Ladies and gentlemen, good day, and welcome to RBL Bank Limited Q2 FY twenty-five 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 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. R Subramania kumar, Managing Director and CEO of RBL Bank. Thank you, and over to you, Mr. Kumar. Thank you very much, ma'am. Good evening, ladies and gentlemen, and thank you for joining us for a discussion on our bank's financial results for the second quarter and half year of the financial year twenty twenty-five. We have uploaded the results along with the presentation on our website, and I hope you have had the chance to go through it in detail ahead of this call. I am, as always, joined on this call by Rajiv Ahuja and other members of our management team to address any questions that you have. I will spend the next few minutes talking through our progress on the broad-based parameters, after which Mr. Jaideep will take you through the financial numbers in detail. First, on macros. We are seeing secular growth in India's macroeconomic landscape, highlighted by the recent GDP projection as in the range of 7.1% to 7.2% in 2024-25. We believe growth continues to be supported by a strong private consumption and rising investment levels, and with the recent changes in monetary stance, we expect liquidity conditions to improve, facilitating credit growth across sectors. In FY 2023, we have laid out our vision for 2024-26, covering our target growth of 18%-20% in advances and deposits, 50% plus share of granular deposits, retail mix of 60%-65%, PPOP growth higher than advances growth, and in the range of 1.3 ROA by FY 2026. We continue to be confident of achieving this. We have articulated this before, and we continue to strongly propagate our overall thought process of looking at our growth in terms of individual business segments, plus the synergetic one RBL Alpha that we are in the process of executing. On individual businesses, I have been talking about retailization of our assets and liabilities, and the story is born out of the numbers itself over the last two years. We have seen secured retail assets grow from approximately INR 10,000 crores in September 2022 to INR 23,000 crore now in September 2024. Similarly, retail secured disbursements during this period has grown from approximately INR 600 crores per quarter in September 2022 to approximately INR 2,300 crores per quarter in September 2024. Our liabilities growth has been robust, with the granular deposits growing 22% YoY, while total deposits have also grown 20% in the last year. Importantly, our average current account balances have also grown well at 22% YoY, led by both branch banking and our corporate relationships. On wholesale banking, we have reimagined our approach and now seeing results. Our wholesale lending business now runs largely self-funded, focuses on well-rated clients, and the commercial segment specifically is targeted towards mid-sized corporates with whom we can have a holistic relationship. Overall, we have also materially de-bulked and de-risked this business. On cards, as we have said in the recent past, we are consolidating our position and looking to leverage the customer base for multiple products while focusing on improving the profitability of the business further. On microfinance, the momentum of growth is on a near-term back burner as we face on-ground issues with the borrower leverage, borrower multiple lenders, et cetera, but this appears to be settling for now. While the favorable liquidity and growth conditions have been beneficial to us, we have also seen near-term episodic impact related to the credit quality on a section of borrowing universe as unsecured credit, for us, mainly in credit card and microfinance. I will briefly touch upon the why of this aspect, while what will be covered when we go through the financial numbers. In case of both credit card and microfinance business, it is notable that when compared with the comparable peers, we still continue to maintain higher collection efficiencies across buckets. While credit card slippages have largely been on account of the impact of changeover of collection services from our large co-brand partner, the benefit of this transition, both in terms of our control and ability to manage this going forward, far exceed this impact. Our analysis has clearly shown that this near-term challenge on credit card slippage is a function of time and scale of this transition program, and has negligible causal relation with the portfolio quality or customer profile that we have. On cards, we have also shared some data on the trends on collection in our presentation, and, as we exited Q2, we have seen the collection efficiency in the current and the early buckets materially improving, nearly back to the levels pre-transition. And this gives us the confidence that this pressure is largely behind us as we enter Q3. On microfinance, while the impact of this over-leveraging has resulted in near-term impact on the asset quality, the fundamentals of the business model remain robust. We continue to have one of the lowest ticket sizes in this market. Our portfolio mix philosophy is focused on improving renewals on the existing borrowers, while limiting exposure to only one loan per borrower. We have also invested in remodeling our collection platform with digital tools. Advanced analytics and separation of recovery teams to improve collections, and many such efforts will hold us in good stead as we navigate the current condition. While we are seeing improvements in efficiencies as we exited September, and with the industry now adopting conservative lending practices, our estimate would be to see this near-term impact bottoming out through Q3 as efficiencies trend upward and return to normalcy in Q4. In summary, our bank has been seeing consistent growth in secured retail and the granular liabilities, well above the overall growth of the bank. In the near term, there are challenges in credit cards and microfinance. The credit cards is returning to normalcy, and microfinance is trending to be to improve performance. We have also shared the progress of our journey in achieving our planned targets. As you can see from our investor presentation on slide 22, the newer businesses are getting close to breakeven, and as we come out of the near-term stress, we should be able to get back to our profitability journey. Our branch banking business continues to drive granular deposit growth with improving accretion, what has been a challenging deposit environment. We have been able to grow without really compromising on deposit rates, while the general trend in the industry has been higher deposit rates. At the same time, our wholesale business continues to be steady profit generator with multiple legs into liabilities, trade, cash, foreign exchange, et cetera, reducing the dependency on asset-led revenues. We are quite pleased with our growth in the newer secured products, and are now also walking down the path of affordable home loans and small and micro business loans, which has better risk reward dynamics. The proportion of the affordable housing and the small ticket secured business loans has reached 15% of our disbursement in housing and the business loan, and this is expected to materially increase over the coming quarters. The branches and self-sourcing are increasing in proportion in secured retail, especially in housing and business loan, and this trend will improve the pace of profitability. As we committed a couple of years ago, we stabilized the bank and set it on the right course of growth, with the new products moving towards a more diversified revenue generation path. Cards and microfinance are clearly a profitable business, with the resilience to withstand the near-term challenges and will revert to a better earning profile. Wholesale banking continues to steadily improve its contribution to the bottom line, and the newer businesses are improving their operating leverage. I will now hand over to Mr. Jaideep to take you through the financial results. Thank you, Mr. Kumar. Good afternoon, everyone. I will briefly take you all through the financial numbers. Advances for us grew 15% year-on-year and 1% sequentially. Within that, the retail book grew about 24% year-on-year and 2% sequentially. The slightly muted sequential growth in retail was due to consciously reducing the growth in microfinance, given the current industry conditions, and the focus on collections. And as soon as we see collections come to a pre-stress levels, we should be able to then push the pedal on growth, which we expect should take anywhere between three to six months. Our non-microfinance retail disbursements this quarter was 3,200 crores, which has grown 18% sequentially, so the focus continues really to kind of give the thrust on secured loans. Which has grown, housing loans have grown at about 56% year-on-year, and rural vehicle loans, which we introduced about two years back, has been growing at about 58% year-on-year. Within wholesale, given the fact that we should be focused on the right risk reward, commercial banking has been a focus of growth, and that has seen a growth of 17% year-on-year, even though the overall wholesale book was flattish sequentially, and I think that's conscious that we are focused on segments where we think we can get meaningful business opportunities with our clients. In credit cards, one of the... paths that we've started working about a year and a half back was to reduce the dependence on a single large co-brand partner, and also not only get to new co-brand partners, but also have an organic path for acquisition of customers, both through branches and through direct distribution. Happy to say that we have now inverted the proportions. We were 65%-70% through BFL and 30-35% through all other segments of origination, and now we have reversed that to almost 64% through direct sales and other co-brand partners, whereas BFL co-brand has now come down in terms of origination to about 36%. As you all know, we have recently also launched co-brand cards with the Indian Oil Corporation, IRCTC, and TVS Finance. But the bigger focus is also on self-distribution network. We now almost have 3,000 people on the street, along with branches, to be able to sell directly the RBL card. On deposits, we've been saying this for a while, focus is on granular deposit growth, and we transparently disclose the deposit contribution that is there from less than INR 3 crore, which is the definition of retail deposits for us. And that's now about 48.5% as a contribution to total deposits. And this has grown 22% year-on-year and 4% sequentially. Typically, the effort will be that this grows at a pace which is higher than the overall deposit growth. CASA has grown at about 13% year-on-year and 10% sequentially, led by corporate flows. I think we are holding relatively steady if you look at the daily average CASA. There is competition for deposits, as we all know, but we continue to see reasonably good traction on deposits, and I think we are quite comfortable in saying that, granular deposit growth and overall deposit growth is not really a constraint for us to get to our targeted growth on advances. Branch banking-led deposits, which is essentially deposits sourced by branches, which will include some bulk deposits, that grew about 29% year-on-year and 7% sequentially and accounts for about 62% of our total deposits. LCR continues to be healthy at about 129% for the year, for the quarter. We've been in this range of 125%-135% over the last six to nine months. Our NII was up 9% year-on-year, but down 5% sequentially at INR 1,615 crores. NII growth was impacted on two counts. One, we had lower dispersals in microfinance this quarter, and therefore, the average book in microfinance was lower. And I think the bigger contribution was also from the fact that, we had a higher than trend slippages in both cards and microfinance, which did cause interest reversals. Also from a sequential comparison, you will recall that we had an additional INR 69 crore bump up in NII in Q1, on account of tax refund. If I exclude that, we still have almost a 35-40 basis points fall in sequential margins, and largely because of the reasons I just alluded to. Cost of funds have largely stabilized with cost of deposits at about 6.53% and cost of funds at about 6.57. Hopefully, therefore, we seem to be past the hump in terms of largely increasing trend in cost of deposits that we have seen. Give or take, we should be in this range, few basis points here and there, before hopefully we start coming down, which of course, will be a function of the interest rate environment in the economy. Our other income has shown quite a lot of resilience. We are at 927 crores this quarter, 32% higher year-on-year and 15% sequentially. Of this, core fee income grew 21% year-on-year and 7% sequentially to 822 crores. We were, of course, also benefited by favorable G-Sec movements and some equity market-related gains in the non-core fee income growth. Our total income, as a result, was up 17% year-on-year at INR 2,542 crores. In spite of pressures on margins, which we just discussed, we've been able to offset some of that through better fee income performance. Our OpEx growth continues to be lower than advances and income, as we've said in the past, and grew at 13% year-on-year, marginally lower sequentially, actually, to INR 1,632 crores, and as a result of which, our cost to income was slightly better at 64.2% this quarter as against 65.7% last quarter. Our pre-operating profit was at INR 910 crores, up 24% year-on-year. Let me now come to asset quality. In terms of GNPA, we are at 2.88% and NNPA at 0.79%, both marginally up sequentially. PCR continues to be healthy at 73%. Our total net slippages was INR 817 crores, and almost entirely was contributed by cards and microfinance. So cards was about INR 606 crores, and microfinance at about INR 231 crores. So effectively, between wholesale and retail was effectively nil. In fact, wholesale had a recovery on a net basis, and therefore a negative slippage. Our restructured advances also have come down to 0.38% against 0.44% in Q1. As we continue to see paydowns by customers, this is, of course, restructuring that happened during the COVID period. ... on provisioning, at an operating level, while we have seen, steady performance, we've seen higher, higher than normal provisioning, primarily because of slippages in cards and microfinance. As we've taken a total net provision on advances, of INR 662 crores this quarter. As a result of which, the credit costs came at about 80 basis points as compared to 59 basis points last quarter. Our net profit, for the quarter, therefore, is INR 223 crores, which is down 24% year-on-year. Let me briefly also provide some details on asset quality trends in cards and microfinance, the two businesses which have seen some headwinds in this quarter. As I said, the entire provisioning of this quarter is due to increased slippages in cards and microfinance. All other businesses have negligible to nil slippage and credit costs cumulatively. Starting with cards, there has been an increased impact on slippages in cards due to Mr. Kumar alluded to, due to specifically in the BFL co-brand portfolio as a result of the collection transition that we consummated in July of this year. We've actually shared some more color on the asset quality trends in the cards portfolio over the last six years, and this includes the split between the BFL portfolio, BFL co-brand portfolio, and the RBL, the non-BFL portfolio. If you look at slide 35, when you get a chance, it shows that the elevation of slippages and resultant credit costs have been on account of the collection transition. The RBL portfolio ex-BFL has held up very well and has seen marginally lower slippages in this period. However, in the BFL co-brand portfolio, we saw early trends last year, which stabilized and then got impacted by the transition on collections in this quarter. The good thing is that, the flows into first bucket, which is a leading indicator of slippages, have now come back to historical levels on cards, which we believe will continue and result in lower slippages from here on. We clearly expect slippages in cards to go down materially in Q3 and come back to close to normalcy by the time we come to Q4. Given this, we don't see this as a portfolio concern. It is more peculiar to us and the circumstances here. On microfinance, our collection against current month demand is basically current month demand is the denominator, and current month collections being the numerator, is at 97.1% for September end. While we are hopeful-- While we were hopeful that we should touch 98% because we had seen this dip to 97% in August, we were hopeful of this touching 98% in September, but that hasn't happened. As some of the states saw a dip in collection owing to floods, specifically Bihar, which is, as you know, would be around 30% of our portfolio. We have given a trend on the collection efficiencies in microfinance as well in our investor deck on slide 48. While we are better in September over August, we are still well below May, June levels on the current collections. States such as Rajasthan, Punjab, and Jharkhand, which were problematic earlier, have now turned around and have shown material upswing in collection performance. Bihar, which is our largest state, was also on course actually for bettering August, until last week of September, when the impact of floods restricted the movements in large parts of the state. We hope that this is kind of quickly changing in this month, and we go back in Bihar, which will make a big difference to the portfolio, if we go back to the 98% levels, by sometime in October, November. We continue to emphasize great focus on collections, especially in early buckets, and we've actually made some changes in the added manpower, have dedicated teams now looking at thirty plus and sixty plus, given the current situation. The correlation we have seen with slippages is that customers with high leverage and borrowing from a large number of lenders have seen higher deterioration, though there is some deterioration even in the lower leverage customers and customers with lesser number of lenders. So, while there is higher impact, but there is impact even on the so-called normal customers in that sense. Unfortunately, for us, we've been very, very guarded in the way we do business. If we don't have more than one loan per borrower outstanding at any point in time, we don't do multiple loans to to borrowers. And therefore, why... At the time of sourcing, you know, we have the benefit of being able to select the kind of customers we want to onboard. But subsequent leverage to those customers is not something that is completely in our control. And therefore, in that sense, I think the new MFIN guardrails, which are coming in place, and most lenders seem to be adopting it quite quickly, should therefore improve the situation materially as we go forward. I will just want to remind investors that we continue to hold contingent provision on cards and microfinance at 1% of the book. As of September, this is INR 283 crores. We haven't utilized any of this. These were created for the purpose of mitigating adverse outcomes during portfolio downturn, and we will, at some stage, look to use the contingent buffer for provisioning as we see the situation on the ground improving. Lastly, just a quick word on capital. Our capital, including profits, was at 15.92, and our Core Equity Tier 1 was at 14.19, and this was actually an improvement of almost 35 basis points sequentially, which is normally we would guide 15-20 basis points reduction consumed by growth. I think there has been a combination of the quality of growth coming through more lower risk-weighted assets kind of businesses, resulting in very low increase in consumption due to growth. And we've had some reduction in market risk and some reduction due to optimization that we've done on capital, so we are quite happy to say that we are at about almost 14.2 on Core Equity Tier 1. But we will again, from a guidance standpoint, we will still say that we should burn about 15-20 basis points capital every quarter on a steady state. So that's it from my side. With this, we will open the session for question and answers. Thank you very much. We will now begin our question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Rikin Shah from IIFL. Please go ahead. Thank you for the opportunity. I have a few questions. So the first one is on card. The credit card acquisition run rate has slowed down by 40% YOY to almost 3.7 lakh now. Despite new additions to the co-branded partnerships, would you believe that this is the new acquisition run rate, or can this further accelerate? That's the first one. Second one is on MFI. The top three state exposures for us is materially higher than the peers and the industry. Bihar is one of that. What are the other two states which constitute among the top three? And is there any diversification plan there? The third question is, if you could, you know, give out some data around the percentage of customers who have more than three to four lenders, that would be helpful, and just a couple of data keeping questions, but, you know, if you could respond to these questions, and then I'll just quickly ask some data-related questions. Thanks. Yeah, thanks. Again, on credit card acquisition, yes, we've kind of consciously looking at mining the portfolio much more than looking at just growth. I think, at a base of 5.5 million customers, we are now wanting to extract operating leverage, and we also had to de-risk growth from our largest co-brand partner. The new co-brand acquisitions that you mentioned is relatively recent, and it'll take some time for it to scale up. But broadly, I think we should be in the 10 to 15 lakhs per annum or 12 to 15 lakh per annum new card acquisition, and not the twenty-plus lakh that we used to probably do in the past, given the fact that we were changing scale. I think we've reached a stage where we want to optimize the portfolio and take the benefit of mining this 5.5 million customers for multiple products of the bank, so the focus is really through a combination of right acquisition and better mining of the existing base. On microfinance, besides Bihar, the next two states would be UP and- Rajasthan. Rajasthan, and both of them have shown improving collection efficiency in September over June, September over August. Yeah, with regard to your question on diversification, we have a very clear-cut plan, which we shared with all of you a year before. And we also know that we have entered into some of the states where the microfinance per se is growing, like the states like Tamil Nadu and Karnataka and South, plus Odisha and others, where we have already started moving up. And it will take time for you to establish the branches and the manpower and then expand. It is a, it's a part of it. Yeah, the other percentage of customers is multiple- Yeah. On customers, if you look at, like, either average beyond two lakhs or if you look at more than four lenders, including RBL, we are broadly in that 9%-10% range of our customers. Got it. Thank you for responding. And just a few data keeping questions. On slide number 47, you mentioned SMA I and II for your MFI portfolio. And even on slide 48 in the bottom chart, there is SMA I, too. So what's the difference in the numbers between those two slides? That's number one. Second, if you could repeat the gross slippage and net slippage for individual segments, which was laid out in the opening remark, that would be helpful. And lastly, if you could just quantify the stock of total non-NPA related provisions, 283 is contingent provision, but in addition to that, any other restructured or standard provisions that we could carry, so stock of that. That's all from my end. Thank you. Yeah. So on the first one, slide forty-seven, because it's an industry comparison, it is as at June, which is unfortunately written in very small font on the bottom right. And the next one is only pertaining to RBL, and therefore, we have the luxury of being able to give you till September. Industry data will come with a lag. The question on... Sorry, was that clear enough? GNPA and gross- Yeah. Yes. Yeah, I mean, if I remember the numbers on net slippage, and broadly, we are at about INR 600 crores on cards and INR 220 crores on MFI, and that is pretty much the entire provisioning. On a- 2.68, huh? Yeah. On the gross levels, it would be about INR 630 crore in cards and about INR 240 crore in MFI. Got it. And, uh- On NPA, that, Yeah, standard other provisioning, which is regulatory required, which is 40 basis points, and very small restructured provisioning, should be about INR 500 crores. Perfect. Thank you very much for responding. Thank you. The next question is from the line of Jai Mundhra from ICICI Securities. Please go ahead. Yeah. Hi, sir, good afternoon, and thanks for the additional disclosures. Sir, I wanted to check on OpEx growth. So some of the questions have already been answered. OpEx growth, sir, this quarter's staff cost has gone up, but the other OpEx, the total OpEx is contained because other OpEx has not moved much. And this could be because the business in some of the business uptake was relatively slow. But if you can, you know, provide some clarity on the growth and the staff cost and how should one look at it? Yeah. Okay. So, in Q1, we had some reversals. We had excess provisioning on bonus payouts, et cetera, which got reversed in Q1, because that is the time when actual payouts get decided. So we were carrying excess provisioning, and therefore, that was suppressed by about INR 25-30 crores. And for us, we gave employee hikes effective July first, so naturally, that kicker comes in the first quarter of, I mean, in the July quarter, which is the reason why July quarter is higher. Plus, we typically do actuarial provisions on our pension and gratuity liability, so there was some impact that came in Q2. Going forward, this kind of delta will not be there. I think the deltas will be much less, largely reflective of the expansion in the employee base that will happen through branch banking and retail. Another reason is that when we did the transition, all the employees were absorbed over a period of time in Q1. Sorry. Now, in Q2, the entire cost has been absorbed. There is also additional cost. Going forward, that will be the normal payout. Yeah. So I think just to clarify, when the collections were done by a third party, it was coming at outsourced cost, as operating costs. When we took it over, it will be a mix of operating costs and our own employees, because management of those agencies is done by in-house employees. So we added about eight, nine hundred employees in the collections across various levels in the card collection division. Overall, the OpEx growth has been much lesser than the advances growth and the profit growth, which we said that we'll be able to achieve that, and we are able to reach that stage now. Very well. And, sir, secondly, the gross slippages in card at 630 would this be, let us say, more or less similar as to what the credit cost that we have shown in BFL and others? I mean, one can more or less have the same proportion as what is in the chart in terms of credit? Yeah, yeah, yeah, because in terms of credit costs on cards, because we provide 70% on NPA and 30% in 120 days, roughly within the same quarter or within one to two quarters, one next quarter, it will reflect roughly in the same proportion. Yes. Right. And so, sir, once this transit... I mean, the transition is finally over, right? I mean, as of, Correct ... October, this is over. Yeah. We should see the same, let us say, 1.5% to 1.7% or 1.8%, that was there in the previous quarters. I mean, as per the chart, we should be hitting that in third quarter itself, right? Is that a fair assessment? You know, the way it works is that the first bucket, if you look at our own exit, and we have, I think, given that in the chart in our method on slide 35. Forty-five. Sorry, slide 45. Sorry, slide- No, 35 ... 35. The first bucket is clearly come back to what it was, or slightly better than what it was prior to transition. But bucket two, bucket three will take some more time. So I think the way I would put it is that we will see a material reduction in slippages in Q3 over Q2, but for it to come back to levels that we saw in Q1 or Q4 of last year, probably it'll take one more quarter. Yes. And lastly, on capital, then, so while we have done capital optimization, and hence the capital consumption is slightly slower, but any thoughts on... because there was some, I mean, have you received any intimation or you think there could be, you know, possibility of higher risk weights assigned to the MSME portfolio? So there has not been anything right now for us specifically on that. But having said that, given that, you know, we've also heard communications having gone to banks, if it is told to us, we will have to do that, so I won't be surprised if that happens. But right now, nothing on that front. If that happens, it will mean approximately forty basis points on capital as an impact. Right. Understood, sir. Yeah, so that is it from my side, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi, Rahul, sir. Two questions. The first one is on the credit card. I see a higher uptake on Bajaj Finance card. So just want to understand the reason why would that- Sorry, can't hear you, Mr. Mishra. Your voice is not that clear. Can you please check? Hi, can you hear me now? Better. Please go ahead. Right. So, two questions. The first one is on the credit cards. When I look at the Bajaj Finance portfolio, it shows a higher uptake. Just wanted to understand the reason. Is it because it is from deeper geographies or because of over-leverage of customers? That's the first question. Second is, when we look at the microfinance portfolio, we mentioned, I think Rajasthan and certain other states where things are improving. So, just want to check, what is the current collection efficiencies in those particular portfolio have improved? ... So on the first one, see BFL co-brand portfolio is spread out a little wider, and this will be the slight increase that we've seen on that portfolio is a combination of multiple things, including leverage, and so on and so forth. I don't think there is any single specific trend that we can say. Having said that, we have, over the last almost nine, twelve months, been trimming on the so-called experimentation that we keep doing in terms of looking at newer, you know, newer experiments on doing business with lower-rated or newer geographies. I think those we have trimmed quite materially, and therefore, impact of that will also start getting visible over the next few quarters. We would expect, therefore, that once the transition impact is over, we should get back to levels that was prevalent, like for non-B cards as well, in the range of, let's say, 5% to 5.5% credit cost, kind of an outcome, is what we are really targeting over the next couple of quarters, maybe two to three quarters. On, MFI, if I look at it, all the states which are contributing somewhere 39% of my total stock, which comes around five to six states, there is an improvement of somewhere around 1% more over that of what is provided the lowest. The another state where we are seeing that the issue is the Bihar, which is having around 30% of our book outstanding there. If it moves up to 1% again, that is where we are expecting it to reach by end of this quarter. That will be in a position to tilt the balance towards favorable balance. So that's why we say that end of this quarter will see some positioning back to 99% is what we're looking at. The data, the data makes us to believe that we'll be able to move to that. And major needle is going to come from these states which have already moved up by 1%, and they'll move up further. And another, Bihar. All these three things put together, we'll be in a position to get back to that near normal position for the first bucket. Understood, sir. If I can just squeeze in one last question, sir, on the microfinance portfolio. Apart from over-leverage, what are the other reasons? Because we've been hearing of a large amount of attrition of the collection feet on street, who do not want to go to the collection center, and the lower attendance at collection centers. There's possibly some amount of fraud in the KYC or in the voter identity cards. Yeah. So just want to understand, various other reasons apart from over-leverage, which is the larger narrative in microfinance. Yeah, I will ask, Kingshuk will answer that. Yeah. Hi, Kingshuk here. So, other than over-leverage, and over-leverage also, I don't think is the only reason because of which we see a little stress in collections today. The other point that you mentioned, yes, correctly, we did see a blip in our attrition rates for two months. Especially in the month of July, we did see a blip. But we quickly took corrective action. We aligned the incentive structures accordingly, so that people did make a little bit of extra money. We gave in a little bit of hardship allowance, as well. So, we've been able to bring it back to our BAU normal rates, which we were there in Q4 of last year. So, blip was there for two months, which has been managed. For the last two months, we have seen decline in attrition rates. Other than that, you mentioned center meeting, et cetera, and the, you know, the culture of center meeting getting diluted, et cetera. I don't think there has been a big gap in that, if you really ask me. Culture of center meetings has been on, slightly on the downward trend for the last couple of years now, especially post-COVID. Nothing really has really spiked from that particular sense. I think largely, if we can maintain our people and the number of people in the ground, I think that is what is more important, and I think we've at least done that in the last two months. And hopefully, going forward, we should be able to maintain that and see positivity in collections as well. Specifically on the identity question, in our case, while we've also heard of that, but in our case, 100% of our disbursement is biometric, so we do not have any other means of identity other than other enabled biometric. Okay. Then I just wanted to add to what Jaideep said. We not only take 100% biometric, we have a second KYC as well, which is mandatory. And, the primary being, other biometric, and the secondary, largely would depend on what is available with the customer. So we ensure that there is, two KYC documents from, customers. So, at least our portfolio doesn't really have this problem of, you know, customer having multiple identity and multiple loans with, various... We have not seen that in our portfolio. In addition to what he said, just to add a couple of points on center meeting. As a bank, we are not compromising on conducting the center meeting. If you look at it in the first twenty days, center meeting conduction is almost 100% as far as we are concerned. Maybe during this period of stress, the attendance might have dropped down, but now what we see in the last fortnight or something like that, the data indicates that the attendance is not dropping down anymore. The people are seen on the ground. Understood. So fair assumption that the OpEx will remain heightened, because of these collection efforts? On OpEx, you're saying? I think on, you know, our subsidiary being RBL FinServe Limited, which accounts for 90% of our portfolio, I think from a focus standpoint, yes, I would say collections will be a bigger focus, and if that means some more people on the ground and other initiatives, we will do that, yes. ... for a bank level, it will not materially move, but at a segment level, there will be some extra buck we will be spending on the floor in order to get the money back, and which is worthwhile in my view that, both industry. It's rather than expensive, I will consider it as an investment. Understood. Best of luck. Thank you. Thank you. The next question is from the line of Sandeep Joshi from Unifi Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. My question is on the credit card book. So on slide 39, we have given a breakup of CIBIL score for cards in full. The portfolio with less than CIBIL score of 680 is about 11%, and that seems to be causing the maximum pain. Is my understanding correct till here? This is not at the time of origination. This is at the time of the snapshot that is given. And typically, we will obviously see ultimate slippages proportionately higher from lower CIBIL portfolio, yes. Okay, understood. So the value outstanding for this portfolio will be similar, largely around 10-11%? No, typically, the outstandings would be lower here, so I would say marginally lower, but yes, maybe a couple of percentages lower. Okay, and any corrective actions you want to take over here, we want to take down this proportion of this lower CIBIL score customers, or we are okay with this? No, so if you look at our origination mix- Uh. you know, it's very, very large, almost, I think 97%-98% would be in, Seven thirty. In seven thirty plus. Okay. Understood. So again, on the credit card, since you are mentioning that the majority of stress in credit cards is largely due to transactors, what proportion of these customers would be honoring their loans with other lenders? So that's something that we typically- Typically. keep tracking as a part of collection strategy- Okay. As well. And we've generally seen both sides to customer. In general, I'm saying, not specifically for transition, where customers default with others but pay with us, or default with us and pay with others. I honestly don't have a specific number on the transition portfolio or if they are current with others, but, if that is the case, obviously, it, you know, our ability to collect post default only gets better. Just, Sandeep, for your information, one of the decisions what we have taken is, this transition is need not. It is not something which is because of the customer becoming stressful. It is because of we have not reached him during the transition period, or the efforts which we have put in has been slightly lesser because of the transition handshake. And this quarter, next quarter, the focus is going to be on them. So you'll be able to see some, a better recovery in those accounts, wherever it is. If it is a delinquent portfolio, it'll bounce back to normal, and if it is an NPA portfolio, the recovery will be higher. So this is the focus area we are working, because it is not a. We have not identified this as a stress due to the customer. Okay. Okay, understood. So, is it possible to say with a reasonable confidence that at least, let's say, 60%-70% of these customers would be honoring their loans with other lenders, or it's difficult to comment on this? No, no, I think- It's difficult to comment, because in the absence of the data, it will be too- Yeah. because we haven't done that particular slice. Uh. Anyway, we'll look at it as a point. Yeah, maybe we can take this offline, and we can try and give the data, yeah. Yeah. Okay. My second question is on the microfinance book. I'm not sure if we have shared the data with respect to unique RBL customers and maybe RBL plus one lender, plus two, and maybe plus three. No, no, we haven't shared that data. Okay. Approximately 40-45% of our customers are only RBL, and if you look at RBL plus four or RBL- Okay. - greater than that, or two lakh average, broadly 18, 8%-10% would be in that bucket. Here also, the point is, it's gone up for the simple reason that at the time of sourcing, they might not, because our RBI doesn't permit that to be, I mean, uptick. It will not be sanctioning it. It will not go through. But subsequent to the borrowing from us, these borrowers, we have very little or literally no control for them to borrow from elsewhere. This number has gone up only because of that. Oh, understood. And maybe my last question is on the ROA. I heard that you are kind of maintaining your guidance for the next year ROA about, let's say, 1.3% for the financial year 2026. But for financial 2025, can we guide for any number? Sorry, for the current financial year? Yes. No, so fiscal 2026, we are, we continue to stick to that 1.3%-1.4% exit ROA guidance. Yeah. You're asking for guidance for this current year, is what you're asking? Yes. Uh- Yes, for current financial year. Yeah. No, I guess we are in a slightly uncertain environment, and therefore, I would say that it is harder to predict. Suffice to say, obviously, we will be well below what we were wanting to be in the one point one zone. We are not going to be close to that at all. Sandeep, keeping all the current the stress point what we have been explaining very clearly, one is due to the transition, other one because that's only two parts. All other businesses are positive. I would like you to focus on our projection of twenty twenty-six and then stick there, and that's what we are working on today. Because instead of giving a plaster, we wanted to have a complete the transitional issues are fixed up, and we move on to the number what we said for guided for twenty twenty-six. In fact, we've tried to, in a way we can communicate, we have given that information in slide 22 as to how our various businesses stack up. And, clearly, the current... I mean, while wholesale has improved over the last three years, quite materially, similarly, our new businesses in secured retail, where we are investing, has improved from a higher loss to a lower loss... We've obviously seen a material reduction in returns in our unsecured businesses, in H1 as compared to the previous two years. And I think the moment that reverses, which should likely happen, Q4, Q1 onwards, we should be coming back to trend profitability. Understood. That helps. Thank you. I'll come back in the queue. Thank you. The next question is from the line of Gaoy ang Xiao from GIC. Please go ahead. Hey, thank you for the opportunity. Just some housekeeping questions. So for the INR 618 crore of provision charges in the P&L, do you know, break it out into what's the provision on NPL? What's the standard asset provision? And is there any changes in, you know, any other form of provision beyond instruments, et cetera? So, you are looking at a split between advances provisioning and any other provisioning, right? Yeah, I have the slide, man. Yes. Just give us a minute. Just show the slide. Yeah, we have advances provisioning. Sorry, can you hear us? Always. Yeah. No, it's okay. Just on- No, no. No, no, we are getting the data. Just hold on. Sorry, if you can hear us, we are ready to share the data. We have on standard advances, we would have taken a provision of about INR 10 crores. Pretty much the rest of the provisioning is on NPA. The condition will be secondary. Sorry, I'm just looking at on slide fifty-nine. There is, you know, negative forty-four crores on the other provisioning. So just wondering what's that, please? Forty-four crores. Yes. Yes, yes. So we have sold a portfolio of security receipts that we had, and that released certain provisioning for us. We were carrying provisioning more than the fair value of those assets, and we sold that, and there was a reduction in provisioning of approximately INR 40 crores because of that, INR 400 million. Got it. Understand. And, can I have your MFI provisioning policy, please? i.e., you know, in 90 days, how many% is provided, and by how many days it's 100% provided, please? Yeah. So we provide 25% every quarter. The quarter in which it becomes NPA is 25%, and subsequently, every quarter, we add 25%. So in four quarters, we provide 100%. Got it. Thank you. And lastly, just on capital, how should we think about our capital positioning? So in the unfortunate case that RBI ask us to, you know, increase risk weights on the MFI, plus the usual, you know, capital consumption on a quarterly basis, you know, how should we think about capital raises and our loan growth from here? As I said, if the one-time impact on MFI would be about 40 basis points, and I don't think it materially changes the consumption, because incremental growth in MFI is not really material. Therefore, we would typically look to burn around 20 basis points, give or take, per quarter. We would irrespective of whether MFI risk weight increases for us or not, and which we don't know right now, we would look to at least look at the next 12-15 months before we raise capital. We should be... Our bottom threshold on Core Equity Tier 1 should be in the maybe 12.5-13% range. Got it. Thank you so much. Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Yeah. Am I audible, sir? Yes. Yeah, go ahead. Yeah. First of all, thank you very much for this opportunity. So just I wanted to understand now, you are sounding now positive that things should improve both on the credit card side, as well as on the MFI side, which led to increased provisioning and credit cost in this quarter. So if I have to see at the company level, how do we see credit cost in coming quarters? And overall, for this entire year, what sort of guidance range we can look at in terms of company-level credit cost? So for the year, we should be, you know, anywhere between 2.5%-3% range or 2.6%-3% range, depending on how soon things come back to normalcy. Microphone. Is it safe to say that this quarter, second quarter, the kind of provisioning we have seen, is that the peak or we can see a higher peak, I mean, going forward? So the way I would look at it is that we've passed the peak on slippages and cards. We may not have passed the peak on slippages in microfinance. And microfinance, because of the provisioning policy, will mean that we will keep providing 25% for the same quarter and the previous quarter catch up and so on and so forth. So I would say, yes, I could probably say provisioning is peaked, but in terms of credit costs, I don't think we can say that credit costs will sharply fall off from here quickly. So we will probably take some time before it comes off. ... either we can expect a flattish kind of a credit cost going forward of provisioning, or maybe a slightly downward trend. I mean, that would be a fair thing to assume. Yeah. And then in Q4, we should start seeing it come down. Yes. Fair enough. I, I got it. I think that would be it from my side. All the way best to you. Thank you. Thank you. Thank you. Yes. The next question is from the line of Kunal Shah from Kotak. Please go ahead. Yeah. Hi. So, the first question was, last time, I think, you indicated that the spillover impact due to collection transition could be... Like, it was like last quarter, it was sixty odd crores, and you said, like, there would be some spillover which would come through, in next quarter as well. But eventually, when we look at the number on the credit card, it seems to be significantly higher, okay? So was there any other element apart from, this collection transitioning, or maybe the collection transitioning has given much higher pain than what we anticipated during the last earnings call? I don't think we- The cost. Yeah, I think we said that there was a cost increase- Ah. which was there in collections, because there was a, you know, handover where we will have some inefficiency. I don't think... Okay, it is fair to say that in our own analysis, we were not budgeting for this much of a transition cost due to provisioning, but I don't think there was a guidance of 60 crores, Kunal. Yeah. Sorry, if that was a confusion in your mind. But having said that, yes, the amount of slippages that we have seen due to transition is more than what we anticipated internally. Yeah. And largely, when we look at on a sequential basis, compared to, like, say, INR 400 odd crores last quarter, gross slippage in credit card and INR 630 odd crores this quarter, is it largely that entire incremental delta is due to collection? Or, maybe there is an element of, industry-wide pain and, some stress which you had seen in your portfolio, increased stress in, Q2 in particular? Kunal, the way... So one can never be perfect on this answer, but the data point that we are relying on is that if you look at the- Right. non-transition portfolio, that is not really got impacted at all. In fact, the slippages are- Look at slide thirty-five. Slippages are slightly lower. So if it was an industry-wide phenomenon, we would have seen, some deterioration there. Ah. So therefore, we are kind of concluding that this is largely transition. Got you. That's the data point that we have to share. Yeah. Okay. And transitioning is now entirely complete? I would say- So that delta which was there in this quarter- Yeah. -that should not at all repeat in Q3. Yeah, yeah. Just to clarify again, co-transition got completed in July, on July thirty-first. What we are also giving on in the credit card section on slide is that if we look at early delinquency trend- Slide thirty-five. Slide thirty-five, we are already seeing the turn in early delinquency back to levels which were there well before transition. And that slide, that early delinquency is a leading indicator of what will happen over the next three to six months. So we are very, very confidently saying that we will have a material reduction in slippages in cards. It may not come back to the level where we want it to be, because whatever happened in August will also flow, while September is looking very good. Whatever happened in July will also flow, because there will be, you know, that ninety day. But I think there will be a material reduction, and, you know, as we go into Q4, we should be trending towards fair amount of normalcy, ceteris paribus. Got it. In fact, one of the positive- Sorry. No, just to carry forward with what Jaideep said, one of the positive things what you can observe in the slide five is that the early trending of this collection has increased than what it was, it used to be before this transition itself. That itself is one of the leading indicator makes us to believe that our collection efficiency is improving. Sure. Sure. And, lastly, in terms of the SMA trend, which we look at, okay, so say, SMA, zero being almost more than three odd%, SMA one, 2.45. And as you indicated, that maybe Bihar largely got impacted, which is your largest state, and got impacted particularly, maybe in the last week of September. So, should we see maybe a relatively higher stress maybe compared to what we saw in Q2? You indicated that at least on credit card, you are comfortable, but on MFI, can it deteriorate further? Because the number seems to be much higher on the SMA trends, and there might be a flow-through plus 25% every quarter provisioning would also continue. So in terms of slippages, Kunal, yes, I would expect it to be higher than current quarter. And then we will expect that to start trending down from Q4 onwards. And credit costs, as you said, is a catch-up of 25% for that quarter and the previous quarter was 25. So yes, within microfinance, we will expect credit cost to go up. Within cards, it will come down because cards, 70% get provided the same quarter. So when slippages come down, we should start seeing credit costs coming down in cards. Okay. And lastly, in terms of the clarification, earlier, maybe, have you indicated that by FY 2026, we could even be like 1.4, 1.5, and now maybe we are getting that down to almost like 1.3 odd%? Though this seems to be more like a transitioning cost, and otherwise, structurally, there doesn't seem to be much impact, or we are actually lowering the guidance for FY 2026 ROA to 1.3. Yeah. So, I would say, we were at 1.4 exit. We are now saying that it'll be in that 1.3 to 1.4 zone. Some of that is coming from the current mindset of what we are doing. Otherwise, as we have kind of put it in slide 21, our non-cards, non MFI business, which is wholesale and secured retail, has seen improvement in PBT ROEs slightly better than planned, and, you know, we expect that to kind of continue, so this is a little bit of a combination of current circumstances more than anything else. Yeah, but here we are not changing that in the guidance, like, it still shows like 1.4, 1.5, but we are indicating it could be 1.3 for it. One point three, one point four. Correct, correct. Yes, yes. Okay. Okay. Got it. Okay. Thank you. Yeah. Thank you. The next question is from the line of Shailesh Kanani from Centrum Broking. Please go ahead. Thanks for the opportunity. My other questions are answered. Just one question from my side. Sir, in wholesale yields, there has been a sequential drop by around two basis points, and, year-on-year as well, it has remained flattish, in spite of, we be concentrating on the corporate and SMEs. So where can we- when can we see some uptake from the wholesale side in terms of yields? So this is. There will be some noise around foreign currency assets as well. Broadly, we are Mm-hmm ... looking at wholesale yields stabilizing. And now, even though we will see a relatively better interest rate environment, we would expect this to kind of hold steady or marginally improve as we increase as we go forward. But again, the other important point on wholesale that we want to bring out is that a lot of income is actually fee income and liability-based income. It's a very powerful source for current accounts and SME businesses. So, asset-related income and therefore contribution to ROA, PBT ROA for that segment is actually barely about 30% or so. Check slide twenty-nine, twenty-one. Slide twenty-nine. Yeah. This one or two percent bit you see now, it will be intermediary one, and I would like you to wait for that year end to come, where we will be able to catch up in two quarters also. Yeah. So the reason I was asking is because our commentary in the past has been that there will be some improvement as we are concentrating at lower ticket sizes. So I was just wondering when we can expect that? Here, I just want you to look at the profitability set to set, and again, which is at 21. No, but Shailesh, honestly, it's difficult to predict, quarter on quarter. Attempt is that on a- Annual. On a secular basis, we should try and take it up. As long as the interest rate environment does not dramatically change. I mean, nine months down the line, 12 months down the line, these rates will be down because that is what the ambient interest rates would be. But otherwise, structurally, we are still wanting to move towards the better yielding businesses. Okay. Thanks a lot. Thank you. The next question is from the line of Ashish Khurana from Ank Capital Ventures. Please go ahead. Good afternoon, sir. Thank you for the opportunity and answering all the questions patiently. Most of my questions have been answered. I have just two questions. So, sir, if you look at the other loans category, which I think may be comprised of gold loans, et cetera. So it's a good growth in the last quarter. So that is Q1 2025 versus Q4 2024. But this quarter it has been mostly flat or slightly negative. Is it something related to compliance that we are tempering that down or, is it? No, that was a little bit of a short-term transaction that was done, and that will slowly unwind itself, so I don't think we will see growth in that segment. Whatever you are going to degrow there, that will get into the growth of the respective segments. That is what the flow is. Instead of going for the short-term related exposures, we will be going for the long-term exposure, which is going to be better yield. Okay, so that was a one-off, and we won't be seeing any major growth there, right? Correct. Yeah. Okay. Sir, next question on the operating expenses. So while, I think you have indicated, and also has come down by 150 basis points. But if you look at, you know, the breakups, so the business acquisition cost is the one which has seen about 100 crores decline. So, what is this comprised of? And is it that, you know, you are chasing... You are not aggressively chasing growth, and that is why it has declined, or is it the steady state, the current quarter, and it will keep declining from here onwards? No, so this is a combination of largely business acquisition costs across cards, MFI, retail, et cetera. And I think we will. I don't think this degrows anymore. This will again start growing as we progress for the year. There has been a fair amount of cut in the co-brand partner payouts that we do, given the environment that we've seen in terms of profitability. So that's part of the reason for this. And I don't think that is structural. We will start seeing some increase in these costs again as we go forward. So this current cost to income is again an aberration, and going forward in this financial year, it might increase slightly, right? We'll hold it at the same level because it is a combination of your MI. Income. -income, as well as that of the cost. It is not only the cost factor alone. The income is, which we have already explained to you, that it is not going to hold, it will keep going. And you saw this, the income slightly dipped because of that, reduced disbursement in microfinance. It is going to come back. We already started, increasing the microfinance disbursement. The disbursement may not to peak the level what we have been doing, approximately INR 1,000 crores per month. It will take some time, but now it is, it bottomed out in the last month and the previous month. That is moving, improving from there on. So there will be a contribution, the counter contribution to the increase. What I would like you to take note is that the growth of the OpEx, which was in the range of around 30% earlier, now they've dropped down to 13% now. It will be in the range of 13% to 15%. So to that extent, there will, because in operating investment related things will take place or your stopping and an expansion. So it will be 13% to 15% growth will be there in OpEx, and which will be compensated with the increase in the income, so it will cost income will come down, or it will be holding it. Yeah. So I mean, I would just say that don't hold us to this every quarter. Uh, quarter- Directionally, we should be moving better. That makes sense, sir. So I think, operating leverage playing out is visible if you look, you know, financial year 2023, 2024. I was just, you know, asking about this specific quarter because the bit was, slightly higher. Right. Sir, one last data keeping question. Now or maybe, you know, offline, can you share the exit collection efficiencies for the month of September, June, and March for MFI? I think September has already been shared, 97.1%, for. There in the presentation. For MFI. On slide forty- Forty-eight. I think it's got month-on-month collection efficiency starting January. Page forty-eight. Mm-hmm. We ended in September at 97.5%. So it's got that trend, both of SMA as well as collection effort. So all the way from January 2024 on a monthly basis till September 2024. Slide 48. You can take a look at it later. Okay. Okay. One year is clear. Thank you. The next question is from the line of Manish Shukla from Axis Capital. Please go ahead. Good afternoon, and thank you for the opportunity. The contingency provisions that you're carrying, when and under what scenario are you likely to utilize them? As and when we utilize, we will naturally disclose it to you. But conceptually, Manish, I think the thinking would be that once we see, the pain is done and dusted with, and we are seeing... We are confident of, on what portfolios- Mm-hmm. Things coming back to normal, that is when we will want to possibly use it. This will of course, be subject to board approvals and so on and so forth. So, can't really predict this, but conceptually, that's how we would look at it. So the 2.6%-3% number for full year credit cost that you suggested, that doesn't assume any utilization from this? No, no, no. Okay, fair. For the second half of this year, how should one think about loan growth and margins, that interest margins and loan growth? So- See, as far as the loan growth is concerned, the primary focus of increase or accelerated growth is going to take place in our retail secured, and, which is, revenue accretive growth, plus, it is going to be margin accretive growth. We have done around 24% what we have done. If you take only the pure housing loan, and it is in the range of 50+, and this will definitely go back to the high thirties or on the high twenties, in the range of low thirties. In respect of our wholesale, we, we've already given our thing, and the only thing where we wanted to move up is our microfinance. Microfinance will catch up by this quarter, and by next quarter, it will be able to get to the level what it normally does it. Safely you can say that exit will be the percentage what we have assumed, around 18%-20%. Yeah, Manish, on margins, I think if we, if I were to answer this in a stable environment, largely dependent on interest rate nuances, I think my answer would have been a little more, let's say, clear. I think we are also in this environment of a, you know, high slippage environment in one of the two businesses, Q2, credit card this time, maybe next time, microfinance, and, and therefore, it's a little harder to say. But, but I would say, maybe a marginal downside, if at all, otherwise flattish for Q3 before we start seeing improvements. Okay. And, given the volatility that we've seen in slippages and credit costs in MFI, any rethink in terms of the extent to which you want to stay, keep MFI as part of your overall book? I mean, not just now, over the last five, seven years. Yes. What your experience has been? Yeah. Yeah, Manish, so... Sorry. Yeah, Manish, you know that this is a cyclical business. You will definitely see a downturn as far as this is. If you are able to predict precisely, and you are ready with the contingent buffer, this is absolutely a great business to do with, and I don't think that this is a business risk to me. But however, looking at the balance sheet, we have already made it very clear that we will be in the range of 8%-9% of the balance sheet is what this book is going to hold, and we'll continue to be maintaining in that particular position. Mm-hmm. And all these temporary blips and other things, we have ability to face and do it. And per se, this is a very good profitable one. Even this kind of temporary blips is not going to alter its ability to be, remain profitable. Yeah, Manish, and I think, you know, from a priority sector segment, sub-segment- Yeah. Agri and weaker sections and small and marginal farmer kind of difficult sub targets, I think this is a very useful product, and therefore, that 8%-9% range is where we will at least for the, let's say, the next 12 to 18 months, is what the thought process is. Okay. Missing a PSL is more costly than maintaining MFI, so it's better to maintain MFI. Got it. Okay. And the last question, slide 35 where you've given, collection for early bucket and credit cost. The early bucket collection is not really a good predictor of credit cost, in your view? No, no, it is, it is, it is. It is very, very distinctly- Yes ... a very important input. Typically, in the delta in the resolutions after that impact less because this collection efficiency or whatever, this resolution is on the entire- you know, 20,000, 22,000 crore book, right? Assuming, you know, a 10, 20 basis points change, this that has a material impact. After this, the impact is less. Even at 10, 15% reduction in resolution is less impactful because it's on a much smaller- it's like on a few hundred crores or eight hundred crores or so. So early delinquency is very, very critical. So if you look at Q1, the efficiency dipped to 95.6, as compared to 96.2. That is effectively resulted in that, the kind of flow that we saw. Okay, fair point. All right, thank you. Those were the questions. Thank you. The next question is from the line of Raj Jha from Nuvama Wealth Research. Please go ahead. Thank you. Thank you for the opportunity. So first question is, any guidance on the collection, or you can show, share any data on the performance of Bajaj and non-Bajaj credit card? Sir, we have given this. 35 Details on page, Collection. 35. 35.. Where we have split the portfolio into the BSL co-brand and, you know, the non-BSL co-brand portfolio. Two linear graphs, let's say graphs, clearly shows you that how it is performing. And any credit cost guidance on the credit card business, sir? Currently, we are running high, and I think we are, you know, our model credit cost we should run is in the five- to broadly five- to six% range. Five to five and a half is where we will target. Currently, we are running above that. I think we will take at least two quarters to come back to this level. Okay. So any P&L impact on sell down of INR 250 crore from this quarter? The whole cards portfolio actually of INR 400-odd crores, I think we realized about INR 15-16 crores. This was obviously a fully provided and accumulated on a pool, so. Sir, lastly, on any dividend payout from the subsidiary companies to the parent, that I think we have last quarter. No, nothing. Nothing, nothing. Nothing. Okay. Yeah. Thank you. That's it from my side. Thank you. Thank you. The next question is from the line of Anand Dama from Emkay Global. Please go ahead. Hi. My question is on the staff costs. So this quarter, you said that there were higher payouts. There were, I think, increased collection costs also, because I think you have hired a lot of employees. So how do you break that into the kind of payout that you have done, and how much do you think the costs will come down in the third quarter? No, no. So, Anand, costs, employee costs will not come down. So the bigger reason is that Q2. If you're looking at a delta Q2 over Q1, Q1 had the benefit of almost INR 30-35 crores of relief due to various factors. And then we've seen three reasons why costs have gone up in Q2, in addition to the reduction in Q1. So if you remove the 30-35 crore delta impact, then the rest of the increase is about, I think, INR 30 crores or so. And that is a combination of increase in collection team, which was a significant increase of about 800-900 people, which came in, and which would have reduced cost from a vendor standpoint, because otherwise this was going as a vendor payout. Then we had obviously we have increase in salary hikes for us coming to effect from July first for the entire bank. So that was the second reason for the bump, which will of course not repeat till next July. And the third reason was we had a slightly higher, some impact on gratuity and pension liabilities, which in the range of 7-8 crores, which was through actuarial liability, actuarial valuations that we do every six months. Now, the growth from here on will be more related to normal expansion of people, which is not going to be anything material. I mean, this will go up on a normal 3-4% a year type, 3-4% sequentially type, assuming a 10-15% increase annually. Okay. Secondly, on the credit card, you said that this obviously will gradually normalize in the credit card, but what about the collection of the loans which have actually become delinquency in the second quarter because of the transition? Yeah. So I think we will expect to have better recoveries and resolutions from this portfolio over the next six months. But ultimately, once a card slips, typically recovery is in that 15-20% or 10-15%, and maybe it goes up a little bit because this is this portfolio was it not necessarily only because of a customer issue; it is also because of transition issue. So we will expect a slightly better performance on post-ninety, post-twenty, one-twenty recovery, which will help cushion the credit cost. But the accounts which actually turned delinquent in second quarter, do you expect that to recover by at least fourth quarter? I mean, if it is primarily only because of transition costs. No, no, no, I don't think we can say that. I think once something slips, if we were recovering X, we will probably recover two X, but it's not going to be anywhere close to 100%. The behavior changes. Thank you. The next question is from the line of Ashlesh Sonje from Kotak Securities. Please go ahead. ... Hi, team. Good afternoon. Just a couple of questions. Firstly, on the MFI book, how is the trend now in flows from the current bucket to the SME bucket? Has that flow at least shown any improvement recently? See, the MFI, in the month of September, we are the early up to that, excepting the last three days, we saw that it was just going better collection. And the last three or four days, there was a disruption in terms of the holidays and, I don't know, weekends. That is just, we just believed our belief that it is going to reach out. But the early first 15 days of this month makes us to believe that it is just going up. This is overall portfolio. In respect of the 39%, which is set around eight states, we have seen 1% improvement in last one month over what it was, where it just slipped down to 97 as an average. In these states, it went up to 98. So Bihar is a state where we anticipate that it is going to increase by another 1% during this particular month. And which was disrupted, which might have improved or played back in last month because of floods in that particular area. Around 12 districts where we are operating got impacted. This is likely to come back. Maybe it's too early to predict everything. Maybe by end of the month, we will be able to say that whether Bihar is also able to add up to the additional 1%. However, the team on the field is confident of the fact that we may reach near 99 by end of December, in respect of overall collection, whenever the normal collection is in the range of 99.2, which we've picked it. So this is what it is. Okay. So if I understand correctly, you expect the month of October to be better than September on collection efficiency, which means that your expectation that three Q slippages being worse than two Q is purely because the... because of flow from the- Flow. Correct. It's a fair assumption. While the flow from current bucket to- Early decline. Is that correct? Yeah. Correct, correct. Okay, perfect. And just, a couple of policy related questions. For your MFI customer who has fallen into NPA, do you have any cooling period or a waiting period for him before he becomes eligible for a loan renewal? So we do not give any loan to a customer who has turned even- NPA 10-day delinquent in one DPD, and for ever DPD is what? Ever. Ever. So, yeah. So forget NPA. I don't think we, we don't give that at all, and even offers performance, if it is, you know, more than 10 delinquency or something, then we don't give, we don't disburse the loan, so the question of giving loan to an NPA customer- Doesn't arise ... even after five years, doesn't arise. So, and we also give only one loan per customer, so we don't have multiple loans running to any customer. Over and above, we also have the household assessment also. If anybody in the household is also in delinquency, he will not be getting it. It's one step ahead. It's, I mean, guardrails are pretty- Yeah, just to add, even in a second cycle customer, a customer who possibly paid us all the EMIs, and in the family, if there is a default, which is visible from the bureau, we would not lend to the same customer in the second cycle as well. So I understand that you do not lend to any customer who has fallen into NPA. But just in case that customer comes back and repays his dues to become current again, would then he become eligible for a renewal? We have a normalization period of six to 12 months, wherein he suppose he has become complete- Twelve, twelve months. Twelve months. Twelve months, then he will be eligible for getting it again. If he has repaid the entire amount, it is not the question of write-off and things like that. She will pay it. Huh? She will pay it. She. And just one last one. In the credit card portfolio, you have mentioned this early bucket collection. Can you define that term for us, please? What is the numerator and denominator? Numerator would be people who have paid the statement which was due, and denominator will be all due for all statements for all customers. Demand. Demand, effectively. Okay. Okay. Thank you. Current month, current month. Current month, current month demand, sorry. Current month demand and current month payment. Payment. Numerator is current month received, denominator is current month demand. Thank you. The next question is from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead. Yeah, hi. Good afternoon, everyone. Thanks for the opportunity. A few questions I have. First is around the deposit growth. We have had a very strong quarter on deposits. Even the SA growth is very strong. So what has really driven this, and how sustainable this growth is? See, as far as deposit growth is concerned, the minimum given is between 18 to 20, we will be able to sustain. The way we also explained that the current account is the flow of the, I mean, the corporates during that quarter end, where it just reaches around, 12-13 thousand crores, which is averages top somewhere around 9 thousand, 10 thousand crores. But the SA growth, yes, we are able to add on to the SA growth, and, we will be able to maintain that growth. I'll ask Deepak to give you more data if he has, anything else. See, apart from what MD sir has said, we have taken some corrective steps also, like we are now focusing on branch profitability, which is again a proxy for deposit growth. We have also categorized the branches into different categories, and RMs are focusing on sort of enhancing the category of their branches. All these are aiding. As I am telling, apart from the quantum, even the quality is improving, and as communicated by MD sir, we will continue to maintain this 18%-20% growth year on year. ... Okay. And, second question I have is on the LCR. Now, this quarter, we had a fairly strong deposit growth. Quality, as you were saying, is also getting better, but LCR has dropped sequentially. So what has changed? Any change in the runoff factor that we have incorporated, this quarter? No, no, no. I think LCR is a daily average position, and it is a function of daily average inflows and outflows. There has been no change in either assumptions or formula. If at all, I think if you look at outflow, and I think there will be disclosures of LCR on the website already. The outflow as a percentage of total deposits are also holding steady to marginally coming down because as you do more retail deposits, you will have a lesser runoff factor. So, the LCR is a daily average for the month, for the quarter, actually, on a daily average basis. Whereas what you are seeing on deposits is effectively while there is definite improvement in deposits, but that is a particular day-over-day comparison. Okay. Okay, got it. And, on the employee side, if I see, like, this quarter, we have added, like, more than 1,400 odd employees. This is like 10% of the outstanding employee base. Even last quarter was equally strong in terms of net employee addition. So what is the strategy? Which business functions are we really hiring for? Because one of the employee intensive business, like MFI, is improving slow in disbursements right from the first half. So what is the strategy here? And, yeah. Yeah, Nitin, I think this particular quarter was clearly driven by the fact that we in-housed the collections from, the co-brand partner, group entity. Basically, collections and cards is a combination of employees and, agencies. To manage those agencies, we need employees, so naturally, we almost hired nine hundred employees in the collection vertical, which otherwise was housed with, the vendor or the partner or whatever, right? So that itself is a largest contribution for the sequential growth in employees for Q2. Okay. Other than that, our growth in employees is largely going to be driven by branches. As we expand branches, we expand retail sales. That would be the primary driver for employee growth. Got it. And just lastly, a data-driven question, interest reversal number this quarter, if you can share that. Interest reversal number for this quarter would be in the INR 120 crore range. Hundred and twenty, yeah. Mm-hmm. Okay, and next quarter, when you say credit cost will be ballpark similar, so this number will remain broadly? Credit cost for next quarter, yeah, should be similar or slightly lower, yes. The card is definitely lower. Yeah, card would definitely be lower. Definitely lower. As far as the MFI is concerned, looking at the end of this month will be a clear indication. But going forward, we are of the opinion that it will be slightly... It cannot be the same level what it is. It will be more than what it is today, but it will not, peak. That's what we feel. Anyway, we have to wait for, this month-end data to showcase that. Got it. Okay. Thank you so much. Thanks. Thank you. The next question is from the line of Anurag Mantry from Oxbow Capital. Please go ahead. Yeah, hi. Just one clarification regarding, you know, the use of, contingent, contingency provisions potentially. I mean, how does that impact maybe your, the transition that you are looking to do for ECL eventually? I mean, if you use these provisions, won't that impact the transition, there? No. I think the contingent provision was- Created. If we did not have the current, let's say, heightened slippage challenge that we are currently seeing, then the contingent provisioning would have satisfied potentially the transition to ECL, if that was applicable from April first next year. If we theoretically use contingent provisioning during the current fiscal, and if we have to transition to ECL April first, if that guideline becomes effective, then we will have to take the entire thing through net worth, which anyway would have been the case. Got it. Understood, and just one clarification on your loan growth guidance for this year. I might have missed that. Sorry, pardon? Sorry, can you repeat the question? Your loan growth guidance for this year, I think I missed that? Yeah, see, maybe a temporary period, but we will be in a position to go back to that, the guidance what we have given so far. 18-20% is what we have guided. Mm-hmm. Got it. But, given currently your 15 and, you know, cards and MFIs are having these headwinds, do you still see 18-20 possible for this year, or that's more like FY 2026? As I told you, that microfinance is just moving up as far as disbursement is concerned. They'll be able to reach out to the position maybe by end of this quarter, so that they will be able to contribute for the exit. Got it. Okay. Got it. Thank you. Thank you. The next question is from the line of Rakin Shah from IIFL. Please go ahead. My question got answered. Thank you. Okay. Thank you. We now conclude the Q&A session. If you have any further questions, please contact RBL Bank Limited via email at ir@rblbank.com. On behalf of RBL Bank Limited, we thank you for joining us. You may now disconnect your lines.