Jana Small Finance Bank Limited (NSE:JSFB)

Q3 23/24

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Feb 26, 2024

Summary

Nine-month PAT reached a record ₹348 crore as deposits outgrew assets and the secured portfolio approached 60%. Management expects further secured-mix gains and lower credit costs, while prioritizing disciplined growth and cost control.

Good evening, everyone. My name is Ajay Kanwal. I am the MD CEO of Jana Small Finance Bank. As most of you folks will know, this is Jana Small Finance Bank's first analyst meeting. So thank you everyone for coming here today evening. Before I start, I have been told to advise all the analysts here there are two golden rules for all analysts. The first rule is they are always nice to institutions who come the first time. So all of you have to be very nice to us today. The second rule is to remember the first rule. Before I start, I will introduce the team from Jana. I will start from my left-hand side, Gopal Tripathi. Gopal is our Treasurer. Gopal is based in Mumbai. Sudhir Madhavan. Sudhir leads our microfinance business, which we internally call as retail financial services. Tamal Bandyopadhyay needs no introduction, and which is why I decided he doesn't need a blazer with us today. Tamal is our advisor, and Tamal is very famous on writing for banking and finance for the last, over two decades, Tamal. He's been our advisor for last few years. Abhilash. Abhilash is our CFO, and you will hear him soon. Raman. Raman is the most experienced banker amongst the management team, roughly about 35 years in banking. Raman heads our credit business. Srini looks after our branch banking and liability business, and of course, the flavor of the day, given all the conversation around the CD ratios. Rincoo Vachha. Rinku looks after our affordable and micro-housing business, and he's been with the bank since 2018. We thought it'd be nice if you can hear not just me and the CFO, but also meet and hear some of the key business leaders of the bank. So that's us. With that, I would like to take you through a few slides before we ask some of the colleagues to step in. A few things about Jana, and very important for you all to just soak in a bit of the background. Jana has been a turnaround and a transformation story. When we finished off with demonetization, we obviously had NPAs to handle, which I must say that this team has joined post that moment. One of our first task as a management team was to fix that. So that is when the turnaround happened. Second, the transformation story of how do you convert yourself from a microfinance institution to a well-diversified, secured bank. Some of the numbers here will show you where we are in that journey. We have made substantial progress. Very important focus, from being a single product company, which was largely MFI, we are now a customer-led organization, which means we are doing much more with each customer beyond one product, and you will hear that from the team very often as we go through. The final thing is all about digital and analytics, and you'll hear that from the team as well as from Raman. Now to the numbers on the screen. Very simply, first slide. I really want to show that, see, for a bank like Jana, which is really serving the underserved, growth is not very difficult. It is good growth which matters. And why I say that is our reason to turn secured is to really move towards a good growth agenda where we can have more sustainable and resilient balance sheet. When we began the bank in 2018, it has been now five year and nine months, and where we have reached is roughly about 59.6% of secured business. What is the flavor of the secured business? I will show you very soon. On the liability side, I should start with the growth rate first or the liability side, because first, if you take year on year, our liability business has grown faster than the asset business. We may be the exception in the industry where the last nine months has seen a faster growth on deposits versus assets. By no means is the asset growth slow, and by no means is the liability growth slow. So again, does show that while growth in asset is something that is eminently possible given that we are serving underserved, we also have very strong liability franchise where, if required, we do outpace our asset growth. Our cost of funds, a question people ask, has it gone up? It has gone up in the last nine months by 40 basis points. Having said that, I was looking for the net, and the net interest margin here at the same time has gone up by 20 basis points in the last nine months. So our net interest margin is up 20 basis points. Our cost of funds is up 40 basis points. So while the cost of funds have gone up, we absorb that both in the product mix and because the NPAs have dropped, so obviously interest expense is lower. Asset quality, again, a trend which is very encouraging for us. We are really back to the pre-COVID levels on net NPAs, and of course, PCR at 68%. But I think more on PCR when you hear Raman about what is the true composition of NPA. Given that we are turning secured, the NPA number is very different than what it used to be. Somebody has to press this. While that is going on, listen. Capital, again, this is capital adequacy before the capital raise because this is December numbers, so it crosses 20% comfortably. But more importantly, there is a lot of room in our Tier 2, because our Tier 2 is just about 1%, 1.5% of our total capital composition. National franchise, 781 outlets all over the country. Works very well, and you will see that amongst all small finance banks, we have the least geographic concentration, something that we worked as a design. I must say that when you spread yourself across geographies, it is a bit of hard work with all the travel and all the challenges. But that is all behind us because now we are in 24 states, we are in roughly about 180 cities, and we run a national franchise with great amount of comfort. Now for us, there is less concentration geographically, but also more chance to expand because doing adjunct cities is a very easy concept. On the ratio side, ROA is improving to 1.7. ROE is first time crossed the 20% mark. Net interest margin, as I said earlier, has improved to 7.9 from a 7.7 in March. You look at our P&L matrix, it's INR 348 crore PAT for the first 9 months. It's the highest PAT for the bank, both for the first 9 months as well as for the quarter of December. The happiness here is that our highest ever PAT comes in the quarter following the IPO. Because before the IPO, seeing our results, people thought that your results look very good. But I must tell everyone that our results after the IPO look better than the results before going into the IPO. I think that should give a lot of confidence to people who were looking at the numbers pre-IPO saying, "Hey, they look very nice." But we've got even nicer numbers post that. And that you can see both in ROAs, ROEs, as well as the PAT. Disbursement, we'll talk of as we go along and peep up. But right now, fair to say that all metrics turning secure, liability growing very well, NPA being pretty much at the bottom, a good PCR, good ROA, good ROE. We've got all the metrics running in the right direction. Just a bit about the bank beyond the numbers. National presence, I did mention. I want to point out just a bit here on the unbanked rural centers, which are really 35.9% of the total network. Now, for scheduled commercial banks like Jana, they have to be 25%, like all other scheduled commercial banks. We, when we became a bank, decided that our urban microfinance needs to move to the rural microfinance. And you will hear a lot about Sudhir, how we have made the transition. To do that, we made sure that we opened more unbanked rural centers than required. Now, these breakeven very quickly. That's a positive advantage. The other positive which we ever want to utilize, which we can utilize, is we can open a lot more branches in a Bombay or a Delhi because we obviously are roughly about 11% higher than our required ratio of 25%. So I can open another 200 branches in Bombay or Delhi if I do need to push the liability engine harder. We are not there. We have enough and more room to grow with our current network. But I'm just raising the possibility if it does come to that. The last piece is about how many branches are ours and by BCs. And I think the important thing for banking correspondent is we have done BCs as a way of a natural partnership and a strategic partnership in our MFI business. We find the MFI business is very localized, especially when you go rural. It is obviously a lot more valuable to us. And one of the ways to execute that is to have strong partnership with BC partners. What you see on top, the 10%. So if you take the maths, 60% roughly is secured, 40% is MFI unsecured. Out of 40, 10 is with BCs. BC, as you know, give us service guarantees, are accountable for collections. So our real exposure to unsecured as we speak as of December, where we are accountable for collections and the health of the book is really 30%. So that's the most important piece when you look at what is a BC's role with us, and of course, Sudhir will talk more of it. 12 million customers. As an institution, we have 16 year of history. These 12 million customers are customers we have access, if you wish, and we do use it most times on the bureaus. These customers know the brand, they know the bank, and certainly our customers, if they do want the next need, they will certainly consider Jana as one of them. Active is 5.21 million, just so that you know the number. This was roughly about 4.6 million as of March 2023. We are seeing lot of active take-up of the bank's products in the last nine months from 4.6 million customers to 5.21 million customers. I have already spoken about our geographical presence. This is a bit on the asset products of the bank, which we do have secured, is what we call it, and they are built like this. You can start with December right there, INR 4,419, and that's our Micro LAP. There you see again is the average ticket size. This is the outstanding ticket size on our books, a little under INR 8 lakh. This is the growth of two and a half years. Gross NPA, net NPA, and very important, what is the LTV on the books right now? So this is the LTV on the outstanding asset on the books, which is very comfortable at, or I should say lower 34.2. There is value in the low LTV, and you will hear Rinku Vachha explain that when you have low LTVs, how does the bank work with customers. Next is INR 4,000 crore affordable housing. Again, INR 11.4 lakh is our ticket size. 69.5% is our compounded growth rate in the last two and a half years. These products have a five-year vintage with the bank, so they have been through COVID and the stress test. Gross NPL, net NPLs, and that's LTV. Same as MSME loans. In our case, MSME loans are largely LAP or overdrafts backed by mortgages. Average ticket size at INR 34 lakh. Again, you can see a very comfortable LTVs. Term loan to NBFCs. This is one of the businesses that we do lend to our key competitors who we think are doing brilliant in the market. Something we've used as a balance sheet opportunity whenever we got surplus cash. If one business has de-grown in the last nine months, it is our NBFC business. Because as our natural products are picking up, that business has been detuned. Two-wheeler is on a strong growth path because we only launched it just post-COVID, so it is around January 2021. It's expanding number of cities. For example, when we launch, we are in about 180 cities. To reach 180 cities takes time. We traditionally try and launch 30 cities at a time every six months, and then keep growing it. You will see a lot more growth coming in two-wheelers. So percentage is not a big number here because it's a new start-up business. This is gold loans, and we have seen a degrowth of gold loans post-COVID because a lot of challenges came in COVID. Finally, unsecured loans is our MFI business. We'll talk a lot of detail of MFI because I do think that you all need to see our MFI book in fair amount of detail and how we are building it. That average ticket size is INR 40,000. Again, a net NP and gross NP of 310.7. So that's roughly, the last line is our unsecured advances. All these are classified secured advances. As you can see, our secured means it is property. It is not commercial vehicles, it is not automobiles, it is hardcore property, or of course, cash and gold. That is the real composition of our secured business. We do believe that in a down cycle, the most resilient class of secured will be the ones backed by property. That is why we made a strategic choice in 2018 when we launched the bank that our focus will be on property. Not to mention that every property-related relationship, on a contractual basis, is at least about 10-15 years. So you really get a very long-term relationship with the customer, enough time to do more with the customer, get more operating leverage, get more advantage in terms of more products within him and his family. That has been our classical thinking when we launched the bank, and which is what you can see here. Now, last slide for me before I hand over to Raman is de-risking. We have been working on de-risking all through, and one of the things that you should see here is how our secured advances have grown at a CAGR, and this is, of course, a bit slower during COVID, but then picking up after COVID in a very significant way. Folks who have questions around what to expect in the future, then I can say that, listen, we have grown secured very strongly in the past, right through COVID. Without COVID, it should be fair to assume that is minimum what we would do as a bank. Here is our geographical concentration. I mentioned this earlier. We are the least concentrated small finance bank. We only have 38% in the top three cities. Our top city is roughly about 12-odd%, which is Tamil Nadu. We have a very strong middle order, batting order coming up, and that allows us to grow as and when we wish, because we truly have a very well geographically spread business. We are not in a hurry to grow geographies, but if we do decide to add 10 cities, it is very easy for us. The person who has been really architecturing this de-risking of the bank is Raman, and I would like to invite Raman to take on the next few slides. You can start from there. Can you hear me? Yeah. Okay. Thanks, Ajay. A few things I just wanted to highlight. Can we move to the next slide, please? Yeah. Thanks. Ajay introduced me. Before I joined Jana, which was about six years ago as the founding CRO, I had spent about 30 years in multinational banks and other institutions in multiple geographies. One of the first things we wanted to do was to make sure that on day one, we had all the best practices that we had been exposed to in our previous companies. We wanted to try and make sure that we introduced them in Jana, and that was really our endeavor right from the beginning. A few key messages on this slide that I wanted to cover. Ajay already talked about diversification. As far as this place is concerned, let me just focus on credit risk. Credit risk, we are looking at the underwriting piece, a combination of experienced underwriters, and our team has experience in multinational banks, in private sector banks, in public sector banks, as well as NBFCs. So experienced underwriters as well as how do I make sure that I combine digitization into the whole experience. I think that was one of the first key messages that I wanted to highlight. Digitization, infrastructure, investment in a loan origination system, investment in a data warehouse. That is the first message. Second message is that in terms of our behavior, we are increasingly more and more behaving like a fintech. Let me explain what do I mean by that. Our smaller ticket sizes, that is microfinance loans as well as two-wheeler loans, is entirely a digital journey. As the ticket sizes go up, then we start combining it with experience and judgment. Even there, we are making sure that through APIs we are getting digital inputs on things like bank statement, bank balances, GSTs, so that the underwriter can take an informed decision on the larger ticket cases. That is the second message that I wanted to give. Third message I wanted to give is in terms of increasing levels of sophistication as we have grown. What do I mean by that? We have a scorecard. Other than a scorecard for the unsecured individual loans, we are one of the few institutions. Sorry. We are one of the few institutions who has a scorecard, probably the only institution who has a scorecard for secured lending. For the retail secured lending, both in home loans as well as loan against properties, we have got a scorecard which takes feeds from the credit bureau as well as demographics and other information. And that has been proved to be very discriminatory on our portfolio. In fact, as we speak, we are now ready for the second generation enhancement of the scorecard. I just wanted to highlight that because that's one of the key messages, a key differentiator as far as Jana is concerned. The fourth piece and whatever I've talked about covers the left-hand side. On the right-hand side, I wanted to talk about portfolio analytics. We've invested in leading-edge portfolio analytics. We've got a team of 40 people. We've got data warehouse, and some of the analytics metrics that we use, we use leading-edge flows. We use static pool analysis. We've got hurdle rates for delinquency by cohort for each product. So we've invested a lot in that, and that gives us our early indicators, early warning signals. As we go up in terms of ticket sizes, the early warning signals take feeds from account management discipline. So we do a bureau refresh. We do that every quarter. We look at honors performance. We look at current account churn, and all of this, combined with a personal visit by the account relationship manager, gives us all the early warning signal indicators that we are looking at. So that's broadly what I wanted to cover in terms of our risk management disciplines. A few other pieces. Risk management becomes pretty much the core of everything that we do. All the asset growth is actually based on solid risk management. What I'd like to do is introduce you to Sudhir. Sudhir is second from the right. Sudhir Madhavan joined us as the collection head 4, 5 years ago, and he did a commendable job. He did a stellar job, in fact, in terms of collecting the post-demonetization NPAs, and therefore, the natural sequence for him was actually to go as the business head for the retail financial services, which is what manages the microfinance. Sudhir has, in Jana, 5 years experience. Prior to Jana, he has about 20 years of experience managing business and collections. Over to you, Sudhir. Thank you, Raman. Thank you for the kind words. I think collection is still part of my DNA. It's still my DNA. You're not going to give up business. Just to give a brief background. Sudhir. Sorry. Just to Very close. Yeah. Just to give a brief background, Jana has been a microfinance institution primarily serving the urban and metro microfinance for the last 16 years. We understand the urban space. We have gone through a lot of ups and downs, demonetization, COVID. Post-demonetization, we realized that the behavior pattern of the urban microfinance customers are significantly changing. The attendance in the group meeting started getting reduced. They all wanted customized offerings towards them. That is why we decided we will detune our microfinance portfolio, specifically group loan portfolio. What you see on the individual loan book of INR 5,000 crores are primarily group loan customers who has got upgraded to individual loans. When we do an upgradation from the group loans to individual loans, they have to have a clean repayment track record. We make sure that they pass the credit bureau checks. We make sure that they pass through our scorecards. Overlaying that, even if he has got a good repayment track record, we make sure that one of the credit person goes and physically meets the customer at his residence and checks his repayment ability. Even if the customer has got a very good repayment track record of me, we still have a 20%-25% rejection rate on that. All these customers get upgraded. That is the first structural strategic shift we did, moving away from urban areas to group to individual. Five years back, when we became a bank, we had a regulatory mandate of opening 25% unbanked rural centers. We saw an opportunity there. We used these unbanked rural centers to get our rural penetration done and book in lot of agri-loans through a JLG kind of a model. As this model succeeded, instead of having 25%, we went up to 35%, which we are currently we are at 280 points. To increase our distribution further, what we did was we went to the next level of putting in partners, which is business correspondents, which are highly local in nature and understand the local geographies. They also do this Agri, JLG group loans for us. We started this partnership pre-COVID, and they have survived the COVID NPAs, COVID collection issues, and it is become a highly profitable and a sustainable business model for us. So net, if you look at, we did three things. Point number one, we detuned our microfinance book in the urban areas, upgraded them to individual loans, but with a very strong credit underwriting process. Went deeper into rural areas through our URCs. And third, build a partnership model with business correspondents who are local in nature and building on Agri book there. The other part of the slide. The new microfinance, what we are reimagining, is completely paperless. Our microfinance onboarding is paperless. The customer comes to the branch, doesn't need to have any signatures done. It is all e-sign. So it is become a complete paperless. The last part of it, of the microfinance book is the collections, which is still primarily physical in nature. What we found that individual customers in urban microfinance have graduated, starting paying us through digital means. That is what we see, around 37%-38% are still paying us. And that is what gradually, when the digital penetration gets into the microfinance, the third expensive piece of getting the repayments back, which was physical in nature through digital means, it actually helped me to get my cost income reduced. The next slide. Yep. Thank you. Thank you, Ajay. This is the way our book is being divided, if you look at it. L1 represents the first time who borrows from Jana. L2 is the second-time borrower. L3 is third time, and L4, fourth time. The individual book, which is primarily 100% existing borrowers, contribute almost 53% of the book. And those are existing customers who have been with me at least passed through 2 life cycles with us. What you look as the first-time borrowers are primarily what we book through URCs and what we book through business correspondents. So overall portfolio of INR 9,500 crores is highly diversified and much more stable in their place. To go ahead, 5 years back, when we became a bank, we actually did a bureau run all of our customers. We found a lot of our customers got loans with other banks, like two-wheeler or Micro LAP or housing loans, gold loans with others. So when we became a bank, it gave us an opportunity to offer a full suit of products for the customer. And the customer was actually wanted to have a one-stop solution instead of going with 3 or 4 different places. I got a base of 4 million active customers, almost 8 million close loan-based customers who had a past relationship with Jana. We are progressively migrating these customers from an unsecured base to secured base. Started the journey pre-COVID, but post-COVID, we had COVID issues, then we had collection issues. Now, the last 2 quarters, the collection issues got stabilized. So now rebuilding the focus back on how do we graduate good customers from me, from unsecured to secured, and how do we offer them a full suit of products of housing, two-wheeler, gold, savings account? Further, let me introduce Rinku. Rinku is the person who sits on the left. He joined the bank 6 years back. He is the one who built our affordable housing and the micro-housing book. We both have been working together to build. Sorry. We both have been working together to build customized solution to how to upgrade these microfinance customers. We both believe and strongly believe that it is just a tip of an iceberg. We still have a long way to go. So over to you now, Rinku. Yeah. Thank you, Sudhir. A very good evening to all of you. Now, it has been 5 and a half years since we started our affordable housing business. You would be seeing something christened as Home360 on the slide. Now, let me just briefly explain what this 360 strategy is all about. Over a period of time, we consciously moved from just selling home loans to a Home360 strategy. Now, if you look at the affordable housing landscape, competition landscape, who are our competitors? It would typically be the housing finance companies. And most of the housing finance companies who specialize in lending to the formal, informal, and semi-formal segments. Now, these companies typically are a single product companies. And we, right from the outset, knew that we have a distinct advantage over the competition because we have a suite of products, be it on the asset sides or liability sides or insurance for that matter. I must say, when we started, we started on the similar lines as these housing finance companies. But over a period of time, this advantage had to be leveraged upon somehow. So, what we did is basically once we got a foothold in this affordable housing lending, we said, "No, let's not just sell home loans. We will sell Home360 to our customers." So this thought process and conviction led us to come up with this Home360 strategy. Now, under Home360 strategy, housing loan acts as an anchor product. Now, when I say anchor product, if you see any individual in the country, or for that matter, globally also, everybody has an aspiration to own a property or a home, right? So, all his financial needs through the various life stages always revolve around the housing loans. So we thought, why not align with the customer's balance sheet, our strategy, in sync with the customer. And at the same time, use housing loan as an enabler to sell multiple product offerings to the customer. So that's how Home360 came into being. Now, how does Home360 help the customer? He doesn't have to go to the multiple institutions for whatever financial needs he would have. Here we are explaining to the customer, Jana Bank is a one-stop shop for you. Right? And you can actually bring your bank home. And that precisely is what the tagline is for the Home360. Now, how does it help our customer? A, like I said, he doesn't have to go to the various institutions. And B, ease of lending. Every time you need some financial product, you don't have to go through the rigor of repeated onboarding exercise. And we know the customer. We take a faster and quicker decision. And I must say that the digital transformation that bank has gone through, and the customer scorecard, which Raman has built, has really made this transition from housing loans to Home360 very fast, faster and better, I must say. And, if I can say that, Home360 is one of the differentiators in housing industry for Jana Bank. The other big differentiator would be our customer scorecard. What this scorecard does is basically, when you talk about semi-formal or informal segment customer assessment, there's a lot of human element involved. Now, this customized scorecard has taken that human bias out of the picture. The initial elimination happens through this called customer scorecard. So it helps me take faster and better decision. And now our processes have become so robust that we are capable of delivering a sanction within a day's time. Today morning, I sign an application, which is again digital. It's absolutely paperless. I take an application from the customer. By evening, I could have sanctioned the case. And I will follow each and every step for due diligence, whatever is required to underwrite that customer. I log in the file, it goes to the underwriter digitally, wherever in the proximity of the customer. He will do the personal discussion. He will follow the complete rigor, then it will go to my centralized unit, wherever the sanction happens. By evening, sanction will be given to the customer. That is how fast and robust our system is. This customer scorecard, which Raman has created, has really given us a very strong edge over the competition. On this slide, you would be seeing two-wheeler loans at 100% LTV. Sounds very aggressive, right? If you go to any institution, they may give you what, 85% or even if a standalone customer comes to me, 85% LTV, or 90% LTV for that matter, if you are an affluent customer. I am giving 100% LTV to the two-wheeler customer. How am I able to do that? You heard Ajay say at the onset, our LTVs on property backed loans, be it housing loan or Micro LAP, are in the range of 35%-45%. I have that room with me. I am just giving 15% additional LTV on two-wheeler to the customer, which is very normal. At the same time, I am cross-linking that loan to the parent loan. I am covered. Imagine the kind of wow factor it creates for the customer. If you pay 0.5% fees, you will get a helmet more expensive than that. At 0.5, for the price which you would have bought a helmet, you can take a two-wheeler home. That is the kind of pitch, and the acceptability has been tremendous as far as this product is concerned. Likewise, you can see several products mentioned here under Home360, be it health insurance, current account, asset link current accounts or savings accounts, gold loans. Everything has a relevance. All these products complement each other. On the left-hand side, you will see this pre-approved loan. What is this pre-approved loan? Again, that LTV cushion comes into play. I offer pre-approved top-up loans up to INR 5 lakh to the customer who exhibited good repayment behavior with us, good capacity with us on us and off us. There is thorough due diligence happening around it, which is again analytics team led by Raman, which helps us do that. So we are able to decide very quickly whom to give this pre-approved top-up loan and whom to not. How it helps the customer is basically this pre-approved top-up loan, he can use as a business loan, or he may want to construct one extra room. He would use that as a home improvement loan. The customer from this segment, if he goes out to another institution to borrow a loan of INR 3 lakh or INR 5 lakh, he would get it for rate of interest less than 30%. If you look at local money lenders, who are still very prominent in Tier 2 and Tier 3 towns, they would charge you to the tune of 45%-50% also. We have seen that. I am here offering him pre-approved top-up loan proactively because he has shown good character on my books, at, let us say, 18% or 19%. That is a big benefit for him. How does it help me? See, for affordable housing industry, again, there are two prominent risks. One is the fraud risk, which again, like I said, Raman's efforts have helped us to ring-fence our business against the frauds. Second is the BT out risk. The moment customer creates a vintage of, let's say, one year or 18 months, there will be other lenders coming in to picture and offering him extra top up. Then there is always this lurking risk of customer moving out of the bank. Now, when I give him the pre-approved top-up loan, the bond becomes even stronger. The propensity of that customer to stick with the bank goes much higher. Can we just move to the next slide? Okay. Now the proof of the pudding is in the eating. Sorry about that. You can see the numbers. Now, what does the first chart tell us? 3.5 average relationships with one customer. So every housing loan customer or Micro LAP customer, which are on board as we speak, post Home360 initiative, has minimum of 3.5 relationships with the bank. Look at CASA penetration, 98%. So this means 98% of customers who take a home loan from me open a current account or a savings account with me. It is not just a dummy account. Look at the last chart at the bottom right. Average monthly balances are to the tune of INR 21,000, which is quite significant. When you multiply this with the average CASA penetration we have, you can do the math. The kind of CASA objective of the bank, how housing loan customer helps us fulfill that. Health insurance. Penetration is as high as 91%. This health insurance is not something which is bundled with the loan. It is a tailor-made product for our customers, customer segments specifically, to shield them from unforeseen health-related issues within the family. Let's say, for example, he would have to pay a premium of INR 6,500 and he would be covered for two years with a cover of INR 50,000 or INR 60,000. So there are various aspects to it. Likewise, if you see pre-approved top-up program, which I just spoke about, 13.3% of our customers are already having this pre-approved top-up program, and book is behaving excellent. Absolute top-notch book. Two-wheeler, like Ajay mentioned, is still in an infancy stage, and then it is on a growth path, and I am sure we will have a similar kind of acceptance as far as two-wheeler is also concerned. Now, for me to grow my housing business, there is one man I look up to within the bank who is sitting to my right, Mr. Srinivas Murthy. He gets more funding, cost-effective funding, I grow better. Srinivas has been with the bank for the past three years, and he has really given a positive spin to our CASA initiative. Over to you, Srini. Thank you. Thank you, Rinku. My job is very clear. I have to keep my CFO happy by making sure that I get low-cost funds. I have to make Rinku happy so that every customer that he gets for the bank doesn't go back. He gets his money, and I have to keep Sudhir happy that he can continue his business. That's my job. I have to keep him happy. I'm very happy to hear that. That's exactly what we are trying to do. If you see here, for the last two years, when the entire system was struggling with liquidity, we've been able to grow the book at 28% CAGR, 27.8. For the current year-over-year, we have grown the book by about 36%, which clearly tells us that there is leverage that we have, that we've built with the help of the branches that Ajay talked about, the cross-sell that Rinku does, and all of this has led to an incremental LDR of 85%. Ajay talked about it, that for the current year, our deposit book has grown more as compared to the assets. This has also resulted into lowering of the overall LDR from 108.5 to 104.5 for the current year. Now, I said I have to keep the man sitting in the middle, our CFO, happy, which is exactly what we are trying to do with the help of CASA and retail deposits. Our CASA and retail deposits combined are at 68% thereabouts. We have been also able to keep our cost at bay. For the current quarter, for quarter between September to December, our cost of funds is stable at 7.6%. For the two-year period, we have brought down the cost from 8.1% to 7.6%. That's exactly what I said when I begin the discussion that that's, I think, my core job. Ajay talked about the vast geographical network that the bank has. Incidentally, we are the most diversified bank in the SFB space as far as branch network is concerned. Now, that gives us leverage to grow further. We started with 39% in top 3 states, Maharashtra, Karnataka, and Tamil Nadu, and I'm happy to tell you that we brought it down to 30%. That brings our reliance down from these states, and we've been able to grow new markets. We've been able to grow NCR, which is a large deposit market. We've been able to grow UP, which is emerging as a large deposit market. We've also grown West Bengal. The other states have also started growing. Clearly, we are able to now leverage our network. We are able to make sure that we get deposits not just from 3, 4 states, but across the country, across our branches. I would call out Next slide, Ajay. I would call out 4 key enablers for our deposits, and one of them is the optimization of our branch network. The other is, of course, the productivity initiatives that we've taken. The third is launching of new products and segments for the bank. Fourth, of course, is the digital way of life in Jana. This largely talks about how we are leveraging our branches. If you leave aside the URCs, which are 218 in number, out of 781 branches, we have 501 here, and they are plotted against their vintage. As the vintage of the branches grow, we are getting exponential improvement in the CASA balances, exponential improvement in the deposit Book for the bank. For example, from 3 to 4 years to 4 years, there is an exponential rise in the deposits. When we shift branches, we have legacy branches which were engaged in assets largely. We relocate them to a deposit-centric market, a high street branch where we can also leverage the deposit opportunity in that market. That gives us 2, 3 advantages. One is that I'm not incurring a large amount of cost vis-à-vis opening an entirely new branch. I'm just moving the infra from X location to Y. Probably, the rental costs are going up, probably some of the other elements of cost are going up, but I'm able to move the largely asset-centric branch to a deposit market, and I'm able to leverage the deposit opportunity in that market. We've done that in the last year, and I'm happy to share with you that we are getting excellent results. Similarly, we have opened new branches as well, but large focus is on moving these legacy branches to new deposit-centric markets. We have a runway of about 215 branches that we've identified, which will be moved over a period of next few years. Why I'm saying that is because we also have to keep cost at bay and make sure that we are leveraging the branches. All these branches will move under one year bucket, and they'll start performing as the vintage is gained. I talked about productivity. Jana has one of the highest business per employee as far as deposits are concerned. We are at in excess of INR 10 crores. If you see our 4-year-plus branches are at INR 13.64 crores. As the vintage grows, the per-employee business also grows, signifying that we are able to leverage the catchment opportunities on the deposit business side and make sure that our people posted in those branches are producing more and more as compared to the competition in our catchment. We are doing another thing. We are expanding the segment of business that we cater to. Apart from TASC and RI, we are launching a new initiative, which is probably one of the few SFBs which have done this. We are reaching out to mass affluent opportunity in the country. We are calling it Exclusive and Premier. This is aimed at acquiring new customers from these segments and also making sure that our existing customers who get better services or superior services from their existing bankers, they continue to bank with us. We ring-fence them. We also move their family business to us, and therefore we have hired 121 RMs who will cater to these sort of customers, both new and existing. We are seeing amazing results out of this initiative, and I am sure we will continue to do well in this segment. We have also added 78 new relationship managers to make sure that we get current account business from current account dominant markets. There is a huge, large opportunity there that we believe in. A combination of productivity improvement, optimized branches, and the new product initiatives, I think we are very well poised as far as our deposit journey is concerned. The last element of our deposit effort, Ajay, please, next slide, please, is digital, which is in a way the DNA of Jana, and Ajay talked about it, and we have really invested extremely well in our digital infra. I am happy to tell you that 99% of our onboarding happens digitally. If I walk into a customer today, and if I want to open her account, I am able to do that in less than 3 hours, and the whole journey happens digitally. I do not have to move paper, and that brings cost efficiency, also turnaround time. I am able to give the customer the account number and the ability to transact with me on the spot in 3 hours, if everything being in place as far as documentation is concerned. 98% of our transactions happen online, and that is really amazing. 92% of our loan origination happens digitally. Nearly 90% of our people have mobility solution, which they use to onboard new customers. That is as far as the digital infra of the bank is concerned. We are seeing amazing results around this. Our mobile app, I was talking to a few gentlemen there, and thank you for your appreciation of our mobile app. We are either at par with the large banks or better as far as our mobile app is concerned. I am a user myself, apart from being an employee. I am extremely happy, and I am sure if you try, you will realize this. We have an App Store rating of 4.6 to 4.7, which is probably one of the highest in the banking space. We are growing our digital transactions extremely well. We are registering more mobile customers every day. We have three enablers as far as the customers transactions are concerned. Two are physical and one is digital. When a customer is onboarded, we give a checkbook, a debit card, and the digital enabler is mobile app because today's times you cannot do anything without a digital app. That is what is resulting into multifold improvement in our UPI and ACH. I would like to call upon another initiative that we have launched and which is really successful. This is around merchant QR, and there is a lot of talk around this in the recent times. We all know why. The merchant QR is a huge success for us. We have installed excess of 12,000 merchant QRs. 79% of them are active, and we are witnessing fivefold improvement from the balances of these customers. Now, how is this possible is once the customer is onboarded, the next morning customer can download the QR code to make sure that the payments are made through the QR code into her account. This is revolutionary because the moment the customer has QR code and the customer can start using the bank account, this really helps us to build CASA balances in the account. I talked about physical enabler of debit card. We have seen 27% improvement in our debit card penetration. On the stock, we are at 65% penetration on debit card. Incrementally, we are doing 75% of debit card in the current financial year. On a net basis, I believe with the help of these four enablers that I just talked about, we have a huge runway of opportunities available on the deposit side, and I am very sure that we will continue to grow at the pace that we really want to be able to meet the requirement of every other gentleman on this dais. Thank you so much. With that, I would like to introduce the youngest colleague, and our CFO, a homegrown talent, and a very competent CFO, one of my favorites, Abhilash. Over to you, Abhilash. Thank you. Thank you, Srini, for the introduction. Key message. I would like to reiterate, Ajay mentioned about the ROE, ROA, also mentioned about the GNPA in the initial slide itself. This is basically what we have put in the efforts to move towards secured business, which gives us the improved yields. Also, reduction in the NPAs, also has led to the reduction in the interest reversals, has led to our improvement in the NIMs and the yield on advances. We have also seen the ROE, which is highest ever, historically, which has crossed 20% for the YTD nine months, and ROA at 1.7%. The cost income ratio seems. We were not fully invested during last year. We are invested. Srini mentioned about various initiatives which he has taken. There is a slight up in the cost income ratio, but that is more real, is what I can say. If I look at the revenues and also the operating income, which has grown approximately 90%, which is 90% of our FY 2023 numbers, actually. We have achieved 90% in the first 9 months itself. That's the other thing which I wanted to highlight in this slide. Next slide. Moving on. I wanted to cover two key messages. PAT has grown 99%, highest ever PAT quarterly as well as for YTD. This is after doing the listing, so we just concluded the listing 2 weeks ago. After doing the listing, we have achieved the highest ever PAT quarterly as well as the YTD PAT. That's the other message which I wanted to highlight. This is just based on a trend line. Also, one other important element is we have reached to the pre-COVID levels in terms of GNPA and NNPA. The PCR at 68%, which is very high. Also, NNPA and GNPA of both secured and unsecured products is around 0.7%. I would like to give it back to Raman, who will talk more about the GNPA and NNPA at a product level. Thanks, Abhilash. Yeah. Very quickly, Abhilash talked about the steady reduction of NPAs and a steady increase in PCR. Ajay talked about the split between secured, unsecured, and the BC portfolio. On the portfolio level, he said 60/30/10. As far as secured is concerned, your biggest NNPA of INR 88 crores out of the INR 156 crores is in secured. We've got an LTV of 40%. Everything, this is entirely a property-backed assets. We've got enough experience over the last few months, years, in terms of realization, regularization. Given our experiences in terms of low LGD, I don't expect any incremental losses coming from this portfolio. On the unsecured book, our net NPA is INR 59 crores. There is a PCR of 80%, and recoveries are pretty robust. On the BC portfolio, we have the service guarantee, which Ajay alluded to earlier. That is really the story on the GNPA and NNPA, where both have pretty much reverted to pre-COVID levels. The restructured book, post-COVID, based on the RBI schemes, we had offered a lot of restructure, but right now only 0.5% of the book is lying in standard restructured assets. These are really the two These are mostly secured. These are mostly secured. These are really the two messages that I wanted to highlight on this slide. The next slide is about the credit cost. The credit cost, I just wanted to highlight a couple of observations. There is a reported credit cost in the credit cost line, and there is any asset where the asset has been written off, any recovery that I get from that goes into the other income line. What we have talked about on the first line is credit cost, and the second line is what are the recoveries which are reflected in other income, and therefore, the net credit cost is what we have expressed as a percentage of the AUM. The key messages here are that after COVID, in March 2022, our net credit cost peaked at 3.4%, which came down to 2.5% in FY 2023. For the nine months annualized December 2023, it has further improved to 2.3%. These are really the few key messages that I wanted to highlight on this slide. After that, I just wanted to hand you back to Ajay, to bring up the last few slides. Thank you, Raman. As this is the board, your left-hand side is the independents led by Dr. Khuntia. Dr. Khuntia used to be the IRDAI Chairman. On the right-hand side, you have all the non-independents led by me. Raman joined the board in January as a second ED. Ramesh, our founder, and Rahul was the TPG nominee on the board. So that's a good, well-rounded board, with strong independence. You will see that you also have Mr. Vijaykumar, which is the last box in the corner. Mr. Vijaykumar has been a lifer with RBI. Retired from RBI and he joined the board. He retired as an Executive Director of RBI. So a good board, very professional board, very engaging board. I'm pacing up a bit because I do realize that I do want a lot of time with Q&As, and we are a bit first analyst meet, so we have probably spoken a bit too much. Again, no particular order, but I have done this by age. So Abhilash, the youngest, so that is a 35 to 45-year-old column. Sudhir leads the second column, which is 45 to 55, and the last column is 55 plus. Raman and I are not on this page because we don't want to reveal our age, but roughly tells you that we've got a bank with a management team, which is more than 24 years of experience, but also has a very good mix of folks who are coming up the curve as well as folks who've been there and done that. Our bias originally was to have a lot of people who've been there and done that, but incrementally we are now, of course, going for the future talent as we are building up the bank. On this page, I think we have covered everything that we should have covered, which is 16 years as an institution, and of course, for us, the very important milestone, which is why we are all together, has been our IPO, which was last month. Our strength, I'm just reiterating what we have been saying all along, but I would really break out a few things, which is the last one first, which is the proven execution ability here. We have done our turnaround and transformation organically, and we have done it through one of the most difficult periods. We started with the IL&FS, went into COVID, and yet we are here sitting with a bank which is transformed. I must tell you, during the journey, enough times to go back to the old ways. Let's do more unsecured at 24%. We chose to stay where we are because we did know that we were on the right path, and we were where we could be core in our strategy of becoming a customer-level franchise. I think what you see here is a management team, as well with full support from the board, who really execute. Digitize, customer organization, pan-India. You heard Srini. Srini has done a wonderful job of growing deposits. He is bang on saying, one way to grow deposits too, put another INR 20 crore in advertising. But then you folks will not be happy with cost income. How do you grow deposits in a very measured way, just right for purpose? I think you need somebody with that level of experience. Srini has done 29 years in banking, so he has that background in what can be done, what should not be done. Strategies, folks, listen, it will going to be more of the same. We are serving middle of India. It is a very large underserved market. Our model is working. We just want to stay core to the model. There is huge room for us to grow. We are not in a hurry to launch commercial vehicles or anything else. We are very core to where we are, and we will continue on the same path with, of course, making sure we are doing all the right things, whether it is going more rural in microfinance, improving risk profile, more retail deposits, more customer relationship, more digitization. It is about just executing more because truly, the size of the pie that we are addressing is very large and clearly underserved. CSR, listen, one thing I did want to talk about CSR is all our CSRs are employee-led. These are schools, institutions which need help near our branches, where our staff personally executes, along with the institutions, the CSR events. I think it gives our staff a lot of happiness because ultimately we are helping the communities, but also give us true bonding with the communities that we are in. We have been recognized, and I did want to put a few awards that we got. You see for our data quality, we have got the best fintech only last week, which Gopal, our treasurer, went to receive, and we have also got the National Best Employer award. These are the three awards we got, but see the diversity of awards that the bank has received. It also tells you things that we have not covered here, but have not missed out. These are critical when it comes to data quality in a digital life cycle or when you have 20,000 people getting the best employer. With that, I would like to stop here, and I will open the floor for questions, and thank you so much. Please, somebody has got a mic? It is okay. I can repeat your question. Thank you, sir. This is Manish Ostwal from Nirmal Bang Securities. My question on your Home360 strategy, in your comments, you said that while taking the two-wheeler loan, you will be covering the risk through home. I could not understand because if somebody takes a two-wheeler loan from Jana, why would home collateral come with that auto loan or two-wheeler loan, basically? See, we basically do the cross-collateralization. That whole housing loan is there with me. If you look at the industry average, the housing loan runs for the average life of 7.5 to 8 years. Yeah. If all goes well, it can run up to 15 years, 20 years also. When a customer takes a two-wheeler loan and I cross-collateralize, I am saying, if he wants to take his property papers back, at that point in time, he has to foreclose a two-wheeler loan also. Okay. It is not like I foreclose my property loan, take my property papers back, and two-wheeler lies with me at 100% LTV. That is where the cross-collateralization comes into picture. Am I correct, you have only those two-wheeler customers who have a home loan with you? Yes. Sorry. I just want to add to that. We do two-wheeler as a business, and also home loan customers or Micro LAP customer or MSME customers will also be offered two-wheeler loans. The difference is if you are a home loan customer, you will get 100% LTV, and you will also get a fee off because you are my existing customer. Cross-collateralization, anyway, under bankers generally and all your assets are cross-collateralized. That is a regular law. But in this case, because we are specifically making him an offer of 100% LTV and giving a price off, making sure he understands that, listen, if you do want to close your home loan, your two-wheeler is outstanding, that is not good enough. Similarly, very important, when he said 13% of our home loan and affordable housing customers have business or personal outstanding, they are also cross-collateralized. I must tell you from experience, when we call up the customer and say, "You have got a pre-approved loan waiting for you," normally they are very delighted because the informal segment does not really get a pre-approve offer where the bank is calling them, here it is. Right? Look at our side. I am getting a home loan or a business or a personal loan at a 17%-19% range cross-collateral with the home. The customer is able to save 7%-10%. He is getting a much larger amount, plus his tenures are 36-60 months. From his perspective, it is low cash flow, low interest rate, and pre-approved at home, delivered in one day, which is what digitization has done. That wow factor will make sure that he will never leave us and certainly become our ambassador to other customers, both in his office or his neighbors. That's the basic idea. I see. The second question on your overall increasing share of secured mix in the business. It will have some impact on the margins, but obviously, credit cost will be lower for those segments. On an overall basis, how do you see the ROA impact because of increasing share of the business? That's a fair question. Before I let Abhilash give you the numbers, let me tell you the big picture first. From zero we have reached 60. The big portion of turning secured is already over, already in my margins. The second thing in my margin is having a BC book of 10%, because obviously they take more revenue from us. Two things are pre-baked in my 7.9% NIM. Now, what is left is from 60 to 80 or 85 or 75 or 90 as it may be. Now left is a tail, which is not the big piece. And you rightly mentioned, it will reduce cost because secured does end up being a low-cost income business. And second, it'll also reduce GNPA, NNPA. Numbers our CFO will share. The NIMs, currently which is at 7.9%, will be towards 7.8 or 7.7 over the next two years. There will be a 20 basis point impact. However, the CASA, which is currently at a 20%, 21% sort of a CASA ratio, that will also go up. So that will give the benefit on cost of fund side. Overall basis, the NIM will, when we grow the secured side of business, also the CASA will improve, which will offset the cost, basically. Which will offset the impact. Lastly, on your deposit slide, which is you mentioned the vintage of the branches. Can you go through that slide? It is not mentioned whether it is numbers in crores or lakhs. Yeah. I realize that. I will just explain that. I was confused. Yeah, I will explain that. The first picture there, the extreme left, number of branches is number of branches. Yeah. Okay. That number totals to 501, and that is the vintage. These are in crores. These are deposit books in crores, CASA in crores, average deposit in crores. In the business per employee, the graph is business per employee, and the numbers given on the top of it is the number of employees engaged in liabilities. You said in your talk it is INR 13.64 crores. Yeah. The last one, four years and above, it's INR 13.64 crores. That is in lakhs. That is in lakhs. I was just- 1,364 lakhs is INR 13.64 crores. Because- Overall, it is INR 10 crores. Like I said, overall INR 10 crores per employee. Just to add, the key piece here is this one. There are 215 combo branches he has to relocate. What basically it shows is there is enough dry powder as he relocates these branches, the liability growth is very obvious to come because I do think one of the questions you all will have is, as you grow the asset book, how sustainable is your liability growth? Both the combination of branches, RMs, segment launches, marketing, and digital, we are pretty ready. Nine months, of course, you have seen the results of nine-month deposit growth, but we are also sharing with you what you should expect as you go on because we are fairly comfortable and we see our deposit growth. That was the idea. One question on the philosophical level. You said, the growth is not difficult in the current environment, but the good growth is what matters. So let's build a scenario where the deposit mobilization getting difficult for the smaller banks. Then will you press the, will you grow or grow slower, or you will still grow the balance sheet through other ways of financing instead of retail core granular deposits? Right. So two, three things. One is, while we will spend next time when we meet, more time, we also have multiple de-risking strategies. So for example, we do have a DA book where we are selling down assets. Roughly about INR 1,400 odd crores, we have sold down. So if we do feel that we are growing a bit faster than what we had planned, then we certainly have a plan to sell down our assets. That's number one. See, but the philosophical, since you said it's philosophy, if I have a choice to do 22% versus 20%, and I feel 20% is more comfortable from a risk perspective, I'll do 20%. When I said that, what I did mean is we will not compromise risk quality for the sake of growth. I'd rather grow less, but I want to grow well. My bias, again, of turning secured, being a customer at balance sheet is to give sustainability and reliability. To me, having a very consistent quarter on quarter, year on year growth is the right answer, but really not trying to jump up performance. Even you see CASA. Can I push it harder? I can, but I do know cost income will take a blip. We have seen people have higher CASA, it falls down again. We don't want to go that mode. Let's go steady. There's enough and more room in the business, and touch wood, folks, you know this, economy is doing very well. So there's enough and more tailwind we have. So let's be as steady as we can. Sure, sir. Happy team delivered to the happiness to the investor also. Thank you. Thank you. Pass the mic around. Two points. I see. Hi, Ajay and team. Congratulations in the first place for turning around, as you said, building organically the secured book, right? This is Kunal Iyer from Carnelian. I have this question on seasoning of the book. There has been a growth in the secured piece, which has come in the last three, four years. You did mention that LTVs are pretty comfortable. So loss given default chances, which is obviously the case with lot of housing finance bank is not there. But still the large part of the growth has happened in the last three, four years. So what is your take on seasoning of the book and specifically the MSME book? That is the first question. The second question is how do we see the eventually ROE settling down, once the cost to income ratio kind of settles down a bit because a lot of branches are yet not seasoned, right? So how should one see that? And third thing also linked to that is, we have a long runway to go on the CASA piece, which I think is. Also in relation to that, how do you see the cost to income playing out? Okay. Let me take one by one. The first one is a very good question, and we got that from the rating agencies also. I will just make a few very high-level points, and Raman, you can add in. First is we have a scorecard, which was implemented more than two years back, and we are coming with the next version. Now, what does a scorecard do? This is a very specific scorecard for the product, which means bureau is yes, more than 680 or 700 you can choose. The moment you put it through your scorecard, and at least 10%-20% of it says no. Because a bureau is very generic. One scorecard is good for personal loan, the same scorecard is good for home loans. But once you narrow it down, you get much sharper results, which is what Raman has created, and we are now going to version 2.0 now because now we have so much more history. So that is one. Two, we took a vintage of because 2018 is when we began our business. So we said 2018, 2019, 2020, what did we book? How much of that has run off, either pre-closed or they have repaid. 70% of the first 2 years asset booking, both in MSME and in MHL, which is micro-housing, affordable housing, has actually run off. So it tells you 2 things. If such a large book has run off, that means you have seen the performance that you should have seen. Typically, if it takes longer to run off, which happens when you have a 15-year loan, then you do not know. But we have already seen from practical, and we have done the data for our rating agency saying what is a runoff based on year of booking. The second very important thing which comes out from that is the affordable housing actuarial behavior is equal to prime mortgages. We are clearly seeing a 7, 8 year trend line on an average basis for housing. So I think comfort level on seasoning of secured book is good. We did see a small blip in MSME post ECLGS bandit came off, and that is already visible in our numbers. If you see our gross NPA of MSME is slightly higher. So that is already taken in. But remember, our MSME is fully secured by collateral, which is property. So while it may have a slightly high gross NPA, like Raman said, LGD charge probability is very low. ROE settling down. Listen, for us, consistent ROE over a period of few years is more important. So I think a 15%-20% range is good for us. Now, where will it finally end? I think it is both a function of how we operate and how the environment operates, so I would rather be in the 15%-20% range. Bias would not be to kind of make it as high as possible because I would rather come to you and be a very consistent player rather than be a high-end and low player. So that is how we typically are thinking. See, CASA, these 215 branches which you see, these branches exist. They are just not in the right spot. So when you move the spot, you will have higher rental, but they will not be new rental. So let us say I am paying INR 80,000 to the rental. It will go to INR 120,000, maybe INR 150,000. But I already have a network. I have already invested in the branch infra. That will get transferred. So our incremental branch growth is going to be more of a marginal cost and not a new cost. That is one. Two, as the book size grows, we will be able to absorb. So my bias really is I do not see a significant need to get worried on cost. We think cost in the mid-50s is more like it, and as you grow the secured book, that is most natural to see. See, secured book does not run off very fast. Two, it does not have a collections cost. So if you just take 2 parameters, you should normally expect, and if you take productivity per employee, that is much higher in secured. So all things put together, I think cost will be on the more improving side in my head, and that is what our plan shows. Sorry, I know you want to say something, but before that, Raman, did I miss something? No. The only other point I would add, Ajay, is that we have our static pool analysis. Seasoning is one thing, but I actually get a good sense of early delinquencies at four months after booking, five months after booking. Barring any event shocks, that will give you a predictability of what that cohort is likely to be. Go ahead. Anything I missed on the- Cost income ROE or cost income? Cost income. It is okay. Okay, sorry. Please. I think that is pretty helpful. Just one thing more. Some data point as to how has the same customer ticket size moved, basically, because we are doing a lot of cross-selling. As you said, that 360 degree. So some data on that also probably can help as to how the same customer is moving along with the Jana journey. I do not have the data, but I will tell you principle. Your 80% LTV or 85% LTV, you will not get an offer from us for a business loan. You are at 60% to 65%, you will get the business loan offer. That is rule number one, which is based on your loan-to-value and based on your ability to serve an EMI. I will either make you offer or not make you an offer. If you are high LTV, no chance. Over-leveraged on bureau, no chance. If I think your cash flow is not enough to serve another loan, I will not give it to you. The point is we can pick and choose our customers where we think they have good credit, but they have a need, and I am available. Customers where we think they are over-leveraged, where we think they are not on solid footing, even their business, I will not make the move. I will hold back. Rest assured that we are there for customers, but we are also making sure, like I said, it has to be good growth. It is not growth for the sake of growing. I do not have the exact data, but the list of who gets what is released by credit. Correct. The people on the ground will say, "No." Saying, "Yes, sir, your statistical model is good, but every time this customer comes, we have a problem, so we do not want to give the money." We actually have a pushback. Even in Sudhir's case, in MFI, we release a list of a group loan customer who can graduate to an IL. We get pushback from the branching, "Sir, he is good on performance, but he always makes us wait. He always asks us to come the next day before he pays. I think we should not give more money." The branch then pushes back on anything that is pre-approved by us, which is a good way I think a model works. Because a branch knows whether it is housing or it is microfinance, if we have delinquency, the first person who goes to collect is a salesperson. There is nobody in the bank who does not collect. Sorry. Very interesting. Thanks. Wishing you all the best. Okay, I really want to go here to the gentleman in the. Please. Thank you. Thank you for taking my question. This is Ankit Pande from Quant Mutual Fund, and thank you to all, and very good evening. I think a couple of questions. One is if you could throw some numbers around your PSL book. Priority sector loans, how much qualifies, et cetera. Second is a more conceptual question, I suppose, where the RBI DG recently made comments saying that microfinance rates are too high and things of that sort. I suppose that's a very subjective element also, but also fair in many ways. 20%, 15% borrowing rates for those kinds of people, it's tough to take. So conceptually, how do you counter that risk, or how do you even put counterarguments to them? If you say that risk is too high, therefore my interest rates are high. But how does that argument roll beyond that? They can probably say, "Look, I will securitize X percentage of it," and you have got to reduce the interest rates by that percentage. How do you conceptually, as investors also, how should we think about it? Your comments, please. Okay. Yes, sir. On the PSL book, most of our assets qualify for PSL. It is around 90% of our book qualifies for PSL. Okay. We also in our P&L, you would have seen there is income which based on sale of PSL, we earn revenue out of it. That is the background on PSL. How much was that last year? We have done around 45, 48 crores of revenue in PSL, which we continue to earn every year because most of our assets qualify. Our requirement is 75%. We are at 90, 91% of our assets qualify as PSL. On the issue on interest rates. Listen, there are a couple of facts, which is we have moved to a de-regulated environment on interest rates, and that has been a conscious decision made by the industry as well as, of course, with the blessing from the regulator. Two, the industry is very competitive. In a competition, price discovery is on market forces, which is happening as we speak. Number three, very important is people are looking at through-the-cycle losses, and we are talking of ECL in banking. It is not difficult for anybody to imagine that all our numbers are public, and certainly known to the regulator for sure, and so also NBFCs. They will have a look at what is the through-the-cycle losses, so what looks like a reasonable cushion to keep. Our understanding as we speak is, listen, the decisions have been made. It continues on that path. Having said that, look, what are we looking for? Rather, I give you a motorcycle loan of 50,000 or 70,000 rather than give you an unsecured loan. Why am I happy with that? I know the end use is perfect. You take a motorcycle, you will use it to bring your goods home, or you will take it to sell your goods, you will drop your kids to school. It becomes a productive asset at home, both for business as well as personal life. Our bias really is to turn to equally good ranges of yields, but more defined end use. If you then take a Micro LAP, it is giving very good yields. Our Micro LAP average yield on the book is about 16.5%. Our bias is moving towards there. MFI industry, I think we should just wait, but to our minds, I think we are in a very competitive market. I do know that MFIN industry, MFIN body itself, has roughly about 90 registered players, and I can tell you that it is a full house there. Market forces will determine, and I think that is where we are right now. Your argument is basically that it's a competitive market. Whatever holds true, holds true. But don't you think it makes us all nervous, and the RBI makes comments like that? This is obviously well quoted and well understood, and they're obviously aware of the ground realities. It's not as if something new. How at all should we conceptually think about? I'm still struggling. No problem. RBI will make you nervous, even as good a job as they have done, of course. How do you think about it? Is it something very difficult to understand? Listen, what we want to do and what we are doing is making sure we are preparing for every reason why costs should come down. Sudhi did speak about digitization. He said, today, a microfinance customer gets a loan with no document signature because the last piece of e-signature also is introduced. The real cost is the cost of collection, where the physical person goes and he needs X number of customers is equal to one person. That we're trying to bring down. My bias to you is, listen, we ourselves will work on cost to make sure that costs become more affordable. If anything happens which is outside our control, then I wouldn't know what to say. But fair to say that we are preparing for a moment where we get as optimized as possible. And as you know, it is not the largest portion of our book. Having said that, of course, it is material if it does happen. Thank you. Sir, please. Sorry. Okay. Sorry. Let him, since he stood up. Please. Sorry. Thanks for the opportunity. I have two questions. First is, correct me if I am wrong, your total number of branches are roughly 500 branches. Am I right? Yes. No. Total branch, 781. Okay. The unbanked rural branches, Srini has left them out of the count for growing liabilities. We do grow liabilities there, but they do not form a significant portion for him. So he has used a non-unbanked rural branch, which is 5- 01. 501 to explain his strategy on liabilities. Out of 500 branches, roughly 215 combo branches you are planning to relocate. Correct? My question is, that seems very high as a percentage. Is it more like a trial, or is it location-wise we are going wrong while identifying where to put up a branch? Because that number seems very high to me. That's number one. Number two, on the digital side, if you can just tell us in terms of the total manpower, how many employees are looking for the total digitalization-related efforts? And in absolute amount, how much you are spending on yearly basis. Thank you. Sorry. First, the good question on, are these 215 branches wrongly located in the first place? You have to just add up two things. We were an urban microfinance institution, and we still have some urban book left. These branches were open for microfinance in urban locations. For example, near Sion in Bombay. But the location in Sion is not an affluent neighborhood. It was opened for microfinance. Relocating that branch from Sion to a more affluent location, say in Matunga or somewhere else in Sion is what we want to do. And because as you know, urban microfinance, we've already compressed, and we don't exist much. Those are the relocation branches. These are microfinance branches in a Bombay or a Pune or a Delhi or a Bangalore, which needs relocation, where there's not much customers left. We have done few, some more on the way. That's the 215 answer. Second is on digitization. I've never measured how many people work on digital, but we have a core team which does digital. But I think more importantly, like I said, anything we plan is first digital. If we fail to do something digital, we will introduce paper. It actually works a reverse way. And a bit easier for us because we have no legacy. Suppose I decide to launch used cars tomorrow. Everything will be like what is available digitally from our employee's mobile, to the credit manager's tab, to self-directed by customer, to registration at the dealership, connection with the Everything will work like that. Wherever a digital connection is not possible, we'll introduce paper. That's the way we work. So I think if you ask me on digital, everybody works on digital. I'll give you one more data point. When we started the bank, in CPC, which is known as centralized processing center, where we centralize, process all the back-end for asset and liabilities. We are roughly about 400-plus people. Our balance sheet has grown six, seven times since we launched the bank, both asset plus liabilities combined. We have roughly less than 200 people now. We have 90 robotic processes at CPC, which is centralized processing center. Which is why when you say how many people in digital, I really want to say everybody, because there's nobody who gets to work on paper really, whether it is a back-end person or a front-end person, and the whole design is about digital. Nothing else comes to our mind. And listen, we are also blessed. The customer take-up on digital is so good. We are not pushing against any friction. We are pushing against good experience, and the customer is absorbing it very well. Will it be, within, say, 1-kilometer radius? That is what basically you are trying to say? Sorry, what did you say? These 215 branches relocation, is it basically within 1-kilometer radius kind of thing? There is no restriction on where I can locate it. Because- There is no 1-kilometer restriction. No, because what I am trying to say is that your branches are not 20 years old. Correct? The demographics of any cluster, whenever you have identified a particular location, correct, doesn't change meaningfully in 5 to 8, 9 years. Right. The entire demographic pattern of any cluster Correct be it Sion or be it Matunga, correct? That ratio, I am still not able to figure it out, what makes you to change 40%? If it is already identified, then why to do it in a phased manner? Why not do it in next 12 months? Right. First of all, Ajay did clarify this, but let me also clarify again. These are our legacy branches, which were largely dealing with microfinance customers, urban microfinance customers, something that Ajay clarified. I think that is where probably there is a communication gap. I clarify again that these are our legacy branches where we largely used to do urban microfinance. Right? Now, we want to be in a place where deposits are concentrated, and that is what Ajay also clarified. To be able to do that, we will have to really move them from, let us say, a first floor or a third floor to a ground floor, prominent location. You would like to visit a bank branch which is prominently visible, you can walk into there very easily, has a parking space, et cetera. We want to make sure that without incurring much of cost, we tap the liability opportunity in the catchment itself. It could be 1 kilometer, it could be 2 kilometer. Got it. Like Ajay said, there's no restriction. Right. Got it. Probably that clarifies the question. These are not the liability center, these are legacy branches. My one question was- Let me finish the other question you asked, which is why don't you look at them all together? Yeah. See, we've already grown 38% year-on-year, right? There is also a cost income you have to manage. There is also a management- Bandwidth. Yeah. bandwidth. Let us do what we think is right to do, and no need to overpay cost or put management under undue stress. This is why there is a phased plan how we do it. Sure. Please. How much we spend yearly basis on the digital development side? See, there is nothing, which is why I am trying to We do not have a digital development cost, which we monitor specifically because digital goes in everything. We do not pull out the digital cost per se. But listen, if I get a more specific answer- Sure. Thank you. then we meet next time, I'll help you. But for me, digital is like there's no digital cost is what I mean. If you start with sales, the guy has to have a front-end app. His app has to have an app which doesn't allow him to make sure the data doesn't leak. It starts from there, goes to the credit guy, goes to everybody else. We haven't really pulled out digital, but when you have Sure 90% odd using tabs and mobile phones, you can imagine it's everywhere. Thank you. Thanks. Congratulations- Thanks on a successful listing. This is Kush Tandon from Ananta Capital. I have a couple of questions on the MFI business. I'm just seeing slide seven, which was presented. Individual loans have been largely flattish, INR 5,100 crore AUM over the last nine months, whereas the BC book is the one which is growing significantly. Is the strategy shifting towards the BC book? If that is the case, what is the economics of the BC book? Is there concentration in the BC book also? That's the first question. Okay. Sudhir can add in, but let me first take off. Or you want to start, Sudhir? Go ahead. The strategy would be the individual loan books will be almost flattish, but we would have good customers coming in from my Agri booking, which is coming there. Subsequently, the existing urban microfinance book, which is individual, they can have a repeat loans on that. So book will more or less be flattish. The growth primarily will come from two drivers, the URCs, which I think grew around 10%, and the BC grew around 34%. So that would be a continuous growth pattern much we have listed. Next year, we expect the growth to come from these two channels itself. How is the economics of the BC business work? How much do you share in terms of interest income? I have that this thing. So we- I will give you a range, not very specific. As you know, this is something which is pretty much competitive information. Sure. The broad range is, it is very good for both the sides. For a BC, it is more about, for him, it is a profitable venture. For me, it is de-risking, as well as being profitable. I think for us, these are two parts to it. The customer is mine, the credit is mine, the system is mine, the liquidity is mine, the capital is mine. There is a fair reward for that. For the BC, he is sourcing and he is collecting, and there is a fair reward for him. Being competitive, I might just be shy of telling you what the commercials are. Sir, does that mean that overall yield in the MFI business will come off a little bit because of the mix changing towards BC? Wonderful question. Listen, it is already in my 7.9% NIM. Sir, I'm just saying that the growth rate is significantly different. It won't be much. It won't be much of difference because Because see on the B. Sorry. Sorry. On the BC model, I do not have a cost. My technology is already invested. My sourcing is all digital, so I do not have any infrastructural and manpower cost to manage a BC. I have staff across all the zones to manage the BC network, but not a full-fledged cost to it. And sir- The cost income of the BC ratio will be very low. This 2,500 crore AUM or odd AUM, is it concentrated across a few BCs? Very good question. We have BCs by state, and within BCs, we give them, within each state, we give them districts. That a Jana and the BCs don't compete, and the BCs don't compete. Also, we would like them to be a certain size. We are very clear. Also, in Sudhir's unit, there is a particular Head of BC, which has a national structure, which really looks after the BC business, including making sure what they are sourcing, doing random checks there. If there are some collections, even though he's responsible, we do go out and make sure that these are genuine issues. There is a proper structure which manages BCs. We began BC business before COVID. We have a good experience during COVID, how the BC business behaves, and our experience has been very positive. A lot of work also happens in choosing the BCs. Yes, very conscious strategy, something we have seen through COVID, and we are comfortable with that. Sir, just the last question on the macro in the MFI space. We just hearing few noise areas in Punjab or some pin codes of U.P., Rajasthan getting affected because of election and because you are being one of the most diversified companies from an asset perspective, what's the on-ground reality you are seeing? Are you seeing some stress in some pin codes, in terms of GNPA, PAR 1, Par 90? All difficult questions to Raman. First, the portfolio. Let's take Punjab as an example, is a very small portion of the total portfolio. I know that. As you rightly said, we are well diversified. The NPA on that book is actually similar to what we are seeing on the overall microfinance book. We have actually been monitoring bucket zero collections over the last few months, and up to and including February, we are trending at similar 98%-99% kind of percentages for the previous months as well. But of course, what we have also done is how do we make sure that we do not get further exposed? Those are some of the things we are going a little slow in terms of disbursals. Have you stopped dispersals in some pin codes? Something like that has started to happen? We have gone slow in Punjab. Sorry? We have gone slow in Punjab for this month. Okay. For last 2, 3 months, we have been watching the situation, so this month, actually, we have gone slow in Punjab. We are just doing just to existing customers and just to make the branch active, but we are not going very full hog on Punjab at all. Understood. All the best. Thank you, sir. Thank you. Yeah. In Punjab for us is very similar. Wherever we think there is a reason to be precautionary. Punjab is some external agency trying to make some point. Let's say even in a case where we think there is too much lending happening, and the data comes from MFIN and Sa-Dhan, where you can see exposures are going up in a particular district or a particular area, we start going slow. Like I said, between 2018 to December 2020 this year or rather 2023, our CAGR is only 3% in unsecured. We are not in a rush to grow unsecured. For us to go slow in a particular district or a particular area is no big sweat because we are there in 24 states, we can try and do somewhere else. Even if we don't do, it's fine. It's not our single biggest focus. Sorry, I must take your question. I'm so sorry. Yes. This is Gautam Jain from GCJ Financial. First, congratulations for listing of the bank and Q3 number post IPO. My first question pertains to, you got the capital even before the IPO and in the IPO, and you have good deposit growth. What kind of growth you can have in terms of loan book for next three to five years? I'm talking about good growth. Gautam, listen, I am trying to go back to a slide which gives you what to expect. We are also debating forward guidance or not. We are not there as yet. Maybe it is our first quarter and we are kind of just getting there. Listen, we are in 180 cities doing secured business, which is tried, tested, digitized model. We are not right now worried about whether we can grow because we know our disbursements today. We know what happens if we do the same disbursement next year. Very healthy clip. All our bias always is like, what we are growing is the right growth or not, but growth is not the issue. Also, I mentioned, it is very simple. I am in 180 cities. Suppose I want to do 20 more cities, I will tell everybody that, listen, any next city, 60 minutes away from your city. If the answer is yes, this city becomes hub, that becomes spoke. When the spoke becomes big, that becomes hub. We go to the next spoke. So geographical expansion is very easy for us. Our choice is geographical expansion is better than taking any additional risk or opening up new segments we do not understand. So our bias is, listen, take the risk of traveling, but do not take the risk of let me try this segment or maybe this property paper is okay. Those kind of stuff we do not like. Range you want to give or you think 20%-30% is something which is very much possible? You are better than me making number guesses. You can decide. All I can tell you is we are going full on. We are clear in our heads that we know we will not have a growth problem for sure. But listen, when we do the full year, which is March results, we will hopefully meet again. We will then prepare a more guidance, which we can then be happy to share. But I think this is like I said, if we can do this through COVID- No, this is fantastic. You would be one of the best bank who has grown their secured book very fast. On this slide, the question is, the way you are growing the secured book much faster than unsecured, any optimal level you want to have in terms of mix between secured and unsecured down the line? I have a more principled thinking, which is you take any normal customer, 70%-80% of a customer's balance sheet is secured. Home loan, car loan. If not car loan, two-wheeler loan. I don't think your customers should have 70%-80% unsecured loans in personal loans or credit cards, right? That's how we understand. I think as long as we are customer-focused, we will ultimately reflect the balance sheet of our customer, which will be either 70%, 80%, maybe 90%, I don't know. We'll figure that one out. But our bias is very simple. Our bank will reflect that of a customer. To our mind, most average customers will not have anything significant unsecured. Safe to assume that your secured book percentage will keep growing. Sorry? Your secured book percentage will keep improving from here also. Of course. See, listen, from zero we have reached 60% in 6 years. We will finish 6 years in March. Every year we have made a positive move, zero to 60 in 6 years. You can do the maths. Coming to the credit cost, your credit cost is generally, last 3 years on more than 2.5%. Now the secured book is growing, and it is significant part of total book. Generally, secured book will have lower credit cost. It is safe to assume that you will have much lower credit cost. Yes Going forward in 2025, 2026? You should expect lower credit cost, absolutely, yes. For two reasons. Our credit cost, you go back to March 2020. In March 2020, before COVID, net NPA was less than 1%. What really spiked it up was COVID. A non-COVID period should see very good numbers from us, both in unsecured and secured. As we are turning more secured, even if something unexpected happens, we will be very resilient. Also, I must add this, even during COVID, we never had a year where we did not make profits. We were able to pay from our provision from our own people. We were able to generate profit to pay for own provision. We never dipped into capital. If we did not do that during COVID, then you can be rest assured that as we have turned more secured, we obviously become smarter. We have learnt a few things in COVID, even in secured. I think we should be fine. Can you give me the breakup of your credit cost between secured and unsecured? I do not think so we have it, but why do not we bring it back to you in March if that is helping somebody? Yeah, it is here, though. It is here. No. There is no Maybe I'll try and when we come back in March, we'll break it up secured, unsecured. But you know the answer. It'll be 80/20. 80 will be unsecured. That's my rough guess, but we'll give you the exact numbers when we meet you next time. Also just a suggestion. I haven't found your balance sheet in the results, so please- You have it here? Yeah. Yeah, listen, thanks for asking that. Somehow, trying to save number of slides to present, we thought that is one we don't. To take away that complication completely, that's it here is the balance sheet. I'm showing it to all of you. I will load it in the website of the BSE, NSE today evening. Okay. That's great. Thanks for letting us know because, in our minds, we were like, what is more important to show the businesses more, so we kept this away, but we'll bring it back. In banking, this is the most important part. You will get this certainly every time next time. Okay. What is your written off book, which is completely written off? Sorry? Written off book. The write off book. You mean from demon days? Whatever written off book you have in hand which is still to be recovered. 3,000-4,000 crores. That would be a fair range. What- Maybe around INR 3,000 crores. I am talking of demon onwards. I have been talking of everything we have in the last 16 years total, that is about INR 3,000 odd crores. Given we have 16 years of existing. Can you guide us about any expected recovery in next three years or one, two years from that book? Typically- I cannot give the numbers, but we used to do a lot of recoveries from the old book of demon also. We still do a lot of recoveries. We have a specified collection team only focused on recoveries. I am asking this question because this quarter recovery was bit low side compared to first half and even last year. Yeah. No, I think that's a fair observation. Because see, listen, the last 18 to 24 months, coming out of COVID, recoveries have to be better. Fresh provisions equal to faster recoveries. As the provision gets older, recoveries get slower. That's a fact. Having said that, because we have an old book, what happens is the day the customer wants the next loan and he gets rejected, he comes to us. All Sudhir and team try to do is they keep in touch with customer and make sure that we are not getting any arguments with him, because very soon as the next loan is rejected, we come back. I'm telling you there are moments even now, and it's not a small number. We are even getting pre-demon recoveries. Because the customer is finding nowhere else to go, he's coming back to you. Yes, we do get that. We are focused on it. We have dedicated people who work on it with a clear task around what are the cost income of a single collector at it, but fair to expect that we will slowly, as you see it, we still are in a significant number. If you see, recoveries in the under If you see this slide itself, December 2023 is INR 95 crores. It's not a small number. I know it's lower than last year, but INR 95 crores is still a very good number. We will keep at it. We don't take our eye off the recovery machine at all, but we are conscious that it'll now come a bit more slowly than the past. Okay. Any sort of comment on cost to income ratio going forward, which is around 58% right now? I think it should get better for sure. Like I said, wait for March and we'll come back with more definitive numbers. But I don't see why it should get anything but move towards a better future. And the last question is, what is your cashless collection in secured book? Last 10%? Cashless in secured book. Did you say cashless? Yeah. The digital collection in secured book. Oh, that I would think is closer to 99%, because the guys who do not pay, they pay through UPI. Okay. Even if my collector goes in the end to collect, I get the money through UPI, so I hardly take any cash. But if you are asking how many people my collector has to visit to collect, that is 8% to 10%. Okay. Thank you so much. Thanks, Sajant. I am just interested in understanding a little bit more about the components that contribute to the other income. As we move from a more secured to an unsecured, some of the older dynamics probably change, right, in terms of the lumpiness of other income across quarters. Would you be able to help me understand that a little bit more? Primarily, other income components includes processing fee. We have liabilities income, which is coming in now. We have recoveries, which are the three major components, and PSL income. On an annual basis, we sell PSL, we earn commission on it. Cross-sell of insurance, that is the other piece which is added. Liability income, which is on an upward trend now, because we have more and more customers to charge to. Then we have processing fee. When we move towards secured, there is a reduction because unsecured may have slightly higher processing fee than compared to a secured business. That is being offset now with the income, which is growing in terms of insurance as well as the liability fee. Then we continue to have the recoveries. There is a decline as compared to last year, as I mentioned about that. Also we have PSL income, which has been around INR 40 crore-INR 45 crore range on an annual basis, which continues to be there. These are the five major components in other income. But see, absolute will not fall because even though secured is growing faster than unsecured is not de-growing. See, now his book is more than last year. Now to manage attrition and small growth, he has to do more disbursement than he did last year. So the fee income of sourcing or processing fee will still remain the same. The difference between the two is processing fee in microfinance, roughly about 2%, and in the non-microfinance, it is about 1.5%. But he is not getting less income. Only that 1.5% is higher now, and 2% will be less as a percentage. But value-wise, will still remain slightly better than last year, because he has to grow more to remain steady. Because microfinance is typically a 2-year book. So runoffs are pretty high. Just to stay steady, he has to do more than he did last year in terms of disbursement. Yeah. But is there some sort of a quantitative indication as to how much was the recoveries portion, how much was the PSLC portion? Then I think for PSLC, it typically picks up in the fourth quarter, right? When banks need to address that. So, this year's lesser growth of other income, does that get made up in fourth quarter? PSL typically happens in the first quarter, not the fourth quarter, because all other banks who are purchasing will take the benefit of the PSL certificate for the four quarters. So last quarter, there will be a lot of transaction which will happen, but the earning commission on that will be lower. So that is one part of it. Second part, you are mentioning was about the Sorry. Quantum of recoveries. Quantum of recoveries. Quantum of recovery. The last year's quantum was elevated because we were coming off COVID, and there were a lot of customers who were coming and paying. This year is a sort of a normalized and it will tend to be at this level or slightly lower levels going forward because more and more customers have paid and there will be less probability of from other customers who will come and pay. But this is a sizable amount still. As I mentioned, it's INR 95 crore in 9 months period. We continue to get to those levels. That's the kind of recovery we are expecting. Okay. Hi, team. Good evening. Ashlesh here from Kotak Securities. Firstly, a few questions on the individual loan book, which is about INR 5,000 crore for us. Can you shed some light on what is the range of ticket sizes which you offer on this book, and the average ticket size of disbursements? Sure. Sudhir, you need to come here. I will just put the slide on. Next slide, sir. The average ticket size on this loan book, on the portfolio size, our outstanding is around 45,000 to 46,000. Sorry, 45,000 to 46,000. It is correct, yeah. Huh? The range. Yeah, it is there. Okay. 45,000. That is the portfolio outstanding of that. Onboarding ticket size should be around the range of on an average goes to around INR 60,000. But these are all graduated customers, so the initial lending was 35 to 40, and then we bring it up to 60. Just to add to what he said. The highest loan amount, and correct me if I am missing the facts. If you are literally a homeowner, which means you are resident in your property, you need something for home improvement, but you do not have any property papers to show me. We call it a home improvement loan, and that is a maximum amount of loan we go because that is the best loan. The person is staying there, but the property paper belongs to maybe his father, grandfather, unable to pledge it. That is when he gets individual loan of the highest amount because he is permanent resident there, has an asset. Then if you take for consumption, for example, I want to use it for school education, et cetera, then you get the least amount. Which is why he tailors it based on what is the end use. What you have here is the average outstanding of an individual loan. What was the maximum that you said? Sorry? The maximum. Maximum is 1 lakh. If it's in the existing housing loan, it goes up to 1.25 lakhs. If he's willing to give and he's staying in the same property and it's for a home improvement. Then if he's going to use it for business purpose with Udyam certificates, it gets reduced. If he's going to use it for consumption purpose, it goes lower than that. Understood. The 644 crores, which you have on the next slide number 9. Sorry, go on. Next slide. The 11 part. That would be completely an open market customer? This is basically we have some business correspondents whom we have allowed them to do business loans. They are primarily dairy-based for cattle purchases, cattle maintenance. The second part is, when it is a good business correspondence, he wants to retain his own existing customers, so he gives them individual loans from that. There is a part of two different portfolios. They would be new to bank, but not new to the business correspondent. That is that kind of a portfolio which is there. Understood. Can you shed some light on your total micro-banking customer mix? How many of them are unique to you? How many have one other lenders or two other lenders? Sorry? The proportion of your micro-banking customers who are unique to you, who would have one other lender, two other lenders, and so on, if you have that ready with you. That's a tough one because mostly now. We'll have to check the data again. Okay. That's a tough one. I will come back to you on the data for that. Lastly, if you can shed some light on what is your average cost of SA deposits and TD. Average cost of deposits. SA and TD separately. Average CASA percentage is around 5.6%, and overall cost of deposit we mentioned 7.6%. Cost of deposits hovering around 8%. Cost of term deposit, I mean. Perfect. Thank you. I think you're all following that rule number one of being nice to the institution when they come first time, but please go ahead. Yeah, please. Hello. Sir, this is Mangesh Kulkarni from Almondz Global Securities. My question is regarding your guidance on the PCR front. It is around 67% currently. How we are going to take it further? I first want to go to that page, sir, on NPA. Yes, we have been improving our PCR, as you know. Very important is while we have PCR of 67.9%, a large proportion was used to cover the secured book, which has an LTV of 40%. We will improve it further. At least all of you as analysts should know that- There is really not so much to worry on the NPA front because a large proportion is anyway secured. You can see this first column where LTV is 40%, which means I have a property mortgaged to me and which I can sell. It only will take a bit of time. So PCR will improve, but fair to say that we will not have much reason to have used the provision because a lot of the book is already secured. Thank you. Yeah, sir. Yes, you have changed, I think, 29 branches, which has shifted or something like that during the year. Yes. What is the cost of it? You are asking me about the cost to income for those branches? No. You have moved the branch. Right. Cost of shifting? Yes. That would be very tough one, but I don't know. I will explain you the elements of cost which will change between the branch which was being shifted and the new branch, right? Relocate it. Yeah. The large element of cost is change in rental, something that Ajay talked about. If you are moving a first-floor branch to a ground floor high street branch, there will be an incremental rental cost and there will be some incremental cost on account of implements for the branch. But barring that, there will be nothing much. Most of it is already accounted in the existing branch. If I- I will not be able to give you quantification of how much is 29 branches, but yeah. If I speak specifically, there was one branch in Ghatkopar area, which was moved from one area to same area within 1 kilometer. Is it a cost reduction or it is a cost increase, rental? Definitely increase, but like I mentioned, existing branch will be, say, 50,000, new will be 100,000. It will be a marginal cost increase, not a 100,000 increase. Because one we have shut down and the other we have opened. It will certainly be higher cost, but a marginal cost. But rental cost? I am talking of rental cost. It will increase. Of course, sir. We are moving from less affluent areas to more affluent areas. Rental will go up. All I am saying is, currently where I exist, I am already paying rental. It is a marginal cost increase, not a new cost by itself. It will be 215, which we plan to move. It will be within one year or it will be No, it will be over at least two-year timeframe, because we do not need so many branches so quickly. Thank you. Okay, folks. First, thank you so much. I am sorry for the delay, but I really appreciate your presence, your questions, and your patience. We will certainly hope to see you all again in March. If you have anything else in your mind which you think, "Hey, I couldn't ask this, I didn't understand this," please reach out to Abhilash. We will certainly do our best to answer all your questions. Again, thank you so much. Bye-bye. Of course, there is high tea served outside, so we will catch you folks there. Thank you.

Data Source: Quartr Last updated: Feb 26, 2024

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