on the duty, which has been rolled back by the government. You should see that coming back to normal during this quarter itself. Of course, the central loan portfolio continues to suffer. You know, we have an 8% delinquency there, and we've not done any sale to the ARC also. That's something which you would have noticed on the consumer side. Yeah. Yeah. Okay. Particularly CVC, in fact, tractors are also seeing some kind of a deterioration. We see that coming back this quarter itself. Okay. Okay. Secondly, in terms of the deposit rates. Okay. In fact, earlier, almost eight quarters back, there was a good gap which was there with the other private banks. Commendably now we look at it, we are almost catching up with them and it's very near to where some of the leading private banks are. What would be the stance out there? Maybe, do we see that, okay, to accelerate further deposits, we will need to have a more gap with the private banks or, this seems to be good enough for the overall growth which is required on the lending side? Our stated intent was that we will have a 50-75 basis point gap. What we have observed is that people have brought in and we were able to mobilize deposits and retailization with our branch expansion and our branches were able to retailize deposits. So that's something we did not feel the need of increasing our deposit rates in the retail side. We continue to watch that every month. If we feel that our retailization is going down, we will increase the rate. We feel right now there is a big opportunity in the senior citizen segment, and I think there we find that if you get the senior citizen account, you also get the savings account with a large balance. I think there are opportunities and there are cluster of opportunities which we go after, and we feel that. In the NRI we saw the opportunities. When we're able to garner that opportunity, and you would have seen our NRI book grow to about INR 32,400 crores from INR 29,000 crores. I think we see opportunities and strike the opportunities. I think, as of now, I think we will do some changes, but those changes will be immediately not at a broad scale level, but at a specific tenor or a specific segment level. Sure. Sure. Okay. Broadly, maybe currently there is no need, and we will just evaluate if there is a need. No, no, I did not say that. I said that we always evaluate opportunities- Yeah. We find that there are certain segments where we feel there are opportunities and we will increase the rate in a short while from now in those segments where we feel we can get very good flows and very good money. Yeah. More so to do with the outlook on main. Okay. If we maybe go ahead and do the deposit highs and given fixed rate nature on the lending side, should we see that, okay, margins should be more or less over here or decline from the current level? We should always say that our margins are 4.15%-4.25%. I've always maintained that. Don't get carried away with 4.24%, 4.27%. I've always said 4.15%-4.25%. PPOP margins will be greater than 5%. We've been above 5.5%. Yeah. I've always said that in PC5 we will continue to maintain, and that's the stability which we want to bring to our business and predictability which we want to bring to our business. Sure. One last question on restructured. Impact of the improvement of 24 basis points, it seems, 12 basis points is kind of a slippage from the restructure. On the balance pool, you said that, okay, collection efficiency is better on the restructured side, but how should we look at it? Do we see the trend continuing in terms of the slippage from the restructured pool? It'll be very bare minimum. If you look at it's only going down, and we'll continue to slip further. Yeah. I think by the end of this, the quarter four, you will almost see the end of the... By quarter four or quarter one, you'll see the end of the restructured book for us, and that will be the end of it. I think we will come back to normal credit cost as a consequence of that. Okay. Okay. Got it. Yeah. Thanks a lot and all the best. Yeah. Thank you. Next question is from the line of Rahul Jain from Goldman Sachs. Please go ahead. Yeah. Hi, Sumant. Just a couple of questions. The first one is, I may have missed your comments, but when I look at the sequential NPLs in CV construction equipments and MFI, those have gone up- Yeah. sequentially. You know, even though I think, initially your outlook that you talked about was sounding, you know, quite optimistic. Wanted to understand, was there any technicality or the write-offs have been lower in this quarter? You know, was it the reason why GNPA moved up? Yeah, absolutely. I think, one is there's no ARC sale on the CV business, which we've done on the vehicle finance business. Number two, I think, there's a specific Odisha issue which came up and that impacted the business and which will have got resolved and you'll see the rollback happening at this point. This was which portfolio on the Odisha issue? Issue. It's the CV one. Vehicle for the commercial vehicles. Then the. Otherwise, on the others you will see the rollback happening this quarter. Why would the MFI NPLs go up? Yeah. It was in the eastern sector where we found that collections because of the holidays and the grouping of the holidays, the NPL slippages happened and it's very difficult to roll them back or three installments at a time and that's why the slippages happens at that point. Okay. I think another quarter, another quarter of pain and I think MFI should be back. Understood. That's helpful. Maybe just one more point on this, just a follow on. Is it possible to know the 30 DPD, 60 DPD in MFI? So I, I, I, I- You have told. I will, I have told that. 30 to 90 DPD is 2.4% of the total book. 30 to 90 DPD in MFI is 2 point? 4%. Okay, understood. That's helpful. Thank you. second, the other question is on the current account deposits which saw the second consecutive quarter of strong growth. Can you just throw some color as to what's driving this? Rahul, always remember that current accounts is a volatile business. Yeah. Yeah. We specialize in three distinct areas in the current account business. One is we are a very good escrow business leader and specifically in the real estate RERA part of it. Second, we are very strong in NBFCs, cash management business. We are very strong on it. Third, on the trade effects part of the current account we are very strong. As a consequence we get rates. You will see some flows which come out as a consequence. On the last part, we get a lot of dividend mandates on the government mandate business which we do very well in the public sector undertaking. I think you will see some flows coming in. Normally you should see a standard flow which was around 38-40 now moving up to 43-45, That is our standard flow and you will see some flows which come in and they help us in managing our cost of deposit, but they are not stable to some extent the way you call stables with deposits. You will continue to see volatility, but they are part of our core business. Because we do these businesses of cash management. You know that cash management money cannot last with us for more than three days or four days because as per the new current account guidelines or, and [VERAIs] with us. It's a part of our DNA to do the real estate, and we get the RERA businesses as a part of the consequence of that. Of course, the trade effects is a part of our core businesses. We follow this as a process, and I think that's where the current account business is growing for us, and we focus on these areas to get the business. Understood. Thanks, Suman. The other question is on the yields in corporates. Rahul, sorry to interrupt you. Can I request you to speak through the handset? Is it any better? Yeah, Rahul, it's better now. Thank you. The other question is on the yields on the corporate portfolio, which moved up quarter on quarter nicely. I just wanted to understand, you know, what were the rating profile of these corporates where we are able to pass on the cost and can it sustain over the next few quarters? Rahul, as we have said earlier, bulk of the corporate book is a floating rate book, so it's not about to rating profile or anything as such. Every quarter, you know, you have to reprice the book, and that continuous repricing is happening. Over entire book, you will see the repricing happening as every quarter the book comes up for renewal. At every renewal, the repricing comes into play. The benchmark is a short-end benchmark or a year plus? It varies depending on the corporate demand. If you see overall corporate book, almost 40% of the book is linked towards MCLR. Within MCLR, it varies from three months to one year. Every corporate loan has to be repriced within a year and reevaluated within a year, so you can't take it beyond one year. Another 40% is external benchmark linked. The external benchmarks typically are the G-Secs and MIBOR, et cetera. That book gets immediately repriced. Balance 20% is short-term in nature. While it is a fixed rate book, but it gets repriced within a short period of two months to six months. There also you get repricing happening in a short period of time. That's very helpful, Indrajit. Just a last question on the ECL. We were under the impression that the parallel run was happening for the last few years, particularly for the private banks. What really has changed in the discussion paper that RBI has put out, which may or may not have impact on the numbers? You said it may not have any impact on the numbers, but any particular observation that you want to point out to us? I think every bank was doing something on their own. Now the parameters are going to be governed by the RBI, some of the parameters. I think, we will have to back test this model basis the certain parameters which the RBI will standardize across the industry. That's one. Number two, I think, they will take into account what has happened during the COVID period and will the probability of default, get affected as a consequence of the COVID period. Sorry. This is Ramu here. Just to add a comment towards what you mentioned. We could, you know, banks, depending on the data they have, they could use behavioral models or they could use standard, you know, SMA approaches. During the period that we did this test runs, we have followed our own approaches based on the data quality, the richness of data and time length of data that we had. We have to wait to see how RBI determines that. You know, for example, we have four decades of data for our vehicle finance portfolio as an example. Yeah. You know, that's what we need to. Because during, in that paper they mentioned there'll be certain levels that they want to have of the provisioning requirements. It may not be at the same level as today as asset quality, you know, the IRAC norms are. Those are the things we have to fine-tune. We have all the data, we have worked on it. We once we get clarity on that from RBI, we'll be able to put it together. Based on the early estimates, it looks under control. Just to extend this point. Let's say, you know, the probability of default indeed comes on the higher side because we still have some of the portfolios which are maybe above the historical trend in terms of delinquencies and credit cost. Would it impact the pricing of the loans as well? Because this would also be a number that will be going into the pricing of loans. Would it put you at any disadvantage versus the market? Not at all. I don't think so. Microfinance, we are already the lowest. CV, not at all. Sure. We are benchmarked and the best in class in the market on the CV book. What about corporate loans? We've not seen the flows at all. Just see our corporate book. Mm-hmm. See the flows this time also. There's nothing. Diamonds, we have nothing. NPA reduced. There's nothing on corporate. Understood. Got it. Suman, very helpful. Thank you so much and good luck. Thanks. Thank you. Next question is from the line of Abhishek from HSBC. Please go ahead. Yeah, hello. Good evening. My first question is on the MFI book. Can you quantify the disbursement? I think I missed it from your opening remarks. It's about. Yeah. I'll just tell you the number. It's about 8,200 and. One second. Yeah, 8 9- INR 8,928 crores. This is only for the MFI, right? Yeah. Not merchant advances. No. No. No. No. No. In investor presentation, we give a slide on MFI. Sequentially, you know, one would have expected the book to go up. Have you seen like accelerated repayments or something? Basically, I'm trying to see. The run-off is about INR 3,000 crores a quarter. A month. A month. A month. A month. A month. That's the run-off on the book. Yeah. We have a shorter duration book and the run-off happens. What is the outlook on the disbursement? You see it going up? I think this will go to about INR 11,000 crores. That's the maximum it will go to. It'll never be a INR 15,000 crore disbursement book. The growth will be limited to about INR 1,500-INR 2,000 crores a quarter. Yeah. Yeah. Actually the expectation was that in this quarter itself you'd see that kind of accretion. I was just trying to get a sense of the growth going forward. Because of the holidays in the month of October and the bunching up of the holidays. October was a complete write-off with 10 days working, 12 days working days. November, it came back a little bit, but December is where we saw the INR 3,300 crores of disbursement coming back. Understood. In terms of slippage, how much of it was from NFI this quarter? I'll just give you the number. We'll upload a table, Abhishek, with the segment-wide slippages. Okay. Like last time. Perfect. Just one more thing. On this telecom exposure to this particular company where you have, I think, a INR 20 billion outstanding. Is it 100%? INR 1,700 crores now. INR 1,700 crores. It is entirely provided for, right? No. We have provided INR 990 crores. 100 is provided. Funded exposure is provided. Okay. Okay. Okay. Got that. Right. I think, yeah, those were my... Okay. Sorry, one more question, just quickly squeezing it in. Contingent provisions, I think two or three quarters back you had called out that you would probably use around INR 1,100-INR 1,300 crores or something of that order. You've almost used, I think, around INR 900. INR 1,136. Yeah, INR 1,100. We'll remain within that number. INR 1,300 crores or something. We'll not cross that number. Okay. Got it. Got it. Perfect. Thanks so much. Thank you. Yeah. Next question is from the line of Saurabh from JP Morgan. Please go ahead. One question on this slide 18 which you've given. One is, you know, what will be the overall fees you'll be earning on this entire LCBG book? There is this low investment grade, 4%. Could you quantify what that is? I'll ask Arun to answer that. Arun runs our, the whole business. Yeah. No. Sorry, what was that? The LC book. How much of revenues you get from LCBG? Okay. It's all client-related businesses on the LCBG as well as mostly on the derivatives, because we are classifying that actually in that fee slide if you see. There is a slide on trade and trade fees out there. I think trade and remittances was something like INR 201 odd crores, and then FX on account of client income was INR 250 odd crores. That's what we get. It constitutes around 6, you know, of the total fee pool, of core fee pool of, 1,940. This is around, what, INR 450 odd crores out of that. Okay. Most of these exposures you've written public sector and all, but what will be the sectoral exposure there? Sorry, what was that? Most of the exposure are? Sectors which these will be happening into, like... That's a mix of both. Trade is primarily corporate accounts, right? Where, because it's typical LCs and stuff like that. Bank guarantees are typically the PSUs. Okay. Sir, this last question was this below investment grade, which is 4%. That's to the telecom one that we just referred. Yeah. The non-fund-based facility to the telecom company that we have. Of the four, one is telecom. What is the other three? The- Those are all smaller accounts. There is no one- Very small accounts. There is no one particular large chunky account there. Won't be able to disclose the names as such. Okay. Okay. Okay. Thank you. Thank you. Next question is from the line of M.B. Mahesh from Kotak Securities. Please go ahead. Hey. Hi. Just a couple of questions. One, if you look at the direction of these cost of deposits, which has kind of increased by about 35 basis points, about 30 basis points this quarter, could you just guide, kind of give us a rough indication as to how does this change over the next few quarters based on the current deposit rate and the maturity that you have in your books? I think, you will continue to see, you know, if the in February, if the rate of deposit changes, I think you will see a rate change. Currently, I think, you should expect a 15 to 25 basis points rate hike or 15 to 25 deposit COD hike on the overall book as a consequence of that. Sumant, just the question is the other way around. In assuming that there is no change, this quarter, if you assume that it's about, let's say about 35 basis points, would you say that the number increases to 50 basis points next quarter? Or do you sense that the number kind of remains where it is at 35 each quarter? Yeah. I think it's more of the latter. I think you'll have around 30 odd basis points increase somewhere, you know, maybe 5 basis points here or there on the number that we had as an increment in the last quarter. Mahesh, you will also have to note that last quarter we have taken a savings rate hike, which reprices the whole base immediately. That is not going to happen every quarter unless we raise rates again. Perfect. Okay. Second question, sir. In the past, you kind of mentioned that you will be kind of reducing these balances that you have on the balance sheet on the cash side. This, again, it remains reasonably at a high number at about INR 54,000 crore. it, actually it's a. Daily average was around INR 44,000 crores. INR 44,000. Yes. We carry excess liquidity, and we have been saying that as the loan growth accelerates, the excess SLR will keep coming down. At the same time, we will continue to carry INR 25,000-30,000 crores of surplus liquidity at all points in time as a manner of prudence and conservative, building buffers on the balance sheet. Sumant Kathpalia, this book sits in the. It earns any interest or it doesn't? If you see the split of the INR 44,000 crores, roughly around INR 25,000-30,000 crores is in the form of excess SLR. These are the G-Sec securities which we carry beyond what is required from the regulatory requirements. They give us returns in terms of whatever the G-Sec yields that are there in the market. The balance, INR 10,000-15,000 crores is pure cash that is kept beyond the CRR requirements. Cash. INR 10,000, INR 15,000 crores. Okay, perfect. Suman, just last question to you. Any conversation with the RBI on the extension of tenor? No, Mahesh. There's been no communication from RBI. Okay. Perfect. Done. Thanks. Thank you. Next question is on the line of Manish Shukla from Axis Capital. Please go ahead. Good evening. Thank you for the opportunity. Contingency provision of INR 2,192 crores, how much is restructured asset provisions? How much restructured asset provision? These are all. No, no. See, Manish, what we have to carry is, if you remember the RBI circular, we have to carry 10% of the restructuring. 5%. 5%-10%, depending on the security and all. Right. That is only what is required to carry by the regulations. That's around INR 500 crores, INR 458 crores. Beyond that, there is INR 1,000 crores for telecom assets and balance is pure, you know, contingent or surplus. Yeah. Both that, what, telecom as well as 500 crores is part of this 2,192 crores? Correct. Correct. Correct. Yeah. Okay. Secondly, on the yield on your consumer loans, if I look at first nine months, December over March- Mm-hmm. That has moved up by only about 32 basis points. While I do appreciate that it's a fixed rate book, the book itself has grown 17% in the last nine months. Uh. The yields have not moved. I mean, could you just explain what's happening there? I think you have to understand that the credit card yields have shown a decline over the last four quarters. Mm-hmm. Where the revolving rates have gone, come down on the credit card book, so that affects the book in a big way. Second, I think, in the CV business, the scooter loan businesses of the high-yielding business has come down, scooter loan and all. I think the yield has remained almost static while the disbursement in the other parts would have increased. The scooter loan business or the high-yielding, the three-wheeler businesses, those portfolios have come down and the disbursements have come down on that businesses because they are still coming out of the COVID. That's number 2. Number 3, on the microfinance side, the disbursements have not been very high and during this phase, and I think, the runoff of the book has happened. The growth has been very, very timid at this point of time. I think you will see that growth coming back, and that's why we are so comfortable when we give a range of 4.15-4.25, because you see, we'll see the growth coming back in these sectors and they will fuel the growth of the, of and the interest rates of the business. Last question on housing loans that you're doing, what is the yield broadly that you are getting? We are getting about 8.95% right now. That's the yield which we are getting the loans at right now. That's the yield. Okay. Thank you. Those are my questions. Thank you. Next question is on the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi, sir. Good evening. Shubhranshu here. Hi. Just on the vehicle finance part, sir, what proportion of our vehicle finance is for, is to SRTOs and what proportion is to the fleet operators? What is the credit risk management that we do? What kind of collection architecture we have and what's the 1+ DPD we have in. I've got Sriram who runs this business. Let him answer this. Yeah. 65% of the book is for SRTOs. Right. what is the one plus and the collection architecture in this business, sir? We don't share the 1 plus DPD because there are always operational delays that happen. People travel around the country, there will be, you know, quite a bit of people between 1 to 30 DPD. Over a period of time, you get back the collections. Whatever is the, you know, slippages, et cetera, are, you know, only if you are 30 to 90, then only that case comes in. I'll let Sriram articulate about the collection architecture. You see, like, below the branches, like we have separate collection people. Like, whether a customer is in overdue or not, it gets assigned to a collection agent, and generally he has around 250 contracts and he follows- Ladies and gentlemen, we request you to please remain connected. We are trying to reconnect the management line. Please do not disconnect. Thank you. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, you may go ahead. On the co-collection piece, like we have branches. Below branches, we have separate collection executives who handle not only, like, overdue contracts, but also other contracts which are not, which are in no due. Nearly 250 customers get allotted to each collection assistant. Above branch head, it is all like we do business and collection together. Unlike other bankers, like we do not have a separate vertical for collection and business. Above business, like all the hierarchy is for both business and collection together. All the collection executives are DRA-trained and we have certificates. Even repossession, nearly 50%-60% are handled in-house by our collection executives. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Sumant Kathpalia for closing comments. Thank you for joining the call. If there are any further questions, we will definitely, you can definitely call up me or Indrajit, we'll of course have one-on-one calls starting tomorrow onwards, we can discuss. Thank you so much. Thank you very much. On behalf of IndusInd Bank Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.