Ladies and gentlemen, good day, and welcome to the Q1 FY 2025 earnings conference call of the Karur Vysya Bank. We have with us today the management team of KVB, represented by Mr. B. Ramesh Babu, MD and CEO, Mr. J. Natarajan, Executive Director, Mr. M. S. Chandrasekaran, Chief Operating Officer, and Mr. R. Ramshankar, CFO. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. B. Ramesh Babu, Managing Director and CEO, to take us through the highlights of the quarter gone by, after which we will open the floor for questions. Over to you, sir. Thank you, thank you, Sagar. Good evening to all of you. On behalf of Karur Vysya Bank, I welcome you all for our bank's earning call for quarter one of the financial year 2025. We trust that you, your colleagues, and family members are keeping well and are in good health. We have uploaded our financial results along with the presentation on our website, and I hope you have had a chance to go through it in detail ahead of this call. Before I go into the numbers, let me begin with senior level changes happened during the quarter. Shri Natarajan, who was president of the bank, has been inducted in the board and designated as executive director. He will be overseeing all business verticals, including treasury operations. His quadragennial experience in various facets of banking would further shape our future growth. Mr. Dolphy Jose, Chief General Manager, looking after consumer banking, resigned during the month of June, and we have already recruited Mr. S. D. Gopal, who now heads liability business. Mr. Gopal has been a domain banker for 34 years and is in the liability acquisition business for more than 16 years. As indicated earlier, Mr. Nitin Rangaswamy heads retail assets business, including open market channel. Earlier, he was handling the open market channel. Bank has now strong management team and business support and control functions are headed by seasoned executives. Bank had another strong quarter of performance built on our guidance on 3 metrics: growth, profitability, and asset quality. Bank's performance indicators are in line with our guidance, and bank is seeing consistent and steady growth. It is encouraging to note our consistent and inclusive performance, highlighting a strong start to this financial year. The same will be continued, rather, we will aim for further improvement of the performance in the ensuing quarters. The bank's total business stands at INR 1,70,059 crore as on 30th June 2024. We were able to sustain the growth impetus during the first quarter as our total business registered a growth of 4%. The advances stand at INR 77,710 crore, and deposits grew to INR 92,349 crore with a growth of 4% each. We have been guiding in our earlier calls about our focus on inclusive growth from all verticals with respect to advances. I am pleased to share that the same is being sustained in RAM verticals with 6% quarter-on-quarter loan growth under the... Retail advances grew faster at 7% QOQ, driven by growth in jewel loans, mortgages, and personal loans category. We have integrated our open market channel, that is, earlier we were calling as a NEO, with our brand channel as a combined retail assets team from the beginning of the current year. The integration would help us to accelerate the growth in this segment. Commercial advances clocked 6% growth quarter-on-quarter, and agricultural advances achieved a growth of 4% during the quarter. Corporate book has de-grown by 2% during the quarter, mainly due to lower availment in certain seasonal sectors, lower disbursements and repayments, and of course, few accounts consciously we left due to pricing. Deposits growth remains one of the key focus areas for the bank, and you are aware that the bank had initiated various strategies for deposits growth, including establishment of sales acquisition channel for both term deposits and CASA growth. Our deposit growth was at 4% during the quarter, and term deposits and CASA deposits have grown by 4% each. We have now revamped liability business model, particularly on the CASA. Besides creating exclusive acquisition channel, we have launched 24 new variants of CASA products. Further, we have created separate channels for corporate salary, institutional, NRE, government business, trade and forex, business correspondent, and we have recruited national sales managers from the market to manage this business. The last year trend of depletion in existing book on account of other opportunities available for the depositors is still being witnessed in the current year also. However, we are confident that our conscious efforts in improvement in our engagement with our customers, supported by dedicated channels, would result in stemming the above reduction. All of you are aware of the September 2023 master direction of Reserve Bank of India, wherein banks are to follow new regulatory guidelines on classification and valuation of investment, effective from April 1st, 2024. Accordingly, we have implemented the new guidelines and the transition is P&L neutral. The net positive impact on reserves is about INR 81 crore. We had indicated in the last call that NIM would be above 4% levels till first half of current year. I am happy to say that the NIM for the quarter is 4.13%. Our continued journey on shedding away low-yielding corporate advances on one side, and focused more on better yielding, granular, secured advances in RAM verticals, both have helped us to retain about 4% NIM levels during the quarter. We are hopeful to continue our effort in maintaining the NIM above 4% for the next quarter, too. The cost of deposits increased by 12 basis points sequentially, and yield on advances by 2 basis points. Yield on investment increased by 12 basis points during the quarter. Based on our historical pattern of renewal of deposits and fresh deposit acquisition, we expect moderated raise in the cost of deposits by 12 basis points-15 basis points in the next quarter. Yield on advances expected to go up by 5 basis points, and yield on investments would be in the similar range for the first quarter. Considering all these factors, and without taking into any policy rate changes, we expect that the NIM will be above 4% in the next quarter, as I told earlier. We have achieved ROA of 1.7% in this quarter. We had guided that our effort would be to ensure ROA is always above 1.65 levels, and we are confident to maintain the same going forward also. Our gross slippages during the quarter continue to be under control at INR 174 crore, which is 0.22% on an annualized basis if you see, it comes around 0.81% of the loan book. With our continued close monitoring of accounts, we are confident that we will continue to keep the ratio below 1% as guided in our earlier calls. Our efforts on recovery of technically written-off accounts is continuing to yield results, as we have recovered a sum of INR 101 crore during the quarter. Due to lower slippages, recoveries, upgrades, and write-off, our gross NPA has come down to 1.32%, and we expect that we will continue to maintain it below 2% levels. For the quarter under review, we have provided INR 100 crore towards NPA migrations and INR 33 crore towards standard assets and restructured prudential provisions, aggregating INR 133 crore, which is 0.56% of our advances on an annualized basis. We estimate that the credit cost for the current year would be in the range of 75 basis points, as guided earlier. Our net NPA has come down to 0.38%, and we will continue to maintain net NPA at less than 1% of our loan book. Our standard restructured loan book is further reduced to 0.85 of our loan book, and we hold a provision of 40% of the standard restructured book. Our establishment costs were INR 333 crore during the first quarter, which is within our guided range of INR 325 crore-INR 350 crore. Operating expenses were INR 333 crore, sequentially gone up by 4%. Our cost-to-income ratio is at 47.20, and we will continue our efforts to peg it to, and are always to maintain within 50%. Our CRAR Basel III continues to be healthy and is at 16.47, providing a comfortable headroom for growth. Our liquidity coverage ratio continues to be well above the regulatory requirement of 100%. The Bank has added two branches during the current quarter. The setting up of the branches is under progress, and the first set of such branches are expected to function from the beginning of the second half year. To end, keep moving ahead because action creates momentum, which in turn creates unanticipated opportunities. Nick Vujicic? Our endeavor is to keep up the momentum created, and we have started the year as planned. We are mindful of the challenges, particularly on the liability side, and are taking every step to increase the low-cost funds, which would also help us in improving the margins. I am grateful to all our investors, analysts and stakeholders for the confidence and continued support, which we will reciprocate through our better performance in the days to come. Now, I'll be glad to respond to your questions. 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 touchtone phone. 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. Our first question is from the line of Jai Mundra from ICICI Securities. Please go ahead. Yeah, hi. Good evening, sir, and thanks for the opportunity, and congratulations on good numbers. Jai, a few questions. First is, sir, on yield on advances, right? So we had increased MCLR at the beginning of the quarter, and I think we had also revised, you know, repo rate link by 5 basis point. In this quarter, you know, our corporate book has actually de-grown, still the yield on advances rising only 2 basis point. And I think in your opening remarks, you mentioned that it could be, it could rise by another 5 basis point. So just wanted to check, is there... I mean, ideally, the yield on advances should have risen a little bit more. So I was hoping you can provide some clarity here. Yeah. Jai, thank you. Thanks for the compliment, Jai. In fact, if you need to look at it, there are a few more aspects here. MCLR, what all is there, our total book is not on the MCLR. So around 40% book is covered under the MCLR. So that way, out of that, at the time of repricing, only you can pass on this, unlike other things and all. So second thing, so there is some sort of a pressure in the pricing pressure from other competitors also. So wherever actually you need to retain a customer because for a long time they are there, if you need to look at the other value. So those cases, you may have to give some sort of a concession. The aggregation of all these together, and above all, as you have also seen, the corporate actually, so few of the accounts where, and we have this, we have de-grown also. So that's why if you look at it overall, that 5 basis points you may not be able to find straight away in the yield, but over a period of time, progressively it will start coming, though not now immediately in this quarter. Understood. Understood. And secondly, sir, there, there's a sharp growth in the jewel loans and retail segment, right? We have been looking to increase growth in gold loan in retail category, but this 24% QOQ growth, is there any, you know, specific reason? Have we introduced a new product, a new geography, or, you know, what is giving such kind of a growth, especially in this quarter? No, there are two things we, we need to see, Jai. The 24% number looks good, but you look at the base. Base amount, it is not on a INR 5,000 crore-INR 6,000 crore base or INR 10,000 crore base, it is not there. Because the base is low, the percentage looks high, first thing. And second thing, yes, we consciously made some sort of efforts in this. Many of the customers with whom we were dealing actually, so on a win back, we had a campaign wherein our branches started calling them and stating that this is what we can do, and we sort of streamlined our delivery numbers, what all is there. So with these things, we are able to see some sort of a traction this quarter under the jewel loans. So some sort of a conscious effort has been made to win back the existing customers whom and currently they are not dealing with us. Two years, three years back, they were dealing with us. So this has to some extent supported us and in getting the growth. Product-wise, more or less same product going on because our existing product is quite appealing. I tell you, Jai, in fact, the Jewel Loan, rather than the product and pricing, the major thing is the delivery. If someone comes, how fast you will be able to deliver, and the second thing is how fast you are going to release the ornament, though both are important. So that we have focused on that. Our anyhow pricing is quite competitive compared to the market, what all is there. So that way, all factors together, it supported us in this quarter. Sure, sir. Sure. And last two data seeking questions, sir. One is, if you can quantify the treasury gains in the total fee. I think you had already quantified a TWO recovery at INR 101 crore. But what would be the treasury gains in the other income in this quarter? And if you have the number of staff, outstanding staff count. No, no, it's what CFO is mentioning. It is 11 crores. Investment in trading profit is INR 11 crore, this year, this quarter, and last quarter it was INR 10 crore. March quarter was INR 10 crore and this now INR 11 crore. The employees number is 9403, Jai. Okay. Sure, sir. But there is another point we need to keep in mind. Jai, in fact, we used to be 7,700, something like that. Right. But of late, whom we have taken, more or less, majority are at the bottom, in the sense that they are the running sales team, who will be on the street, those sort of things. So that way, overall, they'll be adding value into the sales and growth over a period of time. So the higher level, taking the people is very few in this lot. So all these people that we have added in the last 18 months, they are not on IBA model, right? They are on CTC basis. Absolutely. Right? Absolutely. And then, sir, on the total 9,004- Continue, continue. No, on the total 9,400 people, how much, how many would be, let's say, ballpark, IBA and CTC? Around 33% would be CTC, and rest of the 67% will be IBA. Sure, sure. Thank you, sir. I will come back in the queue. Thank you. Thank you. Thanks, Jai. Thank you. Thank you. The next question is from the line of Prabal Gandhi from Ambit Capital. Please go ahead. Yes, thank you very much. Congratulations, sir. Am I audible? Prabal. Please go ahead. Thank you. So my first question was on the MSME segment. We are seeing a growth of 22% here, and it seems that this is largely driven by increase in ticket sizes. So how sustainable is this growth? And have we tweaked any strategy to focus more on the higher end or larger ticket size customers within the MSME segment? Yeah, yeah. If so, there are a few aspects, Prabal, if you see, agreed, continuously, we have been tracking the average ticket size, and, based on our past confidence, higher tickets, the relaxations what we have given at the lower ticket, we try to pass on slightly to a higher level also. We have seen the checks and balances, what we have got up to INR 50 lakh, and the delinquency level is low. And these relaxations, if we give it to INR 75 lakh, how it works? So that way, we have experimented, and we gave few of the relaxations that is working to some extent. And second thing, so the teams in the branches and others also, they started working well. And third thing, there was some demand. Due to that, the availments also have gone up. So these three factors have helped us. So regarding the trend going to continue, I may not say that it is 20%-21%, but our efforts will continue, so which may more or less yield. Our focus majority, first of all, if you look at it over a period of last three years, the commercial segment composition in the total advances has been going continuously up. The simple reason is that is a granular portfolio, secured and better yielding for us out of all the verticals. That is the reason all branches, every resource is working on that. So we will try to maximize what best we can do get under the MSME segment. Okay. When you shift from the INR 60 lakh to INR 75 lakh, it is the same customer who you are giving higher loans, or it's the new customer? New also. Earlier also, up to INR 50 lakhs, new customers we were doing. And those things actually, when we look at it back test, what's the stress we are getting out of that? What is the rating? All these things. So over a period of 2 years-3 years when we saw, so it is absolutely, it's bearable. That sort of a risk is bearable. Having seen that, we thought we can take some more risk with this sort of a relaxation. We have gone ahead in the last six months, but once you do it, it's just like a engine straightaway, it will not start. Slowly, it started working on this and on. So over a period of time, we will start seeing an average ticket size going up. But there are 3 combinations here. One is average ticket size, second thing is the disbursements also have gone up, fresh acquisition, and third thing, availments also have happened. It's a combination of all three have resulted in this growth. And sir, we are also seeing current deposits grow on a sequential basis in a seasonally weak quarter. So is there some correlation of maybe the MSME growth picking up for us and we are also able to tap float for the customers? No, I cannot say that directly there's an effective linkage is there between these two. So these two are independent levers as it is. So that way, tomorrow, MSME growth may be there, current account may not be there. Because the reason is, many of them, they may not place their money in current account. So they are all absolutely conservative. They are conscious about the pricing. Instead of leaving the money in the current account, they may keep it in the cash credit account itself so that they save the interest. So that way, I cannot say that current account growth will, can be linked to the MSME growth. And sir, secondly, in the BNPL portfolio, we have been growing that portfolio, but this quarter it seems that we have paused the growth in that portfolio. So, any stress that you are seeing on the ground, or maybe is this the cautious call that you have taken? No, Prabal, it is not the question of a cautious call or staying. You see, we used to have around INR 350 crore-INR 370 crore last March, and last year, Dussehra as well as Diwali, so there was a huge demand from the Amazon customers. So that's how it has gone up to INR 1,100 crore, something like that. So though we are trying to maintain in those levels, we will see it. Again, the opportunity comes with Dussehra, Diwali. What best can be taken and all, depending upon our risk appetite, we will try to do. Currently, if you look at it, the stress is under control. As we always told earlier also, we have FLDG of 5%, so that way, currently, what all default or NPA is coming up, so all is covered under FLDG. So we, we are not out of pocket as far as the stress is concerned. So currently, things, everything is going on well. Let us see when the next festival season comes, whether how much we can take, we will see, rather than overnight opening the floodgates. Got it. And so far, as per your monitoring systems, there seems to be no challenges on this front? Yeah, yeah, yeah, absolutely. As on date, everything is going on well, and as per the tolerance limits, what we have for the stress, it is moving in those limits only. Got it. Sir, and last question was on the management bandwidth. So I understand that you have got a lot of people from outside at the senior level, but how are you grooming people at the second and the third layer? Because, eventually, this also comes with a key man risk. We have seen that happen, in recent months, that when a senior person leaves, there is a risk that the systems below it cannot work that efficiently. So how are you bringing the second and the third layer in order to make it more institutional? Yeah. We are quite mindful of the fact about the succession planning. So that's why every senior position, what all is there, we have a buffer for one or two people always under that. That is the reason anytime, because someone leaving is not new to the bank, it has been happening, but we never had that shock anytime in the last few years, because the way we have groomed the people, many of them they can handle multiple tasks. They have expertise in different areas, and we have a concept of rotating them in different verticals also. In addition to that, as you mentioned, institutionalizing this one. So we started providing them this institutional training also for developing their management capabilities, and so they are effectively working as number two, number three. So that way we have an effective planning mechanism, which, someone can take over seamlessly if there is a gap. Got it. Thank you, sir. That's where my questions. Wonderful. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Rakesh Kumar from B&K Securities. Please go ahead. Yeah, hi. Thanks a lot, sir, for the opportunity and quite good set of numbers in this quarter. So, sir, just had a few questions on this quarterly numbers. Firstly, so just like you mentioned this, the you know the gain on the treasury book that is that have got routed into the reserves, that is INR 23 crore + INR 58 crore that we have reversed the depreciation of the previous previous year, previous quarter. Correct me, sir? No, no, this, this is actually the, this is the effective from 1st of April, and the transition day on 1st of April, when you work out based on 31st of March, this is the impact. It is, that whatever, you mentioned the number, has gone to the reserve. And so the another number which has, like, you know, from the Investment Reserve that we have, that we also reversed this quarter. So if you can explain that number, sir, INR 203 crore, so which has, like, you know, transferred from the Investment Reserve. So if you can elaborate on that, sir. Sure, sure. Pertaining to the notes to accounts number 2, sir. Yeah, yeah. Our CFO will respond to that. But two, one is for Investment Fluctuation Reserve, other is Investment Reserve. See, 2% of the average public, we have to transfer it and keep it under the Investment Fluctuation Reserve. If that is adequately covered, the guidelines have informed that the Investment Reserve can be shifted to... can be moved to General Reserve. That's what we have. So for your, for your question, the net impact, net impact out of the entire guideline, whatever the INR 82.25 crore we have mentioned, is the net impact. Correct. So this is INR 23 crore plus INR 58 crore, reversal of underprovision crore. Correct. INR 81 crore, that's what, that comes to INR 81 crore. The total impact is neutral because it moves within the reserve and surplus. It has moved from Investment Reserve to General Reserve. Correct. So this is Investment Reserve plus, Investment Fluctuation Reserve. Both the reserves, you know, of INR 203 crore shifted, transferred to the General Reserve. Investment Fluctuation Reserve stands as it is. There is no change in that. It remains as it is. Yeah. Only the Investment Reserve has moved from Investment Reserve to General Reserve within the reserves and surplus. Which was INR 60 crore as on March 2023. March 2024 number we don't have. Fair value valuation. Because of that new direction, that's, that we have taken to General Reserve, INR 60 crore. Okay. Okay. Okay, then. And, sir, I also saw this, you know, the recovery rate that we have, you know, we have seen in the Slide number 21, that has improved, significantly. Like, if we compare with, FY 2024 numbers and maybe, you know, Q4 2024 numbers. So, so the recovery, what we are doing, the provision write back, we are, we are doing on the recovery number, that has improved. So would that same, that kind of a number, pertaining to the figures there in the Slide 21, sir? No, Rakesh, in fact, the recovery, particularly from the written off and all, so we cannot give any guidance on that because it is dependent on many factors, external factors like courts, NCLT, auctions, these type of things and all. But our effort we started having for more than two years, in different stages, different cases which are stuck, slowly they are getting released. So our effort is to push each one of them as much as possible to get that. Correct. Correct, sir. Sir, I was referring to this recovery number, recovery and upgrade number of INR 90 crore, and against that provision write back of INR 56 crore. So, provision write back of INR 56 crore on INR 90 crore of recovery, I think that number, comparable number for previous quarter and previous full year, there is quite a lot of improvement that we have seen. So I was looking at that way, sir. Yeah, yeah. Your observation is correct. Okay. So currently, sir, investment yield numbers are like I saw, you know, there is an improvement, so it is now 6.53 for this quarter. And for March quarter, it was 6.41. But if I look at the previous quarter, investment yield which we had given, it was slightly lower. So, is there any reason for the March quarter investment yield number, sir? No. Actually, what happened last, in March, what happened, the YTD numbers were given. See, the entire figures are given quarter-wise. Okay, June, end of June quarter, September quarter, December quarter, March 2024 quarter. See, the last, in March, this thing, it was given till June. Figure, what is the YTD till June? March 1 was for the whole 12 months, whereas up to December was only for the quarter. Uh, okay. That's the reason, because 12 months when it is equated, so it has come to 6.41. Okay. Now we are doing quarter-wise to have a comparable at for all, all quarters. And so gross security receipts numbers are, in March 2024, it was INR 378 crore, and now the gross security receipts number is INR 363 crore. So, I couldn't understand, sir, if you can explain, sir. SR, SR, SR, sir. So some recoveries have come already. Last month also, last quarter also, if you see INR 54 crore recovery, you are able to see that. Last March quarter we have a recovery. So the recoveries are coming in SR. Actually, I was thinking for the closing figure of March and the opening figure of this June. So, we don't have that, you know, movement of that number. So, you know, that was the- Thank you, Rakesh. Sure. Moment, one moment. Sir. Are you there? Let us know. Yeah. Okay. Sure. Yeah. Thank you. Thank you. Thank you. Thank you. Thank you. A reminder to all the participants, if you wish to join the question queue, please press star and one on your touchtone phone. The next question is from the line of Anand Dama from Emkay Global. Please go ahead. Sir, thank you for the opportunity and, congratulations on good set of results. So my first question is regarding the AFS Reserve creation that we have done during the current quarter. So what is the positive impact on the CET1 during this quarter? This quarter 5. This quarter is INR 5 crore. Sorry? INR 5 crore is the AFS Reserve for this quarter. Whatever the gains under the AFS portfolio, which was transferred to AFS Reserve is INR 5 crore. The CET1 would have improved by INR 5 crore, then the risk will set in. In that case, how much is in the basis points? [audio distortion] are at INR 10,000 crore. So very, very small, sir. Okay. Okay, Okay, okay. Secondly, when you look at, basically, loan book, so two observations. One is that we are growing our loan book at a pretty faster pace. And, secondly, that we have also cut down our NBFC exposure, on a quarter-on-quarter basis. So any comment about that? No, no. If you look at it, the LTV, more or less what we maintain for a home loan as well as LAP, all of them, you are 100% secured. Then the options are different options are there. When you want to maximize the yield, the cost of deposits have gone up and you want to maintain the margins. So we do not want to aggressively go into the unsecured, because tomorrow something happens, the first fall will be from the unsecured. So that is the reason when we didn't go for that. At least out of these products, if you look at it, so one is Jewel Loan is giving more or less 9.5%-10%, something like that they are giving. So fully backed. That's why we have focused on that. And LAP is also giving that 9.5+ yield, where you have full security is there for you. And we are not relying only on the security here. We are looking at the cash flows. We are doing the assessment on those lines, where we are thoroughly satisfied their uninterrupted cash flows are there, to can service this loan, then only we are going for the LAP. That's why when we have seen few years, the stress levels under the LAP is quite manageable. That's why we thought saying that when the opportunity is there, demand is there, why can't we go for that? Now, coming to the NBFCs, agreed. So we have reduced the portfolio. There is a lot of scope available there and all, because RBI guidelines have come up for the additional capital, what we need to maintain. Second thing, suppose there is some sort of an issue, automatically NBFCs will have an issue, indirectly we will have the problem. That is the reason we are relatively, in a calibrated manner, we have grown on NBFC, and here the NBFC exposures, we have brought it down. So that's why a manageable level, keeping our risk appetite in mind, we are growing in the NBFC, not taking too big, too many exposures on NBFCs. Sure, sir, that's very helpful. Sir, one more thing is that, you know, recently Telangana government has announced a farm loan waiver. Do you see any... So basically, one is that how much is our portfolio in Telangana? Okay, and, do you see any impact of this farm loan waiver, at least intermediately? If you look at it, Anand Ji, suppose our total agriculture, even today, 90% is jewel loan. So just jewel loan is 90%. So out of these, INR 18,000 crore, hardly less than INR 1,800 crore in the whole country would be other than jewel loan. So that is spread out many locations, and many of these cases also, absolutely, either it is backed by security or cash flows, these sort of things, our clean loan of cash or Kisan Credit Card, these sort of things are very low. But one more thing we need to keep in mind, even if we have a small portfolio in these states, but it is very well when we talk about it, government will pay the money and all, they are not asking bank to bear the brunt. So that way, the question of we will get the money, but there can be a small shift in the culture of the people for the repayment. But we don't feel that sort of an issue. Agriculture, so much of a deep penetrated other than jewel loan portfolio is there in Telangana for us. So, Jewel basically is going to be a collateral for you, right? Correct, correct. But if the customer says, "He likes me, he will get the waiver," he's not going to pay, right? Correct, correct. You are not going to- We will be releasing the gold only after we receive our dues only. Before that, I cannot release it. So, anyhow, LTV 75% is there, 25%, even if fluctuations also, I have the money with me. So that way, the worry should not be much because I have a backing here. Yes. So what will happen is that if the customer, the farmer doesn't pay, it will slip into NPA. Your provisioning will be lower because you have a security backing. Correct, correct, correct. Provisioning is where the entire amount I'll be able to recover, because if LTV is 125%, then the problem is there. So if I go and sell for sale, instead of suppose INR 100, I will be getting INR 90, and my outstanding is INR 75, I will be able to recover my money and the balance I can return it to the customer. Okay. Sure, sir. That's very helpful. Thanks again. Thank you. Thank you. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Mahesh from Kotak Securities. Please go ahead. Hey, hi. Yeah, good afternoon, sir. Hello? Yes, sir. Yeah, go ahead. Yeah, Mahesh, Mahesh, please go ahead. Sorry, sorry, sorry. Sir, just couple of questions. One, this I know it's a small number, but just still trying to analyze the, this slippages that you are seeing on the retail side, is there any product segment which is contributing to it? Because it's been driving on a consistent basis in recent quarters. Hey, raising in the sense that you see, Mahesh, in fact, our total portfolio under retail, unsecured is marginal. And rest of the product, what all is there, everything is backed by either a home loan or gold. These two are having comfortable security. Sometimes what happens, you know, if you get these sort of slippages in the first and second quarter, it is relatively better for the bank. The reason is, you will have enough time for enforcing the SARFAESI, getting it and all. By the time third, fourth quarter comes, many of them, the SARFAESI process is going on itself. They'll come for a compromise and settle it. So that way, we encourage, suppose, a more or less here and there, sort of an account is there. Instead of prolonging this pain, it is better we bite the bullet and initiate the resolution process so that your ability to recover the money will be much faster. So that way, everything is backed by security. It's a question of time we'll be able to get. So nothing much to worry about that, and no unsecured portion much in this. Ah, yeah. Just wanted to confirm that. Oh, yeah. So second question, on the OpEx line, which, which is currently running at about, little over 25%, the non-staff, right? Any direction as to how are you looking at that number? Which way at the OpEx, sir? OpEx, the non-staff line. Non-staff. Non-staff, as earlier on, sir, I was guiding, so normal course, what all is there, it will be growing just linked to the inflation. But so we have planned for around 100 branches this year. Out of it, 80 branches can be light and 20 branches can be normal branches, which we want to open. And these things are there. Naturally, the overhead cost for these sort of things can go up, but we need not do all those things. But if we do not do it, raising the liability, getting the leads and many areas which is the suburb developing and all, we will be missing the opportunities there. That is the reason what we thought. Maybe it is better we bear the cost for 1 year or 2 years, then by the time 1.5 years, 2 years, they get break even, but next 10 years, we'll be able to reap the benefit of it. Other than that, routinely, if you look at it, normal OpEx is going on, no spikes will be there. If at all something is there, we may spend on IT upgradation, these sort of things. And second thing is the branch openings and the cost for that. These are the issues only which can come up, other than that, nothing much. Okay. So last question: In the last few quarters, you reported 25% of floating provisions. In this quarter, you reported under other prudential provisions. Is there any difference in these, sir? It's a good question, Mahesh. In fact, I'll tell you, when we were commencing this particular provisioning, we clearly mentioned that because at that time, unknown, unknown guidelines were there, actually, where we will be landing as far as ECL is concerned. So we thought that let us provide something. When we have provided INR 100 crore and the, and within calculations when we made, more or less the provision what we have made would be sufficient enough to take care of any shock if the RBI releases the guidelines. So that is the reason there is no point in bloating that particular provision, INR 200 crores, INR 300 crores, and all, it doesn't make any sense for us. So that is the reason we have shifted this side, so that it can be helpful on the stress side. If at all, tomorrow comes up, those things will be, eventualities can be taken care of. That's it. Okay. Okay, thanks. Thank you. Thank you. Thanks, Mahesh. Thank you. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Nagesh Vutukuri, an individual investor. Please go ahead. Good evening, sir. Good evening. Good evening, Nagesh. Please, how are you? Good? I'm good. Thank you, sir. Please, please. Congratulations for a good set of numbers. Thank you, sir. Thank you. Just wanted to know why the tax provision has gone up, sir, for when the profit in the last quarter was INR 573 crore, you have made a INR 117 crore provision for tax, and this year it is out of INR 612 crore, INR 154 crore has been provided. That is one question. Okay. Secondly, any expectations of bonus issue or something? Because there's a gap of about 6 years which you have done, and very small bonus has been given in 2018, 1:10. Regarding the bonus issue, I'll tell you, currently there is no thinking as yet in the board also. At the appropriate time, whenever the board feels, we can think of, but currently we try to strengthen the capital this, because the growth what all is coming, so which require some sort of a capital. That's why we do not want to make any shift here and there currently. So but as you mentioned that, at the appropriate time when the board feels, sir, definitely we'll keep that particular point in mind, sir. Coming to the- I think the results have gone up, more than INR 10,000 crore for the first time. I know, I know, I know. I know, sir, I know. But you see the other side, the retail growth is also going at 21%. So there, in the meanwhile, RBI has also increased the risk weight for the capital for many of the products and sectors. So these things, we need to take care of that. So we will gauge all these things and all, what call has to be taken by the board. Appropriate call, we will take it, sir. We will keep that point in mind. Okay. Sir, on the provision for taxation, I just want to clarify. See, the last year, in the beginning of first up to third quarter, we are not so clear on the amount of, what will be the IBA settlement by part, how much amount, though we are being providing it, whether only when it is paid before March or, when it is final, then only we can claim it as a deduction. A lot of unknown unknowns were there. So our provisions were, were around 25%+ on the for taxation. And when, March quarter, when we have the full year review, so whatever is, the provision, what we had made for the three quarters and the balance we get for the taxation for the full year, was, taken care of in the fourth quarter. Even if you see the first quarter also, the effective tax rate comes to around 23.2%, which is as per the tax rates. Okay. Okay, sir. Thank you. Thank you. Thank you, sir. All the best. Thank you, sir. Thank you. Thank you. Ladies and gentlemen, we would take that as our last question for today. I would now like to hand the conference over to Mr. B. Ramesh Babu, MD and CEO, for closing comments. Yeah. Thank you all for your interest and for the participation and serious questions you people ask, which are quite insightful. Thank you very much. As we assured earlier, we will strive to further and show better results than what we have been doing and with the support and guidance and all of you. Thank you very much once again. Good day to all of you. Thank you. On behalf of Karur Vysya Bank, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.