Systematix Institutional Equities. Thank you, and over to you.
Thank you, [Saurabh]. Good morning, everyone, and welcome to Central Bank of India's Q2 FY 2027 post-result earnings call. From the management today we have Shri Kalyan Kumar, MD and CEO, Shri M.V. Murali Krishna, Executive Director, Shri Mahendra Dohare, Executive Director, Shri E. Ratan Kumar, Executive Director, and Shri Vivek Kumar, Chief Financial Officer. I thank the management for giving us the opportunity, and also congratulate the team for a very strong result. I am handing over now the call to our MD, Shri Kalyan Kumar, for his opening remarks. Thank you, sir.
Yeah. Thank you. My colleagues on the board, Shri Murali Krishna Ji, Shri Dohare Ji, Shri Ratan Kumar Ji, my senior team present here, and my dear all the analysts and all connected through VC and also present here, good morning. First of all, I congratulate each one of you for this good Q2 2027 result. Your beloved bank, Central Bank of India, total business has been actually grown by 20.54% to INR 889,541 crore. And total domestic deposits increased by 14.41% to INR 508,509 crore. CASA deposit also stands at 44.65% of total deposits. Global advances increased by 29.83% to INR 381,032 crore, in which domestic advances stood at INR 372,939 crore, growth of 27% year-on-year. New entry, we have opened GIFT City branch on 29 June 2026. They contributed in overseas advance of INR 8,093 crore.
And in this process, we have given guidance for business growth 14%-15%, and we have achieved 20.54%. In deposit growth, our guidance was 10%-12%, and we have achieved 14.41%. In advances growth, our guidance was 14%-16%, and we have achieved 29.83%. CASA guidance was 48% ± 1%. Here, due to obvious reason, due to FCNR(B) mobilization and all, this we could not meet the market guidance, and we closed at 44.65%. But towards the RAM sector, retail, agriculture, MSME, as you know, Central Bank of India is having its 65% branches in rural and semi-urban area. The RAM being our bread and butter for this organization, this business grew by 21.11%. The individual sector wise growth also is very good. Retail, we reached to level of INR 112,299 crore and growth of 24.49% year-on-year.
Agriculture reached to INR 67,778 crore and growth percentage is 19.92%. MSME reached to level of INR 74,196 crore. Percentage-wise growth is 17.36% year-on-year basis. This also, actually, our guidance to market was RAM capital credit ratio 65: 35 ± 5%, and we have closed at 68: 32. That ratio actually also aligns with our market guidance, which we have given. Towards our efficiency side also, business per employee has improved to INR 25.26 crore on year-on-year basis as against INR 21.48 crore for the quarter ended September 2025. In profitability year-on-year basis for September 2026 quarter, net profit for the quarter has increased by 21% to INR 1,469 crore, up from INR 1,230 crore previous year. Operating profit for the quarter stood at INR 2,268 crore from INR 1,786 crore with a growth of 27%.
Net interest income grew by 26.28% on year-on-year basis to INR 4,146 crore in Q2 financial year 2027, as against INR 3,283 crore in Q2 financial year 2026. Total income for Q2 financial year 2027 improved by approximately 15% and reached to INR 11,737 crore for Q2 financial year 2027. Cost to income ratio, though there is improvement, but it still, it is on higher side. It is 58.95% for Q2 financial year 2027 as against 62.42% Q2 financial year 2026. Cost to income ratio, we have given guidance for less than 56%, but here we could not match the guidance and closed at 58.95%. Major highlight I would like to make that apart from staff cost, that is 37.65%, there was 113 basis point improvement in other operating expenses year-on-year basis.
As quarter-on-quarter also, it will give you comfort that quarter-on-quarter basis also, net profit grew by 11%, INR 145 crore in absolute terms to INR 1,469 crore. Operating profit grew by 3.75%, that is INR 82 crore in absolute terms to INR 2,268 crore. Net interest income grew by approximately 6%, INR 232 crore in absolute terms to INR 4,146 crore. Interest income grew by approximately 7%, INR 666 crore in absolute terms to INR 10,057 crore. ROA improved by three basis point and stood at 1.03%. Here I would like to mention, NIM, we have given guidance of above three, and we have maintained at 3.01%. Slippage ratio, we have given guidance of less than 0.25%, and it is 0.24%. Regarding asset quality also, our gross NPA stood at 2.39%.
That is also aligned with our guidance given to the market that it will be below 2.50%. Net NPA stood at 0.31%. There is improvement of 17 basis point, and that is also aligns with our guidance to the market. Provision coverage ratio stood at 97.16%. Regarding slippage ratio, as I told for quarter, it is 0.24%, and it is well within our guidance, less than 0.25% on quarter-on-quarter basis. In that way, I can tell you on almost all the parameter of efficiency except cost to income ratio and business per branch and CD ratio, I will highlight that also has reached to 75%. Liquidity coverage ratio will grow to 156%.
Overall improvement in almost all the efficiency parameters and business numbers, and I really thank all our stakeholders, including our customers, regulators, governments, and all you beloved shareholders and stakeholders, to this great organization, Central Bank of India. For what's my initial remark, I conclude here. Now I am open to the questions.
Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question, may click on the Raise Hand icon from the Participants tab on your screen. We will wait for a few minutes until the question queue assembles. We are taking our first question now. We have Mr. Ashok Ajmera of Ajcon Global. Mr. Ajmera, please unmute your microphone and go ahead with your question. Mr. Ajmera, we are waiting for your connection. Please go ahead with your question now.
Mr. Ajmera, we are unable to hear you.
Please unmute your microphone and go ahead.
Can you hear me now?
Yes.
Yes.
Congratulations.
Mr. Ajmera, you are not audible now.
Mr. Ajmera, would you like to try one more time? We are unable to hear you. All right, we will move to our next registered member. We have Mr. Sushil Choksey of Indus Equity. Mr. Choksey, please unmute your microphone and go ahead.
Congratulations to team Central Bank for an excellent performance and a sustainable guidance. Sir, I was looking at your business mix. Can you throw some color, you guided on the CD ratio and the business mix for the second half, but can you see within RAM, where are you seeing growth? Or it's per ticket average housing loans, car loans which are growing, or any other segment like gold loan, which has become a major force at Central Bank, and you'll have a very ambitious target. That's what I hear from the marketplace.
Thank you, Mr. Choksey, for asking this very good question. Regarding business mix, we have seen a ratio of corporate and our RAM is 38: 68. It aligns with our guidance given to 65: 35 ± 5%. Growth of RAM sector was 21%. We reached the level of INR 254,273 crore. Within which, retail has grown by 24.49%, agriculture has grown by approximately 20%, MSME has grown by approximately 17%. So good growth in all these three segments. Rightly told by you, this is going to continue because Central Bank of India is having its presence, 65% branches are in rural and semi-urban area, which gives us this capability to support this important part of Indian economy. We will continue to grow with that. Rightly said by you, two latest growth engine.
Previous quarter it was also there, but here during last two days, 15th and 16th October, we were doing mid-term strategy meet with our all general managers and regional heads. Collectively, we brainstormed regarding revisiting our strategies and to focus which area we must focus and how to grow, and not only in next half year but in longer term also. There we have zeroed in important growth engine for gold loan side. We are going to open customized 116 gold loan branches, where our TAT would be maximum 30 minutes. Within that, all customization is being done. In gold loan portfolio, we are planning to add good amount of business, not only in next quarter, but also next year, I can tell you. Another focus area is the SHG.
We are having tie-up arrangement with the 26 states NRLM, and those are good opportunity to give loans to credit linkage to those SHG members. Our return is also very good in SHG side, and also there is very good opportunity to support these segments. In that way, this gold loan SHG, we are going to be the focus area. Apart from, as housing loan, our more than 50% advances under retail comes from housing loan. This is going to be the flag carrier now also. Car loan also, better dealer tie-up, both builder tie-up and car dealer tie-up are going on. Add more and more CASA accounts, salary accounts we are focusing upon in this quarter.
Huge planning we have done towards entering into the educational institutes, the religious trusts, and also hospitals and other transport operators in a big way because we have established our marketing setup at different places. 300 marketing officer we have recruited in our bank. With that workforce available and different products available for different segments of customer, those CASA customer will give opportunity, particularly salary account customer, good opportunity for cross-selling of personal loan also. These are going to be our priority in next quarter. Thank you.
Sir, I would ask you if you could give me if there is an uptick in average ticket in gold loan, not only because of price but the borrowing pattern, and the same for housing loan and car loan. Because a lot of traditional Indians are moving from small cars to SUVs. The similar way gold prices have moved up and housing market is also 10%-20% up on a national average basis. Is the number of loans increasing or the average ticket is increasing?
Both. I will give you one example. Very recently in home loan, INR 22 crore Cent Green Home we have provided. Even ticket size is not a bar for us, any restrictions is there. Now, I can tell you, average ticket size is increasing day by day. For housing loan also, car loan also. Depending upon our credit underwriting and ability of borrower, that is never a bar. Naturally, we are more focusing towards the good builder side where better ticket size is available. But as we are having our branches at rural semi-urban, where lower ticket sizes also, up to INR 30 lakh it is totally online basis. Above INR 30 lakh, normal underwriting part is there, and ticket size, as you are seeing, that it is going to be our priority as we have geared up our CPAC also.
We have revisited CPAC structure so that they are in a position to take even big ticket loan, not only in a housing loan or car loan processing, but also for MSME loan, 32 sectors we have identified. Separate credit managers are posted so that they can even underwrite the higher ticket size MSME loan also. It is both, I will say, numbers of customers and also ticket size while also good number of customers will underwrite with the strength which Central Bank of India is having now.
Sir, two questions. How do you see CASA growing from here till March end, and the deposit base? I know your guidance number would be 12%-14%, 15%, but strength of Central Bank of India has always been CASA. If you look historically over last 15 years or 10 years, despite being in PCA that time also, deposit was our strength, and the franchise is very strong in western region. How are we strengthening further for cross-selling this CASA base? You said about salary accounts, but what other factors including digitization, digital apps, cross-selling, you have tied up with multiple insurance as well as mutual funds. You may be tying up for brokerage houses. To enhance Central Bank of India strength with certain multiple new ventures. Second, what is the corporate pipeline looking from now?
I understand we are very good at RAM, but a balance of 65:32, 65:35 or 62:38, what area of business are we focusing on corporate book too? And the third question would be your outlook on treasury.
Regarding CASA growth, rightly said by you, people love Central Bank of India having its presence 115 years in service to the nation. Therefore, it is being reflected in our CASA numbers also. I will give you one number, our CASA has grown by 9.23%. We have crossed INR 226,774 crore, growth of 9.23%. Savings has grown by 9.32%. And current account also have grown. Actually, the kind of initiatives we have taken, as I told you, we have multiple customer acquisition center and also government business centers also we have opened. In that way, we are geared up to play whatever strength we are having geographically. You also told western side, we have good presence. But we are having good presence in Bihar, Uttar Pradesh, and in also Maharashtra side. These are the areas.
Madhya Pradesh also we are having good number of branches and good presence. 2,658 branches out of 4,622 branches of Central Bank of India are having CASA percentage 50% and more. That is the strength Central Bank of India is deriving due to its geographical presence and the initiative which we have taken since last one year, setting up of the customer acquisition centers, government business centers, placement of the 300 additional marketing officer, 200 - 250 marketing officers were already there. This 500- 600 marketing team. Also we have started wealth management. We are meeting, and we have recruited some marketing officer under wealth segment, and we are going to in a big way from next, I understand in January to June quarter, it may come in force fully.
But now we have started those things also will support our bank in not only mobilizing good CASA accounts but also maintaining those CASA accounts with us. The CASA is strength of this organization, and with the initiatives which we have taken, certainly, it is going to continue. Credit card also next year, in June or like that, we are going to be starting our credit card facility, which will support in mobilizing salary accounts and all. No doubt, if salary account increases, then it have good opportunity for cross-selling for all the retail products and also selling of other ancillary business and everything would be there. Cash management services also is going to be launched very soon. Two modules already launched. Other modules in next two months we are going to launch. That will support us in mobilizing current account from our corporates and also new customers.
Regarding your second question, corporate. In corporate, approximately INR 7,000 crore we are having undisbursed sanction. That we are having, and under process is INR 5,000 crore, and under consideration INR 11,000 crore. Corporate loan book, INR 24,000 crore loan book under consideration we are having. In very near future, we are sure that we will get good traction in this corporate line. You see, previous year our corporate book was INR 83,000 crore. This year it has grown by 42%, INR 118,666 crore. That is good growth. Major area was roads, infrastructure, and also data center, technology side. All these things were our focus area, LRD, these were focus area. Agri, food processing, also some finances to NBFC, hospitality sector. These were major area where we focused, and in coming quarter also, we are going to focus upon. Regarding treasury, you know as treasury yield is hardening.
We ended by more than 7%, 7.19% yield during the 30th September period. Now also it is progressing higher at 7.25%- 7.40%. That due to global turmoil and also rising rate interest scenario and also rising inflation and also having U.S. rate at 5.35%+, that scenario doesn't being comfort towards better treasury income. If you see our AFS, previous quarter from INR 843 crore to this quarter INR 1,023 crore. There was reduction. Mark-to-market challenge was there. In the coming scenario also we are observing as yield is getting increased. In that circumstances from treasury, there are challenges. Though our treasury team has done a good job. They earned INR 56 crore by selling IPOs, by participating in IPOs. In the higher yield rate condition, the reinvestment side also, we will reinvest our maturing securities and all to get better benefit.
The outlook of treasury, the best opportunity, market is not good, you are aware because in AFS side, which is more exposed to market condition is a challenge. In my opinion, it is going to continue in near future also. But building our portfolio judiciously and not only driving the interest rate but also understanding properly and building our portfolio and reinvesting the things and the opportunity available within the law, I feel that treasury outlook will be challenged, but it will contribute to the profitability as it has contributed this quarter also.
Thank you so much, sir. Mr. Choksey, if you have any more questions, you can rejoin the queue. We will take our next question now. We have Mr. Ashok Ajmera back in the queue here from Ajcon Global. Mr. Ajmera, please go ahead again.
Sorry, sir. There was some technical problem, and I have missed some of your replies also. Can you hear me now?
Yeah. Yeah, Ajmera ji. You are always welcome. Yeah.
Sir, so congratulations, sir, for very good set of numbers. The bank is really doing very well, sir, even under your leadership also. Sir, going forward, like most of the questions, initial your address you have answered. But one is that on the ECL provisioning, I might have missed your answer that how prepared we are. What is the total quantum to be provided? Can you give some color on that, sir, some information?
Ajmera ji. Actually, ECL provisioning, previous quarter also, I told INR 1,525 crore for stage one, stage two, we have provided till now. Stage three, 100% provision is there. Bank is prepared for meeting this requirement. Models are being prepared, data quality and all those aspects we are working. We expect that we have given guidance previous quarter, approximately INR 5,000 crore -INR 5,500 crore may be required. With the kind of profit Central Bank of India is garnering, we are sure that it is not going to be a challenge for Central Bank of India for meeting ECL requirement, scheduled for implementation from 1st April 2027.
Sir, point well taken, sir. Sir, we are doing very well in the retail side of the loans. Even our home loan rates are also very competitive. Going forward, sir, I might have missed your answer, what is the plan of increasing the corporate book, and where do we stand, and what is the average yield now we are expecting from the corporate book, and what is the sanctioned pipeline and the proposals which are in the pipeline, sir?
Yeah. See, previous year, if you see our corporate book in September 2025 was INR 83,000 crore, and this September 2026, we have closed by INR 118,666 crore. Growth of 42%. Out of total book, 32% comes from this corporate side. There is increase of year-on-year basis, 42% in corporate book size. Actually regarding pipeline, answering your question, pending disbursement is INR 7,000+ crore, and proposal of INR 5,200+ crore is under process, and INR 11,000 crore are under consideration. They may come in the [NBG] and all. Approximately INR 24,000 crore corporate loan book at present we are actually having. So you will have good growth in corporate side. Regarding the average yield, this year our overall average yield was 7.87% in the yield on advances, if I can tell you, 7.87%.
Major areas where we are focusing upon, it is renewable energy, roads, and also data center, some exposure in real estate, hospitality and manufacturing segment, NBFC, agri food processing, logistic side. These are the major areas where actually we are focusing upon in this quarter and coming quarter.
Very good, sir. Sir, coming to the recoveries, recovery from the written-off book has been decent. Going forward, what do we expect? We expect some more major bounty from this. What is our total written-off book balance outstanding, and how much we expect on an average in percentage term? Secondly, on the recoveries, you know that old aviation account. What is the status there? That additional collateral which we had of INR 1,200 crore or INR 1,500 crore, whether that has been realized, and how much recovery has already taken place, and how much more we do we expect to recover from that account, sir?
See, recovery written off was INR 485 crore in this quarter. Good number we have got.
Yes.
If I talk about the pool, it is INR 31,301 crore. We are having ample pool now also as of written off accounts from where we can actually recover good significant amount. Previous year you have seen more than INR 2,000 -INR 2,700 crore we have recovered for the full year. This year also, I find sufficient ground and sufficient resources available to recover INR 2,500 + crore in this segment. Regarding answering your aviation sector account, recovery expected in INR 700 crore through SARFAESI. SARFAESI, the auction process is going on, and we have got bidder also. We may get INR 700 crore in this aviation account in this current quarter or next quarter. There are other accounts also, big accounts also, and smaller accounts also from where we will improve our recovery numbers.
I can assure you that kind of book and things available with us, recovery numbers are going to be better what we have done in this quarter. I am fully confident about that.
Very good, sir. On the recovery for the small account under the OTS, how are we framing our policies? Are we liberal to get at least those account where 100% provision has already been made and the securities are minimal? What is our emphasis of recovering on those small recoveries, which may make good amount in the absolute terms?
Thank you, Ajmera ji, for asking this question. See, smaller accounts for that special OTS scheme we have got approved from our board. It is very transparent process. We are coming with this technological capability, we call it e-OTS. Here, age of NPA and availability of security and provision. These are the logic through which system itself derives that this amount if you pay, your account would be, OTS would be done through digital process and branch assisted process. This we are going to implement very soon. There is another scheme—
Very good, sir.
—is called [Krishi Kiran Mozari Scheme]. Through BC agents
Yes
in the small value accounts, we are actually recovering good amount of recovery in a very transparent process in there. You are right, because we deal with retail business. Good and some are under slippage under INR 10 lakh segment. There all these measures, e-OTS and also this [Krishi Kiran Mozari Scheme] through BC agents and all these things are going to be very effective tool and support us in recovering the desired amount as per regulatory guidelines and also cleaning up our books. So that side also our focus is there. Auctioning the property available collateral security are there. I am giving you one example. Previous year, total auction of properties was 485. This half year, we reached that number. Very effective monitoring of SARFAESI process. That also giving us, actually, bringing those customers on the negotiation table.
Through OTS code also we are recovering significant amount and closing those accounts through OTS also. That way I can tell you from recovery side, the asset quality which we are observing 2.39% and 0.31% net NPA, it is going to be continuously, you will find improvement in these numbers in coming days. Mr. Ashok Ajmera-
Thank you so much, sir.
Yeah.
Thank you so much, sir. Mr. Ashok Ajmera, if you have any more questions, you can rejoin the queue. You can click on the raise hand icon again if you wish to ask a question again.
Sure.
We'll move to our next participant. Before that, reminding all the participants, if you have any questions, please click on the raise hand icon from the participants tab on your screen. We are taking a next question now. We have Mr. Rajesh Agarwal of AUM Capital Market. Mr. Agarwal, please unmute your microphone and go ahead.
Thank you, sir. Good morning, Mr. Kalyan.
Good morning.
From the last few quarters, we have been tracking Central Bank, and let me congratulate you for the kind of numbers that you gave in the last quarter and followed by this quarter. It was really good, I would say. I would say we are very satisfied with the kind of numbers because we have recommended to so many of our clients. There was just one query which I would like to have a clarification, like, reported gross NPA, net NPA, slippages, they all improved, yet provisions went up. Can you throw some light on the breakdown of the provisioning, whether into standard assets or floating or technical? Why this specific provisioning went up and which segment maybe, specifically retail, MSME or unsecured loan, where are the reasons for this higher provision? And the last one would be, what is your credit cost guidance for FY 2027?
Yeah. Thank you, Rajesh Agarwal, for your good words for Central Bank of India. You know we must build enough provision in good times for facing any challenges or anything which may come in future. With that, it is very resilient, and I will say the resilient approach which bank has taken. For that purpose, you must have been observing our provision coverage ratio have increased since last quarter. That is the main reason.
Otherwise, actually, out of another one important reason, our standard advances also have grown significantly. Because previous year, on September 2025, provision on standard advances was INR 30 crore or INR 37 crore. Now it is INR 399 crore. That also increase is there. So these are the reason behind increase in credit cost side. Hope I have answered your question, Rajesh Agarwal.
Thank you, sir. Thank you so much. Best wishes for future quarters too.
Sure.
Thank you so much, sir.
Thank you, Rajesh. Thank you.
Thank you, Mr. Agarwal. Requesting participants to please click on the Raise Hand icon from the Participants tab on your screen. We will take our next question. We have Mr. Ashlesh Sonje of Kotak Securities. Please unmute your microphone. Yes, please go ahead.
Hi team. Good morning. Sir, a few questions from my side. Firstly, on the ECL, you have reported a credit cost of roughly 50 basis points in this quarter. Do you have a sense of how much your credit cost will be next year after you have transitioned to the ECL regime?
Yeah. Ashlesh, thanks for this question. Actually, ECL, we are preparing. I understand the banks which are having better credit underwriting would have better control over the credit cost. This year credit cost 0.53% is actually, you must have observed what the answer which I have just now given to Rajesh Agarwal. We have just to give you comfort and make you understand in a better way how Central Bank of India is prepared or preparing itself to face the consequences of implementation of ECL. That will give you answer. March 2025, our slippage ratio was 1.47%. March 2026, it came down to 1.16%, and this quarter it is 0.24%, and for half year it is 0.41%-0.45%. What I mean to say, we are preparing ourselves, graduating ourselves to take challenge of ECL for starting from better credit underwriting quality.
There we are having one processing center that we call CPAC, Credit Processing and Approval Centre, which is normally at all regional office. This CPAC setup is there. Earlier, in principle, approval concept was not there. You all are aware that at branches, credit underwriting skills are very rare. Therefore, all branches, whatever leads they are generating, they will send to the credit processing centers at regional office. They will give in principle sanction. Also after that, the role of this underwriting quality, after that, monitoring of those advances. Monitoring match mandates, SIE and also proper alignment with the field force, field owners, street persons, and also regional collection centers, head office war room, and all the technological capability also for generating early warning signal alerts and acting upon those alerts in a very structured way. We have implemented these aspects.
Therefore, credit monitoring division is doing good job in maintaining good asset quality. Starting from underwriting to post trade monitoring also. In that way, I can tell you that this credit cost next year also, I am expecting quarter-on-quarter basis, it is going to remain less than 0.75%, up to 0.75% only. This guidance which we have given, we are going to maintain this guidance next year also. Ashlesh, hope I have answered your question.
Understood, sir. Sir, one follow up there. On the ECL one time transition, you indicated that the quantum is roughly INR 5,000 crore. That would be taken as a direct hit to the net worth on the 1st of April. Is that understanding correct?
Actually, see, our total requirement would be INR 5,000 crore -INR 5,500 crore. Out of that INR 1,525 crore, already we have kept additional provision. So difference only we will have to take. The way we are making profit, it would not be a big call. Options given by regulator, both taking one time hit or staggered, we will discuss together and we will take a call on this. Currently, I am not in a position to comment on this part, whether I will take at one way or we will stagger it.
Understood, sir. Sir, just one last thing. The ROA seems to have improved quite a bit over the past few quarters. Can we assume that this ROA will remain, let's say, about 1% for the foreseeable future?
I am fully confident that ROA is going to be above one. The guidance which we have given, I am still agreeing to it, and I am sure because in the see, 25 basis point repo rate has increased. We have maintained our deposit cost of deposit at 4.60%, and yield on advances 7.87%. Now we are focusing upon gold loan side, SHG side. These are the growth engines where we are focusing upon, apart from our retail and digital channel SME. Our 61% loan book are linked to external benchmarking. In rising rate scenario, which we expect, our books are going to be more, actually it is going to benefit our book side. In that way, I am sure that our ROA is going to remain above one.
Sir, and this expectation holds true for, let's say, next year also, FY 2028, FY 2029. Is that an endeavor you have?
See, our endeavors are like that, but situations are changing very fast. It would not be prudent to comment upon for next year because you know things are changing very fast. Global conditions are also impacting within country also, some broad condition, El Niño effect, all these things are there. But I am confident about the strategies which we have taken and the strength which Central Bank of India is having. In CASA side, mobilization of low-cost deposit, while other organizations are struggling, our growth is, CASA growth is still more than 9%. The low-cost deposit mobilization is not a challenge for us. And advances side also, this external benchmarking rate, I have 61% books are belonging to that. Gold loan would have very good traction always, and SHG also good yield is there. Therefore, I am hopeful that our ROA is going to remain above one.
Understood. Perfect, sir. Thank you very much for answering my questions.
Thank you, Ashlesh.
Thank you so much. Requesting participants to click on the raise hand icon from your Participants tab on your screen. We are taking a next question now. We have Mr. [Deepak Kala] of Trimurti Enterprise Private Limited. Please go ahead.
Hello.
Yes, please go ahead now.
Yeah. Good morning, sir. First of all, congratulations for such good numbers. My question is on yield on advances. When I see the yield on advances of our bank, it is comparatively lower when we compare it with the other banks. Could you please tell me the steps we are taking to increase the yield on advances?
Yeah. [Deepak], actually, thanks for this question. You are right, yields on advances 7.87%. As I told you, this is actually for this quarter also, and earlier quarter also, if you see, our more than 61% book are linked to external benchmark, that is repo rate. Previous year, 125 basis point reduction was there in reference lending rate, and that has impacted our book very high. If you see the cost of deposit side, as it is contract based, it takes time. It comes with lag when it gets stabilized. The margin is 4.60%, and yield on advances, that is why we were able to manage NIM above three and ROA more than one. So yield on advances, that is why we were biggest impacted, our portfolio actually impacted due to those rate cuts.
But in coming scenario, there are scenario when rates are going to increase, so it will benefit in improvement in yield on advances, one thing. Another aspect which is also very important, gold loan. More than 8.5% is the average yield which we derive from the gold loan side. We have built book INR 41,000 crore. That is good growth, and with the kind of initiative gold loan sale we have established under direct leadership of our Executive Director business. Gold loan is going to be because 86 branches we are having in South India. We are focusing upon Chennai and Hyderabad, these two zones, on gold loan side. That will also support us in improvement in yield. SHG, more than 26 states we are having tie-up with NRLM. They are also credit linkage with SHG. They are also good return and very less NPA is there.
That is why these are the focus area where I am expecting that yield on advances will increase in coming quarters.
Sir, thank you for the answer. Sir, one more follow. I want to know about the investment in technology the bank is making. Because when I compare the apps of our bank and when I compare it with the apps of, let's say, the biggest bank in India, so there is some difference in the technology and interface.
[Deepak], actually see, current customers wants very good technological platform. There is no second thought about it. And where mobile banking and other technological like internet banking, all these user experience is very important. For that purpose, we have created new banking emerging department, NBET, and the person who can understand customer's requirement, he's heading that division. He was earlier heading our biggest zone. We have given them this opportunity to lead this division so that the person who have better understanding about user experience, so that we can bring a fine-tune changes which is desired from the customer's perspective. It is our topmost priority. What you are indicating, I understand. That area, if not improved, then all the improvements we can't sustain. That also I agree with you. For CASA or any other, user experience is very much important.
That I can tell you, and a lot of initiatives we are taking in digital side also. 45 journeys already we have launched. We are revisiting also, so that looking to the change customer's choice or also having better alternatives provided by our competitors. We are also fine-tuning all those journeys and channels to improve user experience. That is topmost priority, and in next quarter you will find significant improvement in these areas also.
Thank you for the answer, sir. That's it from my side.
Thanks, [Deepak].
Thank you. We will take our next question now. We have Siddharth Rajpurohit of Systematix Institutional Equities. Siddharth, please go ahead.
Yeah, thank you for the opportunity. Sir, our NIM has come down, say, 5 basis points this quarter, but repo rate.
Yeah.
Hello, am I audible now, sir? You are audible now, sir?
Yes.
Yes. Okay, sir. Sir, the repo rates have started to move up. What is our assumption? Will our margins also improve from Q3?
Yeah. As I told, our advances book, total advances book, 68% is RAM segment. Out of those, 61% linked to external benchmark, and there if repo rate, reference rate increases, then certainly there is positive impact on yield of our book portfolio. Therefore, there are every likelihood that margin will increase in this increasing rate scenario.
Okay, sir. And sir, how do you see, sir, our gross slippages are kind of hovering down for the last three quarters. What is your understanding, sir? How do you see the implications of El Niño if one state has declared drought and others could also? How do you see this scenario evolving? Do you see any impact on the collections in the rural areas?
First of all, in this quarter, we didn't sense any such kind of stress signals. Recovery is very good, including agriculture side also, except some places like Pune and [Ajone], there was slippage in agricultural segments. There might be other regions for it. Apart from that, we didn't find any signal of distress in asset quality in rural area. Particularly, you are asking about rural area. That's why there is significant drop in slippages number. Thanks to the vertical CRMD for taking all the corrective steps and proactive steps, rather, and also field soldier and technology integration work with better coordination. That has really supported us in maintaining slippage ratio. Regarding your question of El Niño impact or drought in the country, this is the right impact, but we have to look at in future how it actually progresses.
Current time, based upon my experience of this quarter, I can't comment that there might be big challenge, but how it pan out in coming quarter and afterwards regarding this drought, let data come, then I will be in a position to comment about this.
Okay, sir. Sir, there was a reversal in provision in the investment part in the SRs. Can you throw more light on that, sir? Reversal of provisions.
Was there? I don't know, sir. Mr. [Askar] will answer this one, please.
Good afternoon. This one is mainly on account of we have received some amount as a part payment.
NPA [Non-English content] ?
Yes, sir.
[Achha], we received [Jai Prakash]'s farm loan.
Other security received, sir.
Other security.
[Non-English content] sir.
Yeah.
We have received some amount as a part payment. That is why the provision made is lower when compared to the previous quarter. However, we made 100% on that one, so outstanding reduced. We have seen the reversal in the provision.
Yeah, okay.
Anything more, sir?
Yes, clear, sir.
Yeah.
What is the total sanction and disbursement under the ECLGS scheme now? The ECLGS 5.0.
Sir, under ECLGS, under MSME segment, we have sanctioned around INR 4,000 crore, and out of that fully we have disbursed. Only INR 50 crore-INR 60 crore is balance remaining for the disbursement.
Okay. And sir, what is the amount of FCNR(B) deposits that we have raised in the quarter?
Yeah. We have raised a good amount, actually $926.74 million across 731 accounts.
Sorry, sir. What is the amount?
$926.74 million across 731 accounts.
Okay.
Yeah.
Okay, sir. What is the overseas loan that is provided against this deposit, sir?
$794.60 million.
What is our current average LCR?
Average LCR, that is 156%.
Okay. Yeah. Okay, sir. Thank you. I am done.
Siddharth, thank you.
Thank you, Mr. Rajpurohit. Since there are no more questions in the queue, I will now hand it over back to the management for closing remarks. Over to you, Mr. Kumar.
Yeah. Thank you. Really, from core of my heart, I thank all the stakeholders. I assure that in coming quarter and also next quarter, the kind of interventions we have taken on bringing overall improvement in people, process, and technology will certainly going to sustain these numbers. Also there will be significant improvement in efficiency numbers in coming quarter. Once again, thanks for connecting and thanks for showing interest in Central Bank of India. Thank you.
Thank you so much. Ladies and gentlemen, this concludes the Central Bank of India Q2 FY 2027 earnings call. Thank you all for your participation. You can now click on the Leave icon to exit the meeting.
Thank you.
Thank you, everyone.