Good evening, friends. When we spoke last in May after our annual results for the year ended March, we discussed broadly, and it was the time when we were in a view, with a view, all of us, be it the analyst community, investor community, and ourselves, that we are moving to a new normal world. When I speak to you in July, the speed of change in the way the virus is going, the way economy is going, is making me modify the statement to say that we are now in a never normal world. A constantly changing world at great speed, requiring elasticity and speed of change on all the players in the economy, including the financial sector. In May, we had envisaged that COVID would get to some sort of a clarity by July, August.
As we stand today in July, this is now looking clearly longer than what was envisaged when we looked at it in April and May. For a moment, we saw a surge of activity in the month of June, giving hope and optimism that we are getting to some new equilibrium in a reasonably quick manner. However, the early data which is coming out for July is showing some sort of a flattening vis-à-vis June, rather than a continuing acceleration. The big question in our mind is whether June was a sign of a pent-up demand, showing the surge, and whether July is now getting to us to a more real world as we see it today. Our current view is we hope to see COVID in the Indian context stabilize in the October-November period, which is effectively the next quarter on a national basis.
Different parts of the country are at different phases of how the virus is moving. Some encouraging signs, particularly from metros, namely Bombay and Delhi, while some other parts of the country are still seeing it move forward. Therefore, if the virus stabilizes in the period October, November, this is the country as a whole, our view is that the economy will get back to 2019/20 run rate by the second quarter, 2021, 2021/22, which is exactly around a year from now. So we get back to a run rate of 2019/20 in about a year's time, and gradually move from the current levels of the economy towards a 100% level in about a year's time. That is the broad view which we, at this point in time, have.
We hope that this moves faster, but still, we will see how it goes. For the last quarter of this year, which is January to March, we are hoping to see economic activity on a year-on-year basis at a run rate of 90% plus. Let us see how it plays out. So with this broad perspective on how we see, the virus and the economy play out, it is quite important to keep in mind that currently we are in the hands of science and trying to find economic answers and financial solutions to essentially a problem of science. We are also hoping that in the next 9 to 12 months, we'll have greater clarity on the science itself in terms of the cure and the vaccine.
Moving beyond from the broader, COVID-related issues and its impact on the economy, I would now really like to focus with reference to product, because we are discussing the results of product in the backdrop of this context. Here I would first like to say the fundamental philosophy that deeply committed to: the balance sheet is more important than short-term profit and loss account. Therefore, in that context, I would first like to start with the subject, which is a subject matter of intense debate, which is moratorium. If you look at our data for the moratorium for the second from June onwards, our moratorium 2.0 is for about 9.65% of the total loan book. This is significantly lower than the earlier moratorium 1.0.
If you look at our moratorium, we have used a very surgical criteria for taking decisions on moratorium 2.0. We have been focused on trying to assess the fundamental viability of the borrower to the extent we can, and wherever we have reasonable belief that the underlying viability is okay, we are happy to give more time in moratorium so that our business can recoup and come back to some sort of normalcy in time.
But where we have had questions on viability of the underlying business, and without any doubt, we have taken a bold, bolder call and said, "Let's just flow through rather than give moratorium," which effectively is kicking the can, underlying viability into question, and we would rather take that pain of, not having it in the moratorium and therefore not recognizing the underlying weakness in the account, and we would much rather recognize it earlier rather than later. And that's what we have done effective June. As a result of this, some of the accounts have flown into NPA, and we are ready to take it on the chin. And therefore, our moratorium approach is there has to be a belief of viability, and we also prefer normally to give moratorium where we have some sort of a security rather than being completely unsecured.
The breakup of our moratorium, as you see, is in moratorium two. It's up to 9.60%. Eighty percent or more is actually having security of some sort in form. And the more unsecured part of the moratorium is relatively a small percentage. And I would like to share that this is a broad design which we have gone with. And of course, we have kept in mind the sensitivity of the chain of the real economy and the different stress sectors, and appropriately considered the decision on moratorium. We are also waiting for an opportune time, when we believe we can take a call, which is different, which is stepping on the accelerator.
If you look at our approach to the SME scheme, which the government has given a guarantee, while as of end of June, we were only INR 550 crores disbursed. As of twenty-third July, we have crossed INR 4,000 crores. You see, against INR 550 crores on thirty-first of June, we have done an incremental disbursement between first of July and twenty-third of July of INR 3,500 crores additionally. So we are ready to take the calls where we have conviction that this is truly appropriate from a risk-return matrix. Another very important part about our PNL, if you go behind it, is a significant point, that despite actual negative loan and credit portfolio growth, our average NII growth YOY is 18%, which means for a relatively lower risk, we have got an 18% growth in interest coming.
And therefore, effectively represents a better quality of earning at lower risk to our shareholders. This approach is consistent with our core philosophy, which we always stood by, which is, for the risk we take, we must make appropriate returns. One of the other big questions, which is on the minds of people, is who is right? Are the economy signals which we are getting right or the market signals which are getting right? I think at times it's a little bit about perspective. Markets may be taking a more longer term view, especially with excess liquidity and very low cost of money. And therefore, our approach, as we look at a financial services house, is to move a very significant part of our strategy and growth into what I would call as distribution businesses versus disproportionate segment businesses.
And therefore, markets versus balance sheet business, we will lean more on the distribution and market side versus taking disproportionate risk only on the balance sheet. That does not mean we are shy of taking on the balance sheet, if we believe the risk-adjusted returns work out. The other important issue, which I mentioned at the beginning, is our approach is medium-term PNL and balance sheets. Balance sheets all the time and PNL medium-term, and therefore we have not succumbed to the temptation of booking bond profits in a hurry in the quarter ending June, and I would like to share that we sit on significant mark-to-market gains on our bond portfolios, and we were not in a hurry to rush to book some of those profits, because our quarterly results look better when we come out.
And this is, again, a part of core philosophy, that if we believe there is value, and we will decide on monetizing the value when we think it is fairly priced rather than rushing, because that makes our quarter look better. With these broad philosophies, in terms of our strategy and working through this important period in history, where I think we are getting a significant challenge to build a new India in a changing, never normal world, we are at it and reasonably confident and comfortable that we can navigate this ship and come out stronger at the other end. And now I request my colleague, Jaimin Bhatt, to take you through the financials.
After we have got our management team in different segments of our business, share with you what is really happening within the context of what's happening on the ground in general. Over to Jaimin Bhatt.
Thanks, Uday. Let me take the key standalone numbers first. If you take this quarter, the pre-provisioning operating profit, we closed the quarter at the profit of INR 2,664 crore, which is roughly about 9.5% higher than the same period last year. Post-tax, we closed at INR 1,244 crore, which is as compared to what we had, INR 1,360 crore last year. So we saw that dip, and I'll come to the reasons there. Our net interest income, as Uday mentioned, has grown on a year-on-year basis by close to 18%. That despite the fact that our advances have been relatively flat. Our advances overall for the year also getting to a lower number than what we were a year ago.
Our credit substitutes, including that we have actually remained, advances of credit substitutes will remain flat over the same period last year. So we end with advances for credit substitutes of about INR two lakh seventeen thousand crores, which is about the same number that we had last year. Our average advances have grown by about 1.5% year-on-year. We've seen significant increase in investment activity and which is where we deploy the money on a safety basis. If you look at our liquidity coverage ratio on an average for this quarter, we ended with an LCR of 150% plus on a daily average basis. We end this quarter with a net interest margin of 4.4%. Our other income comprising fees and services and treasury related.
Our fees and services saw a one-third dip over the same period last year, so our number this year is one third lower than what we had last year. But if I look at the distribution for the fees and services, we actually did 10 to 6% higher than what we did the same period last year. So areas like insurance distribution were running fine, and we actually grew from where we were in the same period last year. But a lot of the other banking related fees, which would include processing fees, LCDGs, exchange transactions on time, direct banking fees, all of that has seen a big dip for this quarter, with lower activity levels, lower volume levels, and that's gone lower by about almost 30% on a year-on-year basis.
Our overall fees is about one third lower than the same period last year. Our other than fees income, which is part of the component of other income, has a net number, which is a negative INR 2 crore for this quarter. If I compare that with a year ago, we were INR 155 crore, and the previous quarter we were INR 219 crore. Coming largely from the fact that we have not really gone and chosen to book profits, as we continue to earn interest, which is coming as part of the NII. Let's talk about the MTM profits which we are sitting on. As of June thirtieth, our fixed income MTM is close to almost INR 63,000 crore.
And if I look at just the delta for this quarter, we have grown the delta MTM by over 1000 crores from the numbers we had in March. That's a number which we have chosen to retain the MTM gains, not book as accounting profits. Our employee costs for this period went down by 6%, and they're also helped by the fact that the leadership levels and senior management have taken a cut in the salaries. Our overall office levels, non-employees, we had a negative growth of 18% and 29% on a year-on-year and a quarter-on-quarter basis. And we've seen a significant focus on cost controls, efficiency, and productivity. And we've seen volumes coming down, which has also resulted in some of the cost levels coming down.
So, therefore, in this quarter, with our cost-to-income ratio now at 81.7%. At the operating profit level, as I said, we are about 9.4% higher than the same period last year and about 5% higher than the immediately preceding quarter. On the provision front, we have taken a provision hit of 962 crores for the current quarter, which is comparing with 317 crores for the same period last year. The 962 crores this quarter includes provision on account of COVID, which is a net number of 616 crores.
This, in addition to the 650, which we provided in quarter four, takes the overall credit cost, credit provision on account of COVID to 1,266 crores, which is about 0.60% of our overall advances. Our credit cost on this basis, therefore, is for this quarter at 1.90%, but which includes 121 basis points of COVID costs alone. To tie together, I'd request Shanti to take the deposit and the side, and then take it from there, please.
Thank you, Jaimin.
She heads our consumer bank and is responsible for that area of business.
Thank you, Jaimin. I will start with the liability side. On an average, around 94-95% of the branches remained open right through the quarter. We adopted a hybrid strategy of rostering service staff in branches and work from home to handle branch and other customer transactions. I would like to thank our staff for the exemplary work they have done in this quarter in servicing customers despite risks of COVID. We continue to see strong growth in deposits. Average savings deposit growth year-on-year was 54%, and average current account growth was 10%. This growth was driven by both acquisitions, but a significant deepening of our existing customer base. Our current ratio was at 66.7% as of June thirtieth, 2020, versus 50.7% last year.
We have seen significant growth across all our retail customer segments, and to the extent that we can keep growing across both urban and rural markets. CASA and TD below five crores comprised 19% of deposits versus 20% last year. Savings deposits of 33.2% of the deposits and the cost of savings accounts is at 4.22% versus 5.51% last year. Average savings balances crossed the one lakh milestone mark in this quarter. We are focused on zero-contact acquisitions by using our exclusive 811 platform to acquire new customers.
We were the first bank to launch zero-contact video KYC digital savings account, that new customers could open full savings account in implemented technology solutions which allowed a significant part of our contact center operations to shift to work from home mode, enabling us to serve our customers for the requirements as well as continue active engagement with our customers. Our distribution teams have showed reasonable growth this quarter, which we are mainly enabling through the analytics and extension of our CRM platform to cover all relationship teams. A large part of our relationship managers are in work from home basis and are very effective in services as well as cross-selling options. In-branch transactions were lower in April and May, but are significantly up in June and July.
To foster availability of cash, we launched ATMs on wheels across major cities, which helped cover existing customers and onboard many new customers. In COVID times, digital has been a big leap, and we enabled several technology solutions across products and processes, which helps customers transact for products on a do-it-yourself basis with a few clicks and get service answers through our voice and chat. I'll now come to the asset side. The mortgages business continued to be a focus area, including in Q1. Non-metro showed better traction due to relatively less impact of COVID. Pre-COVID transactions are getting executed now, and given attractive rates, we are seeing many of our customers showing interest to switch. Fresh home purchases continue to be muted. This will continue to be a focus area for growth. In the MSME segment, we are actually seeing improvement in our collections.
The capital utilization has come down in line with activity, and this is across cities, industry, states, and customers. We are focused on disbursing MSME loans to the segment, which has helped provide liquidity to the segment of customers. However, many customers who are eligible are still not availing of MSME loans, as they want to restrict their leverage to get that comfort from the bank. So, disbursement of MSME loan and given COVID times, we developed a completely end-to-end paperless digital documentation on eSign, which helps disbursements without any physical interaction. We have seen traction in acquiring good quality customers from June, and during this quarter we focused on fee income from the MSME segment. We continued lending to customers during this period through a combination of MSME loan and additional limits based on business requirements. We will continue to focus on the quality of the book in the MSME segment.
This quarter, we launched an 811 credit card designed for our 811 customers with an end-to-end digital experience for card application and production. This is a secured card which allows us to tap into untouched segments, like young students, entrepreneurs, housewives, senior citizens. On the lines of 811, everyone is invited to this product. We continue to be cautious in our approach to unsecured loans, use extensive risk analytics to target improvements in the number of risks in the team. We will continue to do business on quality and with a tighter credit framework. I would now like to touch upon collections. Resolutions were impacted in April and May due to COVID. In July, we have seen improvement in resolution, including in cities like Mumbai, Delhi and Chennai, where impact is higher.
We have focused to ensure robust collections across retail assets by way of the following steps. We have strengthened the collection team by moving key leadership from sales team to collection. This is in addition to extensive agency tie-ups. We've used risk analytics extensively to support our allocation and collection strategy. We have enabled many digital solutions to help those who are working from home to collect and enable customers to pay. We have enabled multiple digital repayment methods for easy digital collections and enabled our agencies and staff with a special app to monitor collection activity across all employees. This is a key area of focus, and we will continue to monitor and track collection across all the metrics. I now request D. Kannan to head the commercial banking business to take you through highlights of the business.
Thanks, Shanti. I will now speak about the latest business handled by the commercial bank. To start with, I'll speak about the commercial vehicles and construction equipment business. There has been a steep fall in the sales numbers of new commercial vehicles, and hence this was for us also. Structural changes in the industry over the last eighteen months has impacted the economics of the operators even into the pandemic. The last couple of months saw increased fuel prices and lesser availability of loads, impacting the viability of the operators. Goods movement, though, has improved since May. The latest available data indicates traffic movement of around 75% to 80% of pre-COVID period. Engagement with the customers too, is indicating a capacity utilization of 70% to 80%.
Improved traffic and fleet utilization has led to improved cash flows for operators and hence collection efficiency during June and July has been much better than in May. Passenger vehicle operators though, continue to suffer due to various restrictions on their movements. Given this scenario, we are cautious on new disbursements and on managing the existing portfolio, and we are also strengthening our collection teams to handle the existing portfolio. In comparison, the construction equipment business seems to be better placed. The market for equipment has been better and improving month on month. Utilization of equipment and cash flow of customers have been reasonable. Customers in the mining and road construction industry seem to be getting back to near normalcy faster. Collection efficiency on the construction equipment side is better than even the CV business, though not yet the pre-COVID levels.
I'll now give you a brief about the agri business. Our agri business portfolio comprises of SMEs involved in primary and secondary processing, agricultural commodities, large farmers and companies, and allied activities like dairy. These set of customers were less impacted by the lockdowns due to supplying essential commodities. FMC levels and cash flow in the segment was good even during the troubled times. However, non-operation of organized food services like hotels, restaurants, has reduced the demand for their product, and hence, quite a few of our customers have utilized lesser of their limits, which again, comes out to the quality of our portfolio. A very good harvest and timely procurement has helped cash flows of customers in this segment, and collection efficiencies are quite good in this portfolio. Direct exposure to finance is in the non-urban markets.
Most of the borrowers are in agri and allied activities, and hence, cash flows are not severely impacted. Localized lockdowns, though, impact collections on and off, but collection efficiency has improved over the last couple of months, July being better than June and June being better than May. I'll now give you some details of our tractor business. The tractor industry has had a year-on-year growth in numbers in May and June, and our disbursements have also been higher during these months and have also grown. The stock side has again grown significantly YoY. Our deep distribution and our digital processes has helped us to continue with normal levels of operations during this period. Customer cash flows are good due to a good harvest and timely procurement and payments. Collection efficiency during June is close to pre-COVID levels.
Given good monsoon predictions and good customer cash flows, customers are expected to do well, and we are well-placed to take advantage and grow our business. I'll now hand it over to Mr. Manian, who heads our Corporate Investment Banking to speak.
Thank you, D. Kannan. To give you a sense of the corporate and SME book, let me start with the corporate side of it. We continue to be cautious on this segment, primarily to make sure that we don't get hit by some bad bullets. So we have done fair amount of work in terms of classifying the book into high, medium, and low-risk industry categorization, and we manage our risks in the high, high-risk industry, as well as high concentration risks in the portfolio. So we are cautious about companies with high operating costs and high leverage, highly leveraged groups and companies. And so therefore, we have maintained very high alert on our portfolio, and we monitor the portfolio very closely, even as we disburse on a day-to-day basis.
In fact, our coverage and presence in the, in this segment across sectors is quite good, and we continue to keep getting better at it. We can actually scale up the exposures quite quickly once we have, we have reasonable comfort on the economy and the corporate performance in the next few months. So we think it's we would wait for this to happen, and we can quickly scale up the book. Apart, of course, we remain focused on improving spread in the book, which we have achieved quite well. But apart from that, we also remain focused on client profitability and wallet share of non-risk revenues, like loan business.
We are also seeing institutional equities, DCM and investment banking potential from our customers, and it remains a high-focus area, and we are seeing good potential in most of these kind of non-risk revenues. You must also see this book in light of growth in the credit substitutes that you see there, which we have done at the top end of this segment. On the SME, our portfolio behavior remains quite stable. As many of you would recall, we've been telling you that we through the last year had rationalized this portfolio and cleaned up this portfolio, and we have seen a significant drop through the last year by cleaning up the book. Currently, of course, the story is similar to what Shanti and Kannan mentioned.
The portfolio is showing significant underutilization of limits, which is, of course, indicative of lower activity as well as, probably, quality of the book. So while, you know, in April and May, we had difficulty acquiring new customers, we are seeing good traction in acquiring of customers from June and also in July. That we're optimistic about this segment in the medium term. Quick word on the sectoral exposure. If you look at the numbers, non-HFC, NBFC exposures have marginally dropped, and we remain focused on the high end of the NBFC segment. So the HFC exposure, it is essentially an increase in the very, very top-rated entity in the country. And just a quick word, I think we already talked about MSME.
MSME, actually, as on today, we are more than INR 4,100 crore. We are seeing a reasonable response. But finally, we see a response level of 50%-55% of our book being actually disbursed. Like, Shanti mentioned, all the customers are not availing this. But we want to, you know, remain focused and make sure we maximize this opportunity. And, actually, at INR 4,100 crore, we have a disproportionate share of the current levels of disbursement under this scheme. We are close to about 5%, whereas our market share overall is about 2% in advances. Yeah, that broadly gives you a sense of my area. I would like to hand over back to Jaimin on the asset quality issues.
Thanks, Jamin. Broadly, on the asset quality, we closed the period with a gross non-performing assets of 2.7% and a net number of 0.87%. As I mentioned, we've taken a total provisioning of INR 962 crore for this quarter. And I, right now, look at the fact that I take into account the specific provision, the standard provision, the COVID provision, all of that put together. Our total provision is about 107% of our GNPA as of now. So we are pretty much covering our entire GNPA through the whole set of provisions which we have. Our litigation for this quarter at INR 796 crore, which has only one large account, which is into early three digits.
So that's the only single large account which is there. And as I mentioned in his opening remarks, we have followed the philosophy of not necessarily granting moratoriums, and if some of these customers into the NPA, we would be fine with that. So this customer, for example, banks with several other clients, several other banks, and possibly is beginning to get handled as well. As we mentioned earlier, our total Moratorium 2 is 9.65% of our advances as of June thirtieth. Ninety-five percent of the people who have been granted Moratorium 2 are people who were also part of the Moratorium 1. So a very small portion of the book comprising of people who come to the Moratorium 1 come under the Moratorium basis.
Fifty percent of our Moratorium 2 is secured, and, for this calculation, we've taken all of what we have calculated or granted up to the tenth of July. Provisions on account of moratorium now at INR 1,266 crores, which I believe is, considering the RBI requirements and our own belief, it's where we stand today. Our SMA-2 number continues to be small. We are at INR 96 crores as of June 30th, which is 0.05% of our overall advances book. On the balance sheet, we closed the current quarter with an overall balance sheet size of INR 3,78,000 crores. Our capital and reserves at INR 57,700 crores.
As you are aware, we did a CYP issuance during this quarter, and we raised seven thousand four hundred forty-two crores on year-on-year. We continue to have a very strong capital adequacy. Our total capital adequacy as of June thirtieth at twenty-one point seven, almost all of it, twenty-one point one comprising of tier one. On COVID-related, as Shanti mentioned earlier, our priorities have been to look at the safety of our employees and servicing customers. Most of our branches have remained open during this period, ensuring that there's uninterrupted service to the customers. They've continued to open new accounts and in fact, became the first bank to have a digital KYC account opening. We also continue to do our bit with respect to the society and contribution during these COVID times.
And again, hand over back to Shanti for the digital activity which we are doing across the country. Hello?
Thank you, Jaimin. As I said before, during COVID, customers turned even more digital. Mobile first and digital was always a big focus area for us, more so in the first quarter and in COVID times. About 97% of our recurring deposits, 87% of our fixed deposits came through digital channels, and mobile banking Y-Y growth continues to be robust. We initiated many new initiatives here-
...quarter, whether it was applying for or end-to-end digital, we enabled many serviceability in both our voice and chatbot, as I have already mentioned. Right? So for us, you know, this is continuously an area of focus. On the UPI transactions, volume continues to rise, and we enabled many more merchants. We enabled new segments, particularly grocery, which we saw a huge spike in our, you know, shopping area in our portal. We enabled collaboration through open banking that helps us offer more products and services to our customers in a digital and seamless manner. Trends and usage of net and mobile for all kinds of transactions continue to show strong traction during this quarter. We did certain initiatives.
For example, we enabled a seamless process through digital channels for transfer of funds to PM CARES, customers who, and, others who wants to make a donation, right? For moratorium, we ensured an entirely digital online application for customer-based authentication. We ensured customer education both through our website as well as through many calls. To handle the volume of MSME as result of the volume of the public sector, right, multiple bots were institutionalized in a day, and I talked about e-sign. That is a completely paperless documentation for ensuring MSME customers complete documentation for disbursements. I now request Jaimin to take you through further highlights.
We end this quarter at the post-tax profit of INR 1,853 crores, which is compared to INR 1,932, which we had last year, a drop of about 4%. The larger contributors, apart from the bank, were the securities contributed INR 169 crores, which is up from INR 110 crores last year. The life insurance entity brought in INR 161 crores, Kotak Prime, INR 68 crores, business, INR 71 crores, and the international subsidiary brought in INR 34 crores. Our capital adequacy at the consolidation level, again, continuing to be very healthy. We are at 23% overall and 22.5% of Tier I. Our non-lending subsidiaries, this quarter, contributed close to INR 500 crores of post-tax profits, which is up 23% on a year-on-year basis.
And this period, the non-lending subsidiaries' contribution to the overall post-tax profit of the group is in excess of 25%. Our overall advances at the group level at INR 2 lakh 31 thousand crores, and the customer assets included would be at INR 2 lakh 55 thousand crores, which is roughly about 10% drop on a year-on-year basis. Other NBFCs, which is Kotak Prime and Kotak Mahindra Investments, have seen a drop in their advances from a year ago. After the capital raise, which we have done, our current book value per share, including the current quarter profits, stands at INR 383.85 per share. We will talk about some of the major subsidiaries. I would first suggest Mr. Narayan, who has the oversight responsibility for Kotak Mahindra Prime, to talk about Kotak Prime.
Thank you, Jaimin. Just to recap, in 2019-20, car industry was down by 20%, substantially the moment BS IV to the BS VI, because of which new car dispatch came down from December to January 2020 onwards. Post this, in March, we were hit by the lockdown, with practically no car sales happening in April 2020. All this contributed to the fall in advances in quarter one 2021. The vehicle advances as at end of the quarter was INR 16,043 crores. Similarly, other advances are also down, and was INR 6,691 crores as of quarter one. Car sales opened up in June. Wholesale dispatch numbers was about 66% of last June. We at Kotak Mahindra Prime also started disbursement in June, but with tighter credit norms and a cautious manner.
While net interest income of Kotak Mahindra Prime for quarter one is same as last June, the other income is down, with income from processing and other fees coming down substantially and a drop in disbursements. The same again, 63 crores in June 2019. While collection efficiency, as Kannan mentioned, in June, July has improved, collection continues to be a challenge with lockdown and social distancing. The COVID provision in the quarter was 58 crores, in addition to 50 crores in March 2020. All this affected, and profit after tax for Kotak Prime coming down to 68 crores. At the moment, the summary of Kotak Mahindra Prime numbers. With this, I will hand over to my colleague, Murali, Managing Director and CEO of Kotak Life, to talk about the life insurance business.
Thank you, Narayan. I will give you a summary of what's happened in life insurance and general insurance business in this quarter. This quarter has been in the backdrop of COVID, and insurance business needs a lot of, especially life in general, needs a lot of face-to-face meeting, to sell their products, so obviously this has been affected. But during the quarter, we were supported by increasing our level of activity digitally, we have and cross-sell, and also better digital promotion. COVID has done a lot more digital adoption during the quarter. Our individual AP new business premium grew by 8% YoY, against an industry de-growth of 18%. The overall premium has gone down from INR 16.07 crores to INR 12.07 crores, primarily due to renewal premium, which has been affected by the extension of grace period and lockdown.
Kotak Life has very high persistency and is among the top quartile companies in terms of persistency for a long period of time. Our group business was also affected because of lower corporate activity, and that has seen a drop there. Our product share has been very balanced. We have sell both car, non-car income, car, non-car and unit linked continues to be very balanced. Even our channel distribution between bank and agency is very balanced. Our individual protection share of the AP saw a growth from 6.2% to 9.3%. Our total premium has grown by 17.4%. Our solvency continues to be very strong. We are at three times compared to 4.9 times at the end of quarter four.
Our PAT grew by 20.7% YOY. The digital adoption was focused on three areas: distributors, customers, employees. During this period, we were able to generate six lakh activity measures for sales in CRM. Our engagement app for life advisors saw a huge increase during this quarter. Our digital integration with our ecosystem partners showed a great sense of growth. 95% of our policies are going through GD, and banker channel - in bank channel is higher, 98%.
During the COVID period, to ensure that customer services are not affected, a lot of digital assets which are, which were invested in the past are put to use, and also some new assets are put in place, which made customer service easier for the customers who could not visit our branches, could ensure that all the services that look after, including payment of claims, changes of address and these services being rendered. So a number of new services were introduced and through our portal and on WhatsApp. For the employees also, since security of employees is a big thing, and though we kept our branches open to the extent required, we ensured that the employees could operate from their home using, All the employee services were made available through our mobile. So that's been about life insurance. On. I'll make a small point on general insurance.
Our general insurance business, which was purchased some time ago, has done pretty well during this period. It has shown good growth over the last few years. It has got a good, stable balanced team and has got a good underwriting culture. Like KLI, they're also on the top quartile on all the quality parameters and all the customer service parameters, they do extremely well. The underwriting principles are strong, and I think this quarter we made profits, which was primarily due to lower claims and investment income. A good beginning for KGI. KGI has also focused digitally, as digital channels contributed to more than 35% of its business in Q1 FY 2021. The bank sources close to 50% of the business of KLI, our bank, and it's because an end-to-end issuance system, so 94% of their payments is digital.
Now, I hand it over to Jaideep Hansraj, who is the CEO of Kotak Securities.
Thank you, Murali. Good evening, friends. I'm here to talk about securities for Q1 of FY 2021. For the period ending June 2020, we generated a total revenue of four hundred and sixty-nine crores. This is compared to a number of four hundred and eleven crores in Q1 of FY 2020. The PBT for this period was at two twenty-five crores versus hundred and sixty-eight crores for the same period last year, and PAT for this period was hundred and sixty-nine crores versus a hundred and ten crore number in the same period last year. I'd like to talk on some of the macro developments which have happened in the securities business over the last few quarters. One of the biggest positives has been the increase in the retail cash market volume over the last few quarters.
The average daily volume, or ADV as we call it, retail business, was at 36,000 crores odd in Q1 of FY 2020, which this quarter is up to 59,000 crores. However, equity volumes have also shown a significant increase over the last few quarters. Turnover through mobile in the retail cash market has gone up close to three times in the period in question, and Kotak Securities mobile trading app has seen a greater than ten times jump in mobile trading volume this period. I'd also like to talk on some of the opportunities also in the securities market. The total number of Demat accounts, which one has seen in the last twelve months, has seen a big jump. The Demat accounts in June of 2019 were at 3.67 crores in number. It is now at 4.31 crores....
This kind of an increase has not been seen in the securities industry for the last four to five years. Institutional equity has also seen a good increase in revenue, market volume, market share for the period in question. Equity as an asset class is becoming popular with the retail investor, as we've seen with the kind of increase in cash market volume and the number of new accounts. This we feel happens primarily because of the extremely low interest rate in the market and stress in the real estate sector. I'd like to talk on the logistics issues which we faced during the last three months. This has been one of the toughest quarters for some logistics partners. We enabled the business continuity plan for employees to work in any office with security or work from home within the first week of lockdown itself.
We launched our first contactless online account opening app, which was activated within a month of the lockdown. This account opening app has shown a very healthy new account opening data in the months of May and June. 97% of accounts opened in this quarter have been digital. We enabled cloud telephony to record all trading calls and customer conversations as required on the law. We are in the process of revamping a number of our digital platforms, which will go live in the quarters to come. There have been a lot of regulatory changes which have been made or are in the process of being made post fiasco late last year. Some of the regulatory changes which have happened is, actually, one, ensuring that client assets are protected at all points of time. Two, to clear Chinese walls between digital assets and client assets.
Finally, collection of upfront margin in both the cash and derivatives segment, which were introduced shortly. With this said, I'd hand over to my colleague, Nilesh Shah, with the asset management business of the group.
Thank you, Jaideep. Good evening to everyone. Asset management business in the last quarter against the backdrop of ongoing COVID-19 crisis, we focused on servicing our partners and customers on an uninterrupted basis by accelerating digital modes of doing business. We are thankful to SEBI for their proactive approach in facilitating this shift. Today, about 85%-90% of our transactions happen on digital mode, compared to 70%-80% in previous quarter. The average AUM for quarter ending June 2020 fell by 10% over previous quarter, ending March 2020, primarily driven by mark-to-market changes. Quarterly average AUM was reflected in top line as well as bottom line numbers, despite initiating several cost control measures. Handholding our partners and customers through turbulent times was extremely critical. We increased our connect with partners and customers multiple times by adapting digital means.
This ensured that we added 84,292 folios quarter ending June 2020. Our focus remained on building sustainable flows through systematic investment plan. The SIP market share has moved from 5.02% in June 2019 quarter to 5.90% in June 2020 quarter. Our monthly average AUM for June 2020, that is 1.78 lakh crore, is about 4% lower than our quarterly average AUM for March 2020. Our offshore asset management was able to attract new investors in this challenging time. Our offshore AUM increased from $2.08 billion on March 2020 to $2.3 billion on June 2020, with flows and mark-to-market changes. Consistent investment performance is key to asset management business. I am happy to share that Kotak Mutual Fund was selected as overall fund house of the year by Moneycontrol.
Our asset management business remains the first and only signatory to the United Nations Principles for Responsible Investment. We will continue to manage money to improve environmental, social, and governance standards in our portfolio companies under the auspices of UNPRI. Over to you, Hemant, for further proceeding.
Thanks, Nilesh. We should be open to taking questions from anybody.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions, press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue clears. The first question is from Prakaash Sharma from Geojit. Please go ahead.
Hi, good evening. My question is to Uday. You know, you've done a great job in defending the asset quality of the bank. I wanted to get your perspective on, you know, how do you compare the bank as an organization in terms of, you know, how do you balance growth and asset quality where banks easily excel? And so, you know, what is the difference in your view, in terms of DNA? And do you think at some stage you could get into this direction, or you think this way of working is more suited for Kotak Mahindra? Thank you.
Thank you very much. Let me first say that, we of course, have our own style and own perspective on what is the reality, particularly in the COVID world. So our view, and you got to really go back to about six to nine months prior to COVID, we had a very different approach to what we saw as challenges coming forward. And, of course, different people have different views on that. But our view getting into COVID and before COVID was we were concerned about unsecured consumer retail, and that's something which we had highlighted in our call in June, probably in September and December quarters last year. And so we were fortunately going relatively light for unsecured consumer, which is in pretty, single-digit exposures, which we have as a part of our total balance sheet.
We are very clear. We dare to be different if we think what we are doing is right. We don't necessarily like to copy the footsteps of anybody if we believe that we have conviction in what we do. We are clearly our approach to risk is entrepreneurial. We believe risk has to be taken if we can make money out of the risk we take. We do not want to be taking risks where after our showing operating profit, over time, I again want to emphasize over time, there is a leaking bucket called higher NPLs over time. And what we like to see the returns on the loans we give over the period of a portfolio over a two, three, four years as we go forward. And if we believe the risks are worth taking, we will put our capital to work.
That is why I do believe that we did not see risk return going into COVID in unsecured retail and slowed it down. We actually see this as an opportunity as we go forward. We think the banking and the financial sector is currently going through very significant challenges, including on capital. We are, as I mentioned in my initial talk, we do think that there will come a time, and we will take the call to step on the accelerator at that point of time. Our approach is really stepping on the accelerator like entrepreneurs when we see the risk-return matrix working for us, and we will not shy away at that point of time.
A second important point in financial services, which we have learned over the years, is returns have to be looked at, also for areas where you can make returns without disproportionately loading the balance sheet. And in that context, we see a huge opportunity. In addition to the balance sheet risk, which I said, we'll step on to the accelerator at the right time, we see huge opportunity in the markets-related and distribution-related businesses at this point of time, with the advent of technology as well, to drive market share and get a disproportionately higher share of fee and franchise incomes. Our brand in many areas, including wealth management and distribution products, is continuing to be strong.
We also have a strong presence in a whole host of businesses, whether it is a mutual fund business, a securities brokerage business, of course, a life insurance business, and general insurance business. We have built all these effectively as 100% of these belonging to Kotak Mahindra Bank shareholder. Therefore, our approach is focusing on really getting a disproportionate positioning in the Indian financial sector. At the same time, when we take risks, making money and returns for our shareholders, the risks we take. That's our philosophy, not trying to copy somebody, but having a conviction that if we pursue our purpose, we will get there sustainably in due course.
Thank you, Madan. Thank you so much.
Thank you. The next question is from the line of Rahul from Goldman Sachs. Please go ahead.
Yes, thanks. Good evening, everyone. Just a couple of questions. First of all, on the moratorium book, can you tell us what the overdue customers are who have not taken the moratorium so far, but were part of the moratorium one?
I think Jaimin, you answer this question. And, Rahul, as I mentioned in my opening talk, wherever we have had conviction that the underlying customer is viable over time, we have been ready to give moratorium. And when we have had doubts about that, we have been harsher in giving moratorium, even if it means pain on our P&L, whether it's the June quarter or otherwise.
Sure, Madan. Yeah. Makes sense.
Rahul, coming to your question, basically, if you look at the overdue numbers which were there when the moratorium began, that would be roughly about, what? Thirteen odd thousand crores. The philosophy of giving moratorium to has not been at all with respect to whether they were overdue or not. As I mentioned earlier, it was basically being on merit. If you look at what has slipped during this quarter, out of that thirteen thousand odd crores, about five hundred crores plus, crores which were overdue as of February, but have now slipped into NPA in June. The rest of them, yes, cleaning up. Yes, we see collections improving decently in June over April and May, and getting better.
... So just to get this number right, Jaimin, so the reduction from 23 to 9.7%, you know, that's about close to 16-17% reduction. So prominently, almost all of them are making the payments. You know, whatever amounts are due, they have made full payments.
I'm not, I'm not necessarily saying that. They're not paying as yet. Basically, yes, we are getting payments from them, and we are continuing to get payments. Payments in June significantly better than what we saw in April and May. I guess it's still getting to a level where we have to catch up to get to the February numbers.
Rahul, even to the INR 500 crores with Jaimin, add another INR 96 crores, which is excellent.
Thank you. The other question is on the real estate portfolio. Would you be able to share what could be the moratorium numbers in that portfolio? So there are generally some concerns around real estate, you know, portfolio performance, particularly during these times, you know, so just wanted to get your views on that.
I think, yeah, JB?
As we mentioned, Rahul, the broad real estate in the bank is sitting as the wholesale bank. Wholesale bank level, the moratorium in moratorium two has been in low single digits. And, even there, it has been the SME segment which has actually opted for the moratorium much more. The real estate segment, which is sitting as part of the wholesale bank, would be in middle single digits, thereabouts.
Got it.
Just to give you a sense of the portfolio itself, as you know, we have been saying that in the last few calls as well, over the last year, you know, this sector, even pre-COVID, was heading into some kind of slow growth. Therefore, we have been cautious on this sector even earlier, and we have moved the portfolio to much higher rated developers and larger developers, and we have been doing that over the last more than one year. Therefore, we are, as of now, comfortable with our exposures in this sector.
Got it. Got it. Thanks, Mani. That's very helpful. Yes, we have one more question on the provisions. You've, you know, adequately provisioned against, you know, the moratorium loans or the privileges as well. How do you see the trajectory play out over the next couple of quarters? Do you think we still need to get some more provision builds as we are passing by, or, or we're comfortable where we are at this point?
You know, Rahul, this is a. As I said, this is a never normal world. And I tell you today something, you know, one of the principles we have within public, and this is something which we at senior leadership have taken a view on. Whatever we say today, if it is different from what we said one week ago, we are saying today on what we think is present, okay? Therefore, what happens tomorrow is a very fast-changing world. You have to adjust, adjust, and adapt yourself to that. So do we think there is going to be higher, significantly higher credit costs this year compared to last year? Of course. Whether that come. And I don't want to give a number, but whether that number is 150 basis points, 170 basis points, 120 basis points, who knows?
What these numbers, 150, 170, 120, I'm not, I'm not trying to guide you, but we don't know where it goes and when it stops or where, or whether it will go back. I think a clear picture on this will come probably after the December quarter.
Got it.
In the meantime, remember one thing, there is also an increasing noise from borrowers to the policymakers, including industry associations, which I am associated with. The members are wanting one time restructuring. One of the dangers to the financial sector, and particularly, I think this applies with the investors and the analyst community, you may not do this for a long time.
Yeah. Precisely for this reason, you know, the provision build that we are doing would be a good guide, you know, for that, which is why I asked the question.
If there's one thing I would like to say, we will not be scared of slippages. We will not be scared about our GNPA ratios. We will not be scared about giving you our credit costs are high or low, and we will provide what we think is required by us, rather than being worried about how we show ourselves in front of you every quarter.
That's very helpful. Just if I may squeeze in one more question, since you've brought up this point of restructuring. You know, let's say if you know this is indeed allowed by the regulators, would the bank need to do you know some amount of restructuring, you reckon, or our portfolio today is fairly well guarded?
I think our portfolio is well guarded. Having said that, if we believe there are cases which will become immediately viable, we will, we will do that. I think if restructuring does come, I do not know how policymakers are thinking, but if it does come, it will come with pain both on the banks and borrowers. The banks will be expected to make upfront provisioning on a restructured account, just like an NPA. So it is. I would be surprised, it is unlikely to be a free lunch, but it postpones the level of impact, not despite there will be some pain when you do it.
Great. Great. Thank you for that. That was very helpful. Thanks a lot, and wish you good luck.
... Thank you. The next question is from Kunal Shah, from ICICI Securities. Please go ahead.
Yeah, so particularly on the growth side, maybe as you clearly highlighted, that maybe you are looking at the various businesses from this perspective. But currently, are you seeing any segment where it's worthy taking the risk, and you would want to allocate capital out there?
I think clearly, if you look at it, if you look at just the way we have done the SME business, which was a guarantee by the government to the extent of 20%, we have 160 crores till year June, INR 2,000+ crores as of today. That was an obvious easy one, where effectively there is a sovereign guarantee, and you're putting money to work at risk spread, which is significantly better than sovereign bonds. That was a relatively easy one. We are also beginning to see some opportunity coming to us in our special situations fund, where we've seen about 15%-20% of our capital alongside with some investors. We are seeing a whole host of flows there with significantly higher returns.
That is an activity which is going on in full steam, and we see reasonable amount of our capital being deployed in those special situations as of 17.5% is our share, to be exact, along with some institutions which we have got as partners. We are very happy to put money in that, where our risk-return matrix is significant. We're ready to take calls. I think as Nilesh mentioned, we are getting a focus of SMEs, where we think we are getting customers and ability to get share. Shanti mentioned within the consumer space, our focus is much more on secured retail, and as she mentioned, with home loans selectively lapped and essentially more secured space of the balance sheet at this stage in terms of lending.
Unsecured, too, the time will come, and we think that time is some time away, but not right now.
What could be the potential in this, if I have to look at it in terms of PCLBS, and how much maybe currently we have done 40-odd billion, 4,000 crores, but how much would qualify and actually look on books today? What would be the potential out there and even on the special situations?
SME, I think we can still grow at least by a few thousand crores more. From there, it is on the guarantee of the government. So there is some more room which we have, and we are working very hard to get it as much as possible we can. And the special situation, situation, both in terms of special situation in the front situation as well as on our balance sheet. Right now, in terms of the flow of proposals we are getting, the sky is the limit.
Sure. And, in terms of the strategy on the deposit side, given this kind of an outlook on the growth, how should we look at it fitting with this kind of a surplus liquidity, or despite this kind of a deposit strategy had to be some kind of a drive on NIM? So what would be a strategy out there in terms of deposits we have been receiving to date? Would we be willing to go much below the lenders out there in terms of the rate cuts if they are not liquid enough?
Our focus is cost of funds and customer franchise. If you look at our mix on cost of funds, because we have a higher customer mix, what this term calls it, our cost of funds is now already amongst the leading positions in the banking industry. Okay? Despite the fact that we stay higher on our savings deposits than some of our competitors, because what we gave higher on the savings rate, we are more than making up in the mix and now close to 57% CASA ratio. In addition to that, a lower cost of funds through the sweep. Let's call it, this is another 13%. If you take our CASA at 57%, it's a sweep deposit, which is also giving us a lower cost of funds.
We are close to 64-65% of funds which are coming at much lower rate than term deposits, which is what most of our other players in the market have a much larger dependence on that compared to lower cost deposits across these three categories. And Kunal, I think there is still enough room for us to go in terms of getting our cost of funds down even further and while building the customer franchise. We have. If you've seen our growth in NII, it has been significantly benefited by our savings deposit rate.
I remember on every call, analysts would ask us, "Oh, when are you cutting your rates?" So we have, if you've noticed, we have dropped our savings deposit rates year on year on average from 5.5% to now, our cost of savings deposit from 5.5% now to around 4.62% in June. The average comes down further in July to September quarter because of some of the rate drops that happened later part of the quarter. So our relentless advantage on cost of funds, which is a continuing sustainable advantage for our stable and sustainable franchise. That gives us a much better competitive ability to go out there and get better risks at even lower prices. And if we have to take risk, we will want better returns for that.
If you look at the core part of what I'm saying, that's negative YOY growth on advances. Okay? 18% growth on NII is a story by itself.
Sure. Yeah. Thanks a lot.
Thank you. The next question is from the desk of Harish from CLSA. Please go ahead.
... Yeah, couple of questions. Just continuing with your cost of funds, I just want to understand the AAA, double A mark-to-market mortgages right there. We've been relatively a small player. Just want to understand how large we could become there, given, you know, now our cost of funds is like quite competitive, so say a three-year, four-year, how do you see them? These are products where we really wanted to low cost of funds, so-
Yeah.
How do you see that?
Absolutely right, and I'll ask my colleague, Shanti, but if there's one area we are very focused on as we go forward, it is mortgages. So Shanti, over to you.
Thank you, Uday. If you've noticed the last 18 months, I'd say, as you see the growth of the mortgages, we've been focused on growing this because this is competition. If you ask me, the market is very limited. In pre-COVID and post-COVID, there's a huge opportunity to tap this market. We have our distribution in terms of our branches well in place. I talked about the fact that even in the first quarter, we started focusing, and from the month of June, we started this business. So I think we are trusting our strategy, but this is one big area of focus for the bank. We've grown 25% odd in the last 2 years or so, and I think, you know, big opportunity.
There's a second question for you on the RBI discussion paper restricting CEO, you know, promoter CEO tenure. What's your view? Where, how well are we prepared, you know, eventually, if you could give your thoughts around that.
Okay. Just to first, I'll answer in two parts. Discussion paper is a discussion paper to the final guideline. Situation as it stands currently, our board has approved, renewal of Dipak Gupta and myself for a period of three years, starting, from, first of January two thousand twenty-one. That is the board application which has gone into the RBI, and discussion paper is a discussion paper at this stage. Obviously, we will, get to know about what the final rules and regulations are when they come. So that is part one. Part two is the strength of the product. We are very strong, and keep one thing in mind, that we, as, as management, as is nothing you can, you have seen before this call, it is committed to long-termism and medium-termism as the core of building a financial institution.
That is the core, and that will be remaining, and our culture and conduct will be firmly in place. We would like to believe that, this culture will be driven by management and by members of the board, which will include independent directors and non-independent directors, including from the owner family, which includes myself, who continues to be a 26% plus shareholder to the bank, and is committed to a philosophy and a culture irrespective of what ... In many ways, we have the owners, we have the board, and we have the management.
We will have, as a significant owner, alongside with all the other investors, we are fully aligned to a committed culture as between shareholders, board, and management, to build a long-term institution and committed to, entrepreneurship, a cutting edge, conduct and growth, in, opportunities which come in the financial services across the board.
My last question is on costs, given how things are changing so rapidly, right? The one thing that is there in control and probably changing for the positive is how digital all processes are getting. So pre-COVID to now, we were already seeing a drop in cost of funds, sorry, cost income. Could that accelerate really in a very significant manner in the next two, three years? And what's your view there?
You know, I wish I knew. If you can tell me whether what COVID does, how human behavior will be, but here is my personal philosophy in terms of how I see this play out. If you think about the pre-COVID world, the split between physical and digital, and I'm just making up numbers on what I think they were. This is not based on any statistic. Pre-COVID era, the split between physical and digital was, say, eighty and twenty. During the COVID era, the split between physical and digital moved ten, twenty, ten physical, ninety digital. In the post-COVID era, I would like to believe that the long-term equilibrium will be around fifty-fifty, give or take. Which means, even if it is fifty-fifty, the physical moves from eighty to fifty, and digital moves from twenty to fifty on a normalization.
There is a very significant tectonic shift in the mix between physical and digital. But how it plays out, how much work from home, how much office, how much corporate office, ratios of branches. The big question and the elephant in the room you've got to ask is the future of branches. On that point, there is one thing which is clear, is in the post-COVID world, the number of branches needed may be less than the pre-COVID world. Then this means like comparisons as an analyst, the fact of the matter is, we run a much lower network of branches at 1,600 compared to much larger network of many other players. We have the ability of being lighter. The question is, what will be the future of branches?
I don't want to prejudge and say, no more branches, but the world is changing. Okay? We are watching everything. We are having deep introspection in every aspect we do, and we think there are opportunities for sustainable gain in the post-COVID world in terms of how we run our business.
Okay, thank you. Thanks so much. Okay.
Thank you. Before we take the next question, we'd like to inform participants that you know that the management is able to address questions from all participants in the conference. Please limit your questions to two parts. Should you have a follow-up question, we request you to rejoin the queue. The next question from the line of Suresh Ganapathy, from Macquarie. Please go ahead.
Yeah, hi. Just a question on the moratorium behavior, in the sense that there is a school of thought which is emerging, that the customer has taken two rounds of moratorium, in the sense he has not paid money for six months. There is a possibility that he's not going to pay money ever, and unfortunately, whether you call it as moratorium or restructuring, so moratorium is one form of restructuring, right? And history has shown that any kind of moratorium of these or restructuring eventually results in a larger amount of slippage eventually. So Mr. Kotak, I just wanted to know from your portfolio, do you think really there is a moral hazard which is there? And eventually, what could be the slippages from this book? And could it actually also be higher for the system? It would be appreciated.
Suresh, as always, the core question in everybody's mind. So here is my perspective based on what we see in our book and what I think, broadly, what we sense from a common sense point of view at this point of time. Clearly, there is a higher probability of a customer who has not been paying for six months to be a higher risk customer than a customer who has been paying his or her money all the way through the last six months. In the early stages, which is moratorium one, we were all grappling with a tsunami and were dealing with all of our fee. But by the time we came to moratorium two, we got a clearer perspective on what principles we should use for giving moratorium two.
There were the principles which we used for moratorium 2.0, as I mentioned, was that: is this customer fundamentally viable down the road? As we tightened the moratorium, and as you can see, the numbers are on 9.6-odd%, as of Q ten, compared to the earlier number. So there is clearly a focus on viability before giving a moratorium, just off the cuff. So that is point number one. Point number two is in the moratorium, which is, I think, an important aspect of mix, is 80% of the moratorium which we have given has underlying security. Therefore, even if we go. If we go with a fundamental assumption, that a higher moratorium percentage inherently means a little more risk than lower moratorium percentage.
Then you go into looking at the segments you have done, and also the kind of security you have done. Therefore, data analysis and display. So for example, in our moratorium space on 9.65%, if our unsecured was 6 out of 9.65, versus on the current basis at 1.6, 1.7% of 9.65%. There's a very big difference in terms of the behavior post six months. A customer who is an unsecured retail customer, who has not been in the habit of paying for six months, versus a customer who has given a security, will be very different behavior in the future.
Okay, that's clear. Thank you so much.
Thank you. The next question is from the line of Mahrukh Adajania, from Elara Capital. Please go ahead.
Yeah, hi. So I did miss the discussion on payment for moratorium one customers. Just wanted to know, did you give out any figures, or you just said that-
Maruk, we've given out all the figures on moratorium 2.0, which Jaimin has presented.
No, no, no, not moratorium two. I'm talking about customers who haven't paid under moratorium one, and have not rolled over to moratorium two.
Jaimin, can you answer this in terms of what we have given out?
Yeah, broadly what we've said, Mahrukh, is we've had people who've taken moratorium one. 95% of what is coming to moratorium two are people who were given moratorium one. So only 5% has come in as new. Moratorium one, we've seen collections improving significantly in the months of June and July, compared to April and May. So we are still some way to go before we get the numbers of February, which is the pre-moratorium period, the pre-moratorium period. So we still have to get there. We're getting better there.
Okay. And just, the increase in borrowings would be repo borrowings?
Uh, yes.
Yes.
The steep increase in borrowings? Okay.
Yeah.
Thank you so much.
Not even repo borrowing, it will be mostly repo borrowing. Mahrukh, just so that you know, there are three rates for repo borrowings. One is, repo is at 2%, then reverse repo is at 3%, and market borrowings on repo are between 3% and 3.2%.
Oh, okay. Perfect. Thanks so much.
... We'll have to take that as the last question. I would now like to hand the conference back to Mr. Jain for the closing comments.
Thanks very much. This has been one of our longer conferences and meetings, and we have also changed the format for this meeting by giving a better perspective of the bank and the group, including our NBFC subsidiary, our life business, our insurance business, our securities business, and our asset management business, to give you a perspective of overall how we are doing within the framework of financial services. We end this quarter with hope that this COVID situation gets better faster than our current estimate, which is sometime in the December quarter, and the second hope, our current estimate on the economy is we get back to a run rate of 2019-20, about a year from now.
We end financial year FY 2020 with somewhere at 90% plus on a nominal basis, and get to a 100% run rate in second quarter 2021-22. We hope that things turn out better faster, but our confidence has been prepared for this as a basis of our future. We also believe that this is a time for us not only to look at the challenges, but also opportunities which come, and we are ready to take those opportunities in an entrepreneurial way and seize them across the board with an open mind, and whatever shape or form it comes. With that, I would like to thank you all for a very patient one and a half hours call. We really appreciate your time. Thank you very much.