Ladies and gentlemen, good day, and welcome to the SBI Cards and Payment Services Limited Q3 FY 24 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhijit Chakravorty, MD and CEO. Thank you, and over to you, sir. Thank you. Good evening, everyone. I'm pleased to welcome you to the quarter three financial year 2024 earnings call, along with my senior management team at SBI Card. Indian economy continues its steady growth rate. India's GDP is expected to grow at around 7% in financial year 2024, as per the National Statistical Office and RBI's projections, and their expected projections for 7.3% and 7%, respectively. One indication of this resilience is the positive consumer confidence. In fact, as per some studies, India has emerged one of the most optimistic markets across the world. The credit card industry has been experiencing robust growth, with outstanding cards reaching 97.9 million as on December 2023, witnessing 20% year-on-year increase, as per data published by RBI yesterday. Growing user and adoption of credit cards can be gauged from strong growth in credit card spends. In October 2023, the industry witnessed the highest ever monthly credit card spends, reaching the value of INR 178,000 crore, with over 23.5% growth year-on-year. As the industry continues to grow, during the past few months, some significant measures have been introduced by the regulators that will be key in shaping the industry's course. Some key measures include increase in risk weight for unsecured lending. This will ensure prudent growth and have a positive impact on good quality customer acquisition. Enhancement in UPI transaction limits for hospitals and educational institutions, as well as increase in limit for recurring payments for specified categories that include mutual fund subscription, insurance premium subscriptions, and pay card agents. Rollout of master direction on internal ombudsman and mechanism in regulated entities to further strengthen the customer protection and fairness. Indian credit card industry continues to hold potential. SBI Card is well equipped to tap into the opportunities arising out of it, and will continue to leverage its extensive network and experience for sustainable and profitable growth. Regarding SBI Card's business overview in quarter three of financial year 2024. In quarter three of financial year 2024, SBI Card continued its growth track with sturdy business performance. Our cards in force have grown 16% year-on-year and are at 1.85 crore as on December 2023. We continue on a steady path of accounts, account sourcing. SBI Card's market share in card in force stands at 18.9%. We added nearly 11 lakh new accounts in quarter three of financial year 2024. We remain focused on continuing the momentum to build a quality portfolio while deprioritizing certain segments. We have seen strong growth in card spends during quarter three of financial year 2024, reaching the highest ever quarterly spends milestone. Overall spends have grown 41% year-on-year to INR 96,860 crore, with strong performance in retail and corporate spends. Our market share in spends stands at 18.3%. Our retail spends have been strong, with 35% year-on-year growth, rising to INR 73,519 crore in the quarter, with increase across all key spend categories. Our spends per card for retail spends have grown to INR 1,62,000 in quarter three of financial year 2024, from INR 1,42,000 in quarter three of financial year 2023. We rolled out around 22,000, 22,200 offers across 2,700 cities in the country to enhance flexibilities of our customers. Reflecting our customer centricity, these offers were introduced across online and offline merchants at national, regional and hyperlocal levels, and catered to our millions of customers countrywide. The increased purchase spends also improved our 30-day spend active rate to 52% in quarter three of financial year 2024, indicating the success of our purchase campaigns through strong engagement with our cardholders. The UPI functionality on RuPay credit cards is fast becoming popular among our customers, with about 25% of all RuPay cardholders already being enrolled for UPI usage. Our monthly average UPI spends per active account has increased to over INR 12,000, with average ticket size being around INR 880. Our receivables have grown to INR 48,850 crore, with a 26% year-on-year growth on account of strong spends. Our receivables per card have grown and are at INR 26,438 in quarter three of financial year 2024, against INR 24,318 in quarter three of financial year 2023. Our share of interest earning receivables is stable at 62% quarter-on-quarter, while increasing from 61% year-on-year. The percentage share of revolvers in the receivables mix has reduced marginally and stands at 23%. However, it has been growing in absolute numbers. The share of term EMI is going strong, has an increase to 38%. EMI volume was also positively impacted, that led to 58% growth in quarter three of financial year 2024 versus quarter three of financial year 2023. Some of our initiatives during the quarter were: We have launched a new co-branded card in partnership with Reliance. This card is available digitally and through all Reliance Retail stores. Another important development has been connecting our Sprint platform with YONO app of SBI. This now enables the YONO customers to get an SBI Card digitally, end-to-end. Further, during the quarter, SBI Card went live on Bharat BillPay under credit card biller category, which adds to the various features that we have provided to our cardholders, delivering them greater convenience and flexibility. Regarding financial performance in quarter three of financial year 2024, our revenue and profits growth remains healthy. Our total revenue in quarter three of financial year 2024 has been at INR 4,742 crore, registering a 30% year-on-year growth. Our revenue from operations was INR 4,622 crore, with 32% year-on-year growth. Interest income has also grown by 29%, contributing 45% share to our overall revenue from operations. The profits after tax for quarter three of financial year 2024 is INR 549 crore, with 8% year-on-year growth. Our cost of fund has increased to 7.6% as against 7.1% of previous quarter. We had indicated last quarter that our cost of funds will be higher. The increase is on account of higher borrowing rates compared to the previous quarter, and is also impacted by RBI's action of increase in risk weight for banks on lending to NBFCs. Our cost of borrowing from banks is higher by about 25-30 basis points after the RBI circular has come into effect. We will see the impact of this increase for the full quarter in quarter four, and therefore, we expect cost of funds to increase further in quarter four. RBI's action on increased risk weight on unsecured lending impacted our capital adequacy ratio, like others in the industry. But after accounting for the RBI's action, our capital adequacy ratio for quarter three, financial year 2024, is at 18.4%. Our profits will continue to add to the improved capital adequacy ratio in future. While we are well capitalized and well above the regulatory guideline of 15% capital adequacy ratio, we have further augmented our Tier 2 capital through our bond issue during this week itself. The yield has increased by 82 basis points year-on-year to 17.2% in quarter three of financial year 2024. I would like to highlight that we have been reporting all our financial metrics on a quarterly average number, and hence, for a festive quarter such as this, where the NEA book is volatile through the quarter, the quarterly average is not the right representation of the metrics. A more accurate presentation of these metrics will be on a monthly average basis, and at that measure, the yield and NIM for the quarter was 16.6% and 11%, respectively. As an annexure to our presentation, we have presented the financial metrics both on quarterly average and monthly averages, and in future, we will provide all metrics on monthly averages. On asset quality, as of quarter three of financial year 2024, our gross NPA is at 2.64%. Our gross credit cost is at 7.5% in quarter three of financial year 2024. As for our conversations with the credit bureau, there is an increase in 30+ DPD and 90+ DPD for credit card across the industry. Industry data also suggests that there is worsening in delinquency, delinquency levels for unsecured exposures. This has been recognized by RBI and has been factored into recent regulatory changes, for example, changes in risk weights and their guidance for increased adherence to their prudential norms and regard to unsecured loans. Since we have 19% market share and are part of the ecosystem, these industry and macroeconomic trends also impact us, as was already stated in our last quarter call. We have taken multiple actions over the last few quarters covering underwriting portfolio, underwriting portfolio and collections to address the stress in certain segments of unsecured advances ecosystem. These actions include, reduction in limits, restrictions on cross-sell, and spend trigger-based early blocking. As a practice, we keep refining our underwriting policies based on portfolio diagnostics and bureau information. Our new sourcing continues to be better for, better based on early delinquency trends. We will continue to fine-tune our policies and process across the customer life cycle. While we have taken the actions and the recent portfolio is displaying better quality, but stress in certain accounts in existing portfolio due to multiple trade lines indicates that the credit cost will remain elevated around the current levels over the next two quarters. However, our intensive collection and recovery measures will continue. Our ROA for quarter three of financial year 2024 is at 4.1% due to increased cost of funds, increased credit costs, and higher fixed expenses. So we expect to maintain a healthy business momentum to continue, owing to positive consumer confidence and healthy traction in discretionary spends, including travel and entertainment. We remain committed to our shareholders, customers, and partners as we continue to create value for our stakeholders through a growing and profitable business. Now, we are open to 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 telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mahrukh Adajania from Nuvama. Please go ahead. Yeah, good evening. So I just wanted to discuss more on credit costs. So basically, it's a general rise in delinquencies in the system. It's no particular cohort. And why would you think this is happening? It's because of seasoning? It's because of inflation? What would... What do you think? Or it's just because of aggressive lending by the sector, you know, which affects all players then? This is Shantanu here. So it's difficult to give an attribution, but what is clear is that what we are experiencing is in line with the rest of the industry as well. And although it is not part of the presentation, because we don't disclose it, because we're not authorized to, there is data from the bureaus that indicates that the stress is widespread throughout the industry in the unsecured asset space. While the overall consumer asset space is somewhat more benign, especially in the secured segment, the unsecured segment isn't doing too well in terms of the delinquency trends, as noted in the 30-day number or the 90-day number, which is measured on a quarterly and half-yearly basis by the bureaus. And the quarter-on-quarter and six months on six months ends indicate there's been a pickup. to the extent of about 80 basis points in the 30-day number and about 40 basis points in the 90-day number, which is an appreciable increase of about 16% in delinquencies at the 30-day mark and the 90-day mark both. This is specifically for the card segment. So, what we're experiencing is in line with the rest of the industry. What might be causing it is more difficult to say, but there's enough and more mention in the widespread media or the general media around macroeconomic factors and other environmental factors that might be causing it, but we don't have a accurate analysis for it. Got it. And so my next question is on margins. So, you've given a monthly average of margins, where margins seem to have declined by 25 bps. What kind of margin decline would you envisage in the fourth quarter then, given that cost of funds would rise even then? I'll take up that question. So So we've already said that we do expect the cost of funds to be higher in quarter four, and also gave you reasons as to why we think that the cost of funds will be higher. Already one month into the quarter, we are seeing the impact of the higher cost of borrowing from the banks. Obviously, our endeavor will be to pass on whatever we can of this increased cost to the customer. So it's difficult to give you a sense on the NIM. We will try and compress, make sure that the compression is as minimal as possible. But at this point in time, the guidance or the note that we can share with you is on the cost of funds. We will try and minimize the compression. Okay. Thank you. Thanks a lot. Thank you. Ladies and gentlemen, we request you to please restrict your questions to two questions per participant. The next question is from the line of Piran Engineer from CLSA. Please go ahead. Yeah, hi. Thanks for taking my question. So, sir, you mentioned about some of the steps you all are taking to improve underwriting, but can you just run us through if you have an NPL account, once he pays his overdues, do you then block the limit? Do you restore it back to the original? What sort of actions are you taking here? And in that light, how should we think of credit costs over the next year? In terms of actions that we are taking, we can give you more color, but the wider projection of credit cost, Abhijit has already answered, in the, in his speech, in terms of what the outlook might be. No, I wanted to know about how we treat an NPL account, to be specific. Can I... Did I understand it correctly? Yeah. No, I mean, like, once an account turns NPL, you are obviously putting in all your collection efforts. Once you collect that, do you block that account? As in, do you remove him as a customer? Do you just give him a reduced credit limit? Do you reinstate the entire credit limit? How does that work? So basically, when an account becomes an NPL and the customer pays all his overdue, so while he gets out of NPL, in order it to be assessed whether we should reinstate the limit, so there is an assessment that happens. There is a policy that we follow, and we don't restore the entire credit limit completely. So we follow a graded approach, and we, you know, it's not that all the customers will get reinstated. We have a specific policy which includes looking at the credit bureau and looking at other factors before reinstating. Can you give a sense of how many such customers you all would have now just stopped, like, fully, cut the credit limit? I'm just trying to get a sense of... Because this is eventually a revolving credit, right? It's not a one-time loan. I want to get a sense of how much of the cleanup, let's say, is done. That's my point. It's blocked. It's blocked, so you see, majority of the cleanup is anyway done once an account reaches NPL. Because, of course, it is hard blocked. And as I just mentioned, there is a reinstatement policy and a process that follows. It is not that we open the limit immediately. Is that is your question? Or is it that...? So of the, you can also estimate it from the other side. Of the overall attrition, because these, these customers, we take them out of our books, of the overall attrition, close to 40%-45% is involuntary, which is where we have taken the customer out of our books. So on an annualized basis, that is, that is where you can assess the numbers from. Okay, okay. That is very useful, actually. And secondly, now, just in terms of, you all have been curtailing new card sourcing, how should we think of spend growth next year at context? I would just supplement it. We are not curtailing. If we were curtailing, we won't have been done - we would not have done 11 bank cards in this quarter. Yeah, but you were doing 15 lakh cards two-three quarters back, so I mean, relatively, it is curtailing. That was Q3, December, and we did run various pilots at that time which we came out of during later stages. So it's not that... I won't say it is curtailing. It is restricting to certain geographies and to certain segments. So we will continue to have a robust business plan. We'll continue to grow. It's not that we are going to curtail. I would supplement that, we have not used the word curtail. We have done certain corrections on certain geographies, certain segments that we have done. And compared to the previous year, certain periods when we were running certain pilots, we have come out of those pilots. Got it. Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi. The first question is on open sourced customer and SBI sourced customer. When we onboard both customers, how many of them or what percentage of them already have a credit card or another trade line? That's the first question. Second is, what was the spend for in the festive season for the 2,200 schemes that we just discussed? What's the absolute dollar value of the spends? These are my two questions. Thanks. On the first part, on the open market, 100% of the customers will have a trade line. We don't do new to credit card or new to card credit customers through open market. On the banca piece, on the NTCC, which is what you were asking, which is new to credit, credit card or new to credit, if you take that, people who do not have a credit line. That number, we, it keeps varying from month to month, but the range is anywhere between, of the banca customers, it will be anywhere between 10%-15%. 10%-15% will have a credit card? Will have a credit line. Will not have a credit line, will not have a credit line. So these will be 10%-15%, and these customers are assessed through their savings bank account data, through which we are able to see their cash flows of the customer, and there are models which are run to be able to assess these guys. Understood. The relative mix between open market and banca is about 50/50. Got it. And the second one? On the second one, which is the festival season spending, we have given you the retail spends of the for the quarter. The retail spend is close to almost around INR 76,000 crore for the quarter. This, because this time the festival season started from first of October itself, and typically it ends up ended with fourteenth November, which was Diwali. We saw October spending at the peak, and then November and December was slightly lower than October. But month by, they are already available on the RBI website. You can see [crosstalk] No, I am asking about the OpEx. I'm not asking about the spends. What is the OpEx that, that's there, the cost? We don't disclose that. We don't disclose the line item around the expense that we incurred for the festive campaign, Shubhranshu. Oh, okay. Sure. That was my question, not around the spends. Sure, I'll come back and with you. Thanks. Thank you. The next question is from the line of Shweta Daptardar from Elara Capital. Please go ahead. Thank you, sir, for the opportunity. Two questions. So can we attribute NIM compression also because of continued increase in corporate spends? And question number two, so you did guide on elevated credit cost sustaining for next two quarters. So do you believe, so I'm referring to gross credit cost. So do you believe there is further spike in this number going forward? If you can give a range. Thank you. So, on your question, is the NIM compression happening because of corporate spends? The answer is no, because the corporate spends do not really add too much of the NUA. So they neither give you any interest, nor do they, you know, have a cost of funds impact as well. Understood. So regarding the credit cost part, yes, we have given a guidance. So, and we are anticipating that around, it will prevail around the elevated levels and I think around the current levels. So, and how do we do it? Somewhere we have done our portfolio analysis. We have seen how the stress is building up in specific accounts, how they are behaving, their behavior in, through the bureau. So all taken together, we have seen there are possibility of certain accounts which will add, which will continue to remain delinquent, and based on expectation, we are anticipating it around the current level. That's how we are looking at it. Sure. That helps. I'll join back to queue. Thank you. The next question is from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead. Yeah. Hi, thanks for the opportunity, sir. Two questions for you. One is on the delinquency side. If you can share some color as to how you compare the delinquency between the EMI and the revolver mix. And then we have incurred a 7.5% credit cost while the revolve mix is going down. How do you really see this trend? Because if you look back, generally, an increase in revolve is something to be correlated with the increase in credit costs, maybe on a lag basis. But here, the revolve rate has been sticky for so long. In fact, it has gone down a bit this quarter, but still, credit costs are inching up. So how do you see this disconnected trend? So these two questions. So the first part of your question is about the relative quality of the revolver base versus the EMI base. So the EMI base is indeed lower yield and also lower risk, as is intuitive and as I think we've spoken about earlier as well. The other part of your question is around why is the credit cost going up and revolver is coming down? One part of the answer is that it's not really established in terms of empirical proof to what extent they are correlated, so we can't really attribute movements in one direction versus movements in the other direction in an empirical sort of way. But yes, it is somewhat anomalous, but the answer lies in the changes in the credit quality as evidenced in our flow rate. That is part of the reason why we're projecting the elevated credit cost over the next few quarters. Okay. And, one more if I may, is, like, on the capital side. Because of the risk weight impact, the capital levels have come down, so any plans to support or beef up the capital ratios over the quarters, coming quarters? We are actually very comfortably placed on the Tier 1 capital. There we can augment our overall through Tier 1i issuances. We've done one bond issue this week itself, and we'll continue to explore to do more. Okay, sure. Thank you so much. Thank you. The next question is from the line of Amey from Tata Mutual Fund. Please go ahead. Hello? Yes, Amey? Yeah, yeah. Hi, ma'am. Hi, Rashmi Mohanty. Just one question. On the credit cost, is it possible to bifurcate between standard asset provision and LNP? Sorry, say that again? Standard assets and, Yeah, how much was the standard asset provision for the quarter, and how much was the loan loss provision for the quarter? The breakup that we give you is in terms of write-offs and provisions only. Out of the increase of INR 140-odd crores in the credit cost, there's a breakup between the increase in provisions and delta in write-offs as well. That's evident in the presentation deck as well. INR 100 crores and INR 40 crores is the breakup. Okay. And that is, so because your loan balances also have gone up, so logically, your standard asset provision also would have been quite high this quarter? Yeah. So in the deck, if you notice, perhaps you not have time to see it, that disclosure is made in the deck on the right-hand side of the deck. Okay, okay. I will check that out. Not a problem. Okay. And just on the margin side, so once this fourth quarter increase in funding cost is done, logically next year onwards, should we see at least stable margins from that point on? I have. I hope I had a glass where I could foresee where the rates are. But assuming the rates stay as it is? I would say that even if you see a bit of an increase in the cost of funds in quarter one of next financial year, it will be very, very marginal, post which we should definitely see a stable scenario on the cost of funds. Okay, got it. Got it. Thanks. That's it from my side. Thank you. We have the next question from the line of Roshan Chhutani from ICICI Prudential Mutual Fund. Please go ahead. Thanks for taking question. Just want to understand if there is any color in terms of vintage curves, which vintage is hurting us, or is it job based? Any further dissection to this gross credit costs by some cohorts, which is, it is useful to learn from, you know. So, we continue on the same lines which we stated in the previous call also, that as of now, there are no cohorts. We see it right across the portfolio. Specifically, we look at what is happening in their bureau behavior. So what is the common thread is that wherever there is a multiple trade line, there is the delinquent, all the delinquencies what we are seeing and the probabilities, there's a common thread in terms of having multiple trade lines. Sure. To supplement on that, while we can't call out any particular cohort in the manner that we did two or three quarters ago, we do continue to monitor our portfolio through various vectors, like, vintages, like geographies, like city tiers, like self-employed versus salaried, like age, like category of employers, et cetera. And, and we do both univariate as well as multivariate analysis of our portfolio. And wherever that shows up areas of stress, appropriate portfolio actions are taken. Sure. One another question here. Basically, how should I get a comfort that we are close to the end? What is it clear for one to believe that we're at the bottom of the cycle here? How do we get a comfort that we're at the bottom of the cycle? Well, it's difficult to say that, and that's also evident and, subsumed in the answer we gave around the, projection for credit costs. We can't call the top or the bottom. Understood. Any leading indicators here? I mean, anything that you are doing from your end, sourcing, portfolio actions, which will help us get better outcomes later? Yeah, we take action through the lifecycle of the customers, starting from the underwriting stage, right through portfolio management, including our marketing efforts, cross-sell efforts. So all of those are informed by the insights that our portfolio insight team comes up with and also offers an honest view of performance data as well. Thank you. That's all from my side. Thank you so much. Thank you. The next question is from the line of Anuj Singla from Bank of America. Please go ahead. Yeah, thank you for the opportunity. The first question is with regards to credit cost. I, I think you mentioned it's going to remain elevated for the next two quarters or was it few quarters? Do we have the visibility that it can normalize towards the end of next year? Yeah, I think, so, everything will depend how the ecosystem improves based on the corrective actions taken by RBI. So somewhere, what we are looking at is our own portfolio that has been impacted by multiple trade lines, where there is a delay in payment by certain accounts. There is a delay cum inability of the payment because of multiple trade lines. So once we have seen it, we are looking at it for the next two quarters. It will unfold. It's very difficult to say that how it will come out after two quarters or so, but then what we can see as of now, we have shared. Okay. And the second question, sir, I think we had articulated a target or the sustainable credit cost guidance of 5.8%-6.2%. Will it be fair to assume that likely to be too conservative in the current scenario, and this could be a new normal, where the credit cost could remain high for an elongated period of time versus that guidance? Sir, last quarter also, we had stated that if anybody asks me for an aspiration, I will still say my aspiration will be around 6%. Why should I not aspire to be that? But then, if in spite of our best of our models and best of our sourcing, if there is a multiple borrowing subsequently and inability to pay, compounded with various factors impacting the borrowers, this has a... This will continue in the short run. But left to me, I would definitely aspire to be at 6%, but as I said, we for next two quarters, at least in the near term, we don't see it happening. Got it. Got it. And lastly, on the UPI credit card customers, where the linking has happened, you have shared some good insights there. Is it possible to share something on the asset mix as well? Is the asset mix as similar to what we have on the company level, or is it, you know, very differentiated there? Thank you. So, too early for asset mix behavior. If you see, the numbers have actually grown rapidly. It's more than 3x what we were at the end of September quarter. We will, in next couple of quarters, as we see the assets coming across, we will give, start giving that information out also, but as of now, it is too early for that. Okay. Okay. Got it. Thank you. Thank you. The next question is from the line of Rahul Jha, from Bay Capital. Please go ahead. Hello. Yeah, my question is regarding credit cost. So at the end of Q1 call, you had given a guidance that the H2 credit cost will be around 6%, but we have already breached that at 7.5%. So what has changed in the last two quarters that we have breached it with such a large margin? So, somewhere, somewhere we need to see what has made RBI take these drastic actions too suddenly. When nobody was expecting, RBI came out with their guidelines in November. And even before RBI came out with guidelines, I will again refer to my own earnings call on 27th of October, where we shared that we are seeing a stress, overall stress in the ecosystem, and that is impacting us. Very clearly, we had stated that. So somewhere, somewhere, the stress was building up and it started impacting. So as I said, the aspirations will remain, and we will continue to work towards that, but unless there is an improvement in the ecosystem and there is a higher ability to repay back to the multiple trade lines, this will continue for a short run. How often do we check the, scrub the CIBIL database? Like, how do we know whether you have a multiple trade lines, post in defaulting or before in defaulting? How often do we do that? Those are calibrated fashion, depending on the nature of the customer. It can be as frequent as once a month. Okay, thank you. So, I will just supplement that, I think, the industry is aware about the services that are provided by the bureau, so, we avail them. Thank you. The next question is from the line of Anand Laddha from HDFC Mutual Fund. Please go ahead. Hi, I just wanted to understand, so like, is it possible for us to categorize customer based on the behavior pattern or based on the multiple and they are running? How many customer of ours could be such that would who have multiple lines running for them and who could have seen delayed payment, so that at least we can categorize that this is a pool size which is seeing some stress, and probably can, action can be taken against that pool size. First, thing that, second, what I understand that bulk of the customer we acquired have a CIBIL score of 725, 750, and above. Despite that CIBIL score, we are seeing such a large delinquencies. Great! So the day he comes for a credit card, he must be at around 730, 750. He merrily goes, creates the credit history, then borrows more, and one fine day, he is at 600. So when the credit decision was taken, it was fine with good repayment capability, but then over a period of time, using the same good credit score, the fellow builds up a liability which he's unable to sustain and service. Perfect. This is what we have observed, this is what we have observed when we went through the portfolio. Perfect. So, so is there anything we can do on that before that? So before the customer turns 769 score, is there anything we can? No, just are there any lead indicators that we know that the client has taken multiple line of credit, what action we can take? Right. So, in our call itself, we have stated that what we have started doing. When one is that, some of them have, will definitely flow, and that's where our estimates of credit costs come. Now, those, we have identified early, we pull the plug on the limits. And, we have been able to take action on almost 300,000 accounts, where we have taken action on the limits or wherever we have been able to cap, we have capped the limits at a lower level so that we are, we are able to cut costs, cut, cut the losses. So, and this is a perpetual process. This is a daily and perpetual process which is happening for last five to six months. Okay. In which cohorts have we seen the maximum delinquency? Is it the salaried, self-employed? Is it the government employee category? Can be any color you can use? Ah! That's where we have been repeatedly saying that this is a malady which is spread across the portfolio. We see one here, we see two there, it's like that. Okay. And there is no differentiation in the portfolio which is outsourced outside from SBI and from open market? Is there any stark difference between the two portfolio quality? So I think I answered this question a little while ago. We analyze our portfolio in multiple ways, across channels, across segments, across the tiers. And wherever we notice in pockets of stress, we do take action. But it's difficult to color any one segment or channel with a broad brush. Okay. And sir, last from my side, sir. Today, credit card in general is a high risk category, and we used to earn high yield on the revolve. Now, bulk of the customer has moved to EMI, whereas credit risk and the default risk remains the same. So is there any way that you can increase the interest rates on the EMI customers so that at least it gets compensated? So on the, in installment lending products, the rates have, if you notice, rates have increased over the last one, one and a half years. They have gone up from almost 150 basis points to 250 basis points in certain categories. There is a, limit to which we can take it up, but wherever we get an opportunity, and you are right, if the, risk weight increases, or of the EMI customers or as the cost of funds goes up, we get those opportunities to increase the rates, and we have been increasing the rates, in the past. If we see that continuing, for example, as, Rashmi was mentioning, if there is a cost of funds increase that we will see in our portfolio, we will try to pass that on to our customers. Perfect. And the last, do you believe that the credit card addition for the industry will slow down, and even it will slow down for us also? Sir, we don't have any reason today to believe that. As I speak, as we speak, about 100 of my fellows or 1,000 of our fellows will be out in the market sourcing some card or two at this moment. Perfect. Thank you. That's from my side. Thank you. Ladies and gentlemen, we request you to please restrict your questions to one question per participant. We have the next question from the line of MB Mahesh from Kotak Securities. Please go ahead. So this question on this spend growth translating into loan growth. Any reason why this quarter has been, we've seen, much lower loan growth as compared to spend, despite one month of festival season not being there in December? Can you just repeat that, Mahesh? It is not clear. Yes, spend growth has been about 40%. If you look at the loan growth or the receivables growth, it's been about mid-20. Correct. In the past, usually you should see it in the month after the spends have been completed. Yeah. This time, December was a bit slow. So just trying to understand why has been the loan growth translation a bit weak? Well, same happened. Yeah. So, you have to first look at, rather than year-on-year, look at it from a quarter-to-quarter movement perspective. So from the last quarter, the spend increase is almost close to 20% or so on a quarter-to-quarter basis. Just the retail spend I'm talking about, because corporate spend does not lead to asset. That increase we saw in most categories in the month of October itself, because the most of the spending happened in the October, in the month of October, and that was the peak. After that, November was like, was lesser than October, and December was almost at a similar level compared to November. What has also happened is when you look at the asset build up, is that a large part, not only the revolve asset, has increased in absolute terms. Because, if the asset has increased by close to around, as you were saying, around eight, 10, nine, nine, 10%, then revolve asset has also increased broadly at the same rate. It is that the new sale of installment lending has actually increased by a far much larger level. It is because there is a paydown which happens on installment lending, so it is always on a treadmill kind of scenario, but the new sale has actually increased dramatically. This time, we saw installment lending, a large amount of new spends converting into installment lending. Usually, the number used to vary at around close to 9.5%-10% of the spends, but this quarter, we have seen this number go up to almost 11% of the spends. So, and most of it is, as you are aware, it happens digitally. Customers do it on their own, on our mobile app itself. So, actually, the asset build-up this quarter has been fairly strong. And also, not only the transactor asset, because it remains stable, it is the installment and revolve asset, both have got built up. Okay. Okay. Now, because the retail spend growth was at 20, but if you look at the overall loan growth, it's about 8% QOQ. So you're saying it's largely explained by the EMI product? Yeah, absolutely. Absolutely. Absolutely. Okay, sorry. Just one question on the QR codes now, QR codes and the RuPay ecosystem. In your discussion with NPCI, how is seeing the market opening up at the merchant level on the, on the EMI, or sorry, on the credit card on RuPay product? As of now, what we have seen is that the transaction data is fairly strong. You can already see that the ticket size is around INR 880 or so for this for the quarter, and average spend is around INR 12,000. So every customer is making the transacting customer is making almost close to 14-15 transactions on a monthly basis, and that becomes a fairly common routine. 15 transactions, UPI transactions, per transacting customers, they're using it at almost every merchant that they can find. Not many complaints we have got. There are few merchants who do not allow specifically credit card transactions to still go through. But most of these merchants are more organized merchants, where you're otherwise also, credit card payment was also allowed, and they're just trying to save some, something on the MDR. Smaller merchants, local shops, we have not seen that kind of trend lately. Overall, you're saying that the merchant acceptance level has not been too painful? Yes, yes. There are some merchants, so if you will see some, for example, and these are some organized online merchants, certain merchants which manage utility bills for residential colonies. Some of those merchants would not - they would charge or surcharge or do something when you are paying through credit card, and you allow only UPI transactions and not through credit cards. But the primary purpose of this was to get the smaller departmental stores, tea stalls, barber shops, those are all accepting the card and through this UPI transaction. Okay. Thank you. Thank you. Thank you. The next question is from the line of Kaitav Shah from Anand Rathi. Please go ahead. Thank you. So just one question, that's regarding more about the growth on advances next year. Given that what has been happening, A, on the risk weight side, B, a general increase in credit cost at your end, do you think we are going to tighten how we are going to give out credit card next, for next year? Any sort of thoughts around there? As of now, for the next two quarters, Abhijit has already talked about, we would continue to run at this rate for the new customer acquisition at least for two quarters. If things start to improve from there, we will enhance our run rate to, in the next going into next year. Let's see the conditions for next two quarters. Hopefully, by Q2 of next financial year, we should be able to get the new customer acquisition rate at slightly higher rate. The spends is going very strong, and the reason why we say this is that it's not only in this season, you've already seen existing customer is spending higher. So when the existing customer starts to spend more, through more categories, through more options, and this RuPay, UPI thing is still spreading, we've started to scratch the surface as of now. We believe that the more spends will definitely come. Regarding the assets, that's a second degree buildup on this one. I, we foresee that the installment lending is going to be fairly strong. Revolve to a degree is also, dependent on the kind of measures that we take on the, underwriting space, on the portfolio management space. As we stated last time, that if it remains stable at this 24% ±1%, we, we would be very happy. So that is the way that we look at it in the going mix. Right. Okay. Okay, thank you, sir. And all the best for the next quarter. Thank you. The next question is from the line of Anand Dama, from Emkay Global. Please go ahead. Sir, thank you for the opportunity. Sir, is it possible for you to share the breakup between the PLC, personal loan on credit card and the EMI portfolio? We have not declared that earlier, so would not be able to do it at this stage. Okay. In terms of the asset quality or the, you know, NPA formation that we have seen in the recent past, any breakup that you can share or any thoughts, like, in terms of whether we are seeing more delinquencies coming from the EMI pool or it's mainly the revolver customer who is delinquent? Unfortunately, we don't give that level of disclosure. Yeah, but, I mean, if you, if you can just give some qualitative, you know, view on that. EMI is better than revolver. That I already mentioned. The relative to the revolver base, the EMI, EMI assets are better in terms of asset quality. So they're much lower in terms of the credit cost as well. Sir, you know, basically one disclosure that you can start adding for your presentation is about the PAR book. You know, so basically a lot of NBFCs, you know, banks, they tend to give out their, you know, data as well to the presentation, that will be really helpful. Okay. Thank you so much. We'll think about it. Thank you. The next question from the line of Rohan Mandora from Equirus Securities. Please go ahead. Sir, thanks for the opportunity. Sir, in one of the earlier participants' question, you had explained that, when we are onboarding customers, we are at around 720 CIBIL, and then subsequently fall to 600. So I just want to understand, sir, is it possible or are we doing something to assess the income of the customer when we are onboarding and the kind of profile? Because, one of the credit card journey that I had with SBI Card, it just took the name of the company where I work and the designation, but no subsequent documents were collected. So is there something where we can, which I may not be aware of, and you may be doing it, to assess the income profile and the quality of income to avoid these kind of scenarios? Just wanted your thoughts on this. And second, if you look at the Stage 2 that we disclose, it is not increasing despite the jump on delinquencies that we are seeing. So why it's sort of flattish year-on-year, year-on-year? Thanks. Yeah, I'll answer the first part. Please rest assured that we do arrive at the income assessment. There are ways of doing it in the market, and we also do it, and we do it to very fair accuracy. So, income assessment is one of the most important pillars of the card assessment. So, that is definitely done. The second part, I miss. I didn't get the second part. What is it that you're asking about? The Stage 2, it's not increasing in the disclosures that you give quarterly. So despite the delinquencies that we are seeing and the guidance of higher delinquencies for the next two quarters, so why is it still at 6%? Is the relative mix you're talking about of Stage 1, 2, and 3 receivables? Yes, yes, the Stage 2 receivables. Yeah, so there's a bit of a rounding error here as well, because, we don't publish beyond, you know, the round numbers, so the decimals aren't visible. But you can see the pickup in receivables and the mix has remains largely the same at a, at a whole number level, but there is, there are, minor movements in decimal numbers. But this Stage 2 assets. Stage 2, yeah. Got that. Thank you. The next question is from the line of Krishnan ASV from HDFC Securities. Please go ahead. Yeah, I hope I'm audible. Thank you for taking this. I was just wondering, one, about all the behavioral issues that you mentioned with multi-carded customers. And my query was regarding if supposing you carded me, if you carded me, Krishnan, as a multi-card customer in your, in open market channel, and if you have noticed some behavior already in the December quarter, why wouldn't you be able to switch off a Krishnan outstanding? Why would you need two more quarters to see this change? Right? I'm saying with all the algorithms and the science that we do, why would you find it difficult to dial down on customers where you have already identified that this is... or, you know, across pools, across, you know, bivariate, multivariate, every cohort way that you can analyze, if you know that there are pools that are likely to give a problem, why wouldn't you be able to dial down or switch off those? That's number one. Number two, on the, I mean, borrowing side, I mean, you're, you are, I mean, bank-heavy now. Is there... I mean, is there any thought process around wanting to diversify that a little bit better? Yeah, those two. Thanks. So the first part. First of all, it is not multi-carded, it is multi-trade lines at times. And as I said, that at the time of, let's say, for open market, at the time of onboarding, there is a possibility of a trade line. It can be carded or it can be any other trade line. Now, having noticed Krishnan behavior through the bureau and the spends in December, as I said, I do block the limits wherever possible. So if Mr. Krishnan is having a limit of INR 5 lakh, and I find him on outstanding is at INR 3 lakh, I will cap it at INR 3 lakh and thereafter, I will watch and continue to cap it. But then what happens? The moment if Mr. Krishnan does not want to pay. He will not reduce his outstandings below INR 3 lakh. So this INR 3 lakh is over, going to flow ultimately to NPA and to write-off stage over 180 days. But wouldn't that already be a part of your, wouldn't that already be a part of what you have recognized during the December quarter? Because you've been saying this in, I mean, as you mentioned, on the twenty-seventh of October also, you called this out even before the RBI did anything about this. Yes. So, yes, we did, we did notice, but then, as I said, Mr. Krishnan could have been one of the indicators when I started working in August, but he was fine. Suddenly, his behavior started deteriorating in December. Okay, understood. So it's not that, it's not that we have cut a line where all the good borrowers have remained good after August, and they have not deteriorated. It's a perpetual process of identification through the bureau monitoring and the trend behavior that we are perpetually observing. So sitting and that exactly answer your question. If we are looking, sitting in December, we can only look at the behavior up to December and predict up to next two quarters. This explains everything. Understood. This should be other one around, I mean, bank borrowings versus, you know, how you could diversify. So that's something which we keep doing. We have, it's not that we've just been borrowing from the banks. Even in this financial year, we have done a couple of bond borrowings, opportunistically borrowing from the capital markets wherever we got the rates right, and we will continue to look at that. Understood. I just have one last question, which is related to the first one. Is there any merit in relooking at your expected credit loss terms, given what you're experiencing, kind of, behavioral thing? And this is not just for you. I'm assuming SBI Cards is not unique in this. It's something which is probably prevalent in the entire credit card industry right now. Is there a reason... But you being the monoline player, is there a reason for you to relook at your ECL working? Yeah, so our ECL model, like all other Tier 1 models, requires an external validation on an annual basis and also quarterly refresh of all the data. It's also subject to close scrutiny by the regulators as well, and they have looked at it in their most recent visits. Even our board and our ACB look at it, our model, and validate it and look at the validation reports of the external validation consultant. So we follow market best practice in this area, and we, we'll, we continue to refresh our model on the specified frequencies. Okay. Helpful. Thank you. Thanks. Thank you. Ladies and gentlemen, we will take that as our last question. I would now like to hand the conference over to Mr. Abhijit Chakravorty for closing comments. Over to you, sir. Thank you, all of you, for joining and looking at us quite closely. I share my gratitude towards our shareholders, investors, business partners for their continued trust and support and believing in the strength of SBI Card. Thank you. Thank you. On behalf of SBI Cards and Payment Services Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.