Ladies and gentlemen, good day and welcome to the earnings conference call for Q3 FY 2025-26 results of Bank of Maharashtra. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Margaret Mishra. Thank you, and over to you, Margaret.
Good evening, everyone. We have the following members of management with us today: Mr. Nidhu Saxena, Managing Director and CEO, Mr. Rohit Rishi, and Mr. Prabhat Kiran, Executive Director, along with Chief General Managers and General Managers of the Bank. I will now hand over the call to the management, Ms. Nidhu Saxena, Managing Director and CEO, to walk us through the quarter. Thank you all, and over to you, sir.
Thank you, and thank you all for joining this conference call. We have finalized our results today, and I would say this has been yet another quarter where we have consistently, and I would say for the last couple of years, one of the best quarters in terms of profitability. Also, numbers I will very quickly share. But before that, let me share that the guidance that we had kept in the beginning of the year, we are the first two quarters, and now this Q3, we are well above our guidance number on all the parameters. We have been achieving our guidance. I will quickly share so total business against our guidance of 15% growth year on year, 17.24%, and we reached INR 595,000 crores. Total deposits have increased by 15.3% against the guidance number of 14%. Advances have increased at 19%.
Sorry, advances against the guidance, guidance of 17% have increased by 20% year on year. Then CASA share has been maintained at above 50%. We are doing 50% this year also, this quarter also. Our RAM to corporate share, which was 60-40 plus minus two, we have done 63-37 share RAM growth against the guidance of 20%. We are exceeding that number also. Within the retail, the verticals that are growing in the bank, home loans have grown year on year at 28%, vehicle loans 54%, gold loans 56%. Retail overall has grown at 36% year on year. Our stress in the loan book is very well managed. We have improved on this metrics also. Overall stress number stands at 3.35%, within which SMA one plus two is 1.69%, which is an 18 basis points improvement. In terms of above INR 5 crores, the stress stands at 0.19%.
The gross NPA and the NPA, the numbers are also very well managed. Our gross NPA in terms of percentage has got reduced from 1.72% in the last quarter to 1.60% this quarter. The net NPA has improved from 0.18% in the last quarter to 0.15% this quarter, and we are well within our guidance that is to maintain our gross NPA less than 2% and net NPA at less than 0.25%. The ROE and NIM numbers against the guidance of 3.75%, we have achieved 3.87%. ROA guidance 1.75%, we have achieved 1.86%. ROE guidance to maintain ROE above 20%, we have actually achieved in this quarter 23.79%. Our cost to income is to be maintained below 40%. Against that guidance, we have done 37.19%. Yield on advances stands at 8.95%. We have experienced also reduction in our costs, and cost of fund stands at 4.10%.
Cost of deposit stands at 4.47%. Overall, the profitability has been good in this quarter. We have been able to clock our highest ever quarterly profit of INR 1,179 crores, and the nine months net profit has exceeded INR 5,000 crores, which stands at INR 5,005 crores. We are maintaining a healthy CRAR against the guidance of keeping the number above 16%. We have a CRAR of 17.06%. CET1 is maintained at 13.10%. In these nine months, we have also seen OFS issuance by the government, and we are today an MPS-compliant bank with GOI holding standing at 73.6%. Ratings during the year, beyond one international rating from Fitch, we had approached S&P Global, and they assigned us triple B minus stable in September 2025. Our long-term rating is AA+ stable from ICRA and CARE. Short-term rating is A1+ from CRISIL.
Looking at this good profitability, we have also looked at considering payouts in terms of interim dividend. I'm happy to share that 10% interim dividend has been approved in our board today. I will take a pause, and I think we will take more questions from your side. The detailed presentation, I'm sure, is made available to you, and you would have gone through those, and we would like to take queries from you and respond to those. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take a first question from the line of Ashok Ajmera from Ajcon Global. Please go ahead.
Thank you. Compliments to you, sir, Nidhu sir, and the entire team, Rohit sir, Prabhat Kiran, and the top management of the Bank of Maharashtra and the other staff for a very, very excellent quarter results-wise. If you see, and you rightly said, one of the highest quarterly profits taking the bank. In fact, now the size of the bank is also increasing. You are now going to touch maybe the next quarter, INR 6.5 crores of the business. So quite a good sizable bank. And my compliments to you, sir, for the fantastic show. Having said this, sir, hello, am I audible?
Yes, you are.
Yes, sir.
Please go ahead.
Yeah. So just one or two couple of observations and a few points. While in this quarter, also, we have grown in this quarter, we have grown well on the credit front as well as the even deposit also. But overall, if you look at the nine months growth in the deposit, it is only 4.73%. I don't take the whole year, but if nine months, which means in the last quarter of this January, March quarter, we'll have to raise the deposit of almost about INR 29-30,000 crores to reach the target of that 14% of the deposit. So just like in the previous year, you have achieved that. This year too, are you confident of achieving this gap or bridging this gap of about 9% for the whole year?
On the deposit front, and this has basically affected our, I mean, rather affected the CD ratio also, which has gone up very high at 85%. And CRAR also has come down to now 17.06%. I just want to like to have your comments on this, that how are we placed and are we going to achieve the deposit target? This is my question once.
Ajmera , the deposit guidance that we have kept is 14%, which will be maintained. I would like to bring to this notice that if you see the deposit growth, which is lagged the credit growth, but within the deposit, the composition that has grown in the bank is the low-cost component. CASA, even in the last quarter, if you ask me, 12% was the total deposit growth, within which CASA grew by 14%.
In this quarter, the total deposit has grown by 15%, but within which CASA has grown by 16% year on year. Now, the focus is very, very clear to raise low-cost component of the deposit. Very consciously, this is our strategy for the last couple of quarters to let high-cost bulk deposit leave our bank if we don't need that kind of funding, and we have tried to look at other alternative sources of raising resources. We have gone for almost INR 14,000-INR 15,000 crores of refinance transactions whenever at appropriate time during the year. Carving some of our portfolio, we have been able to raise resources at a blended rate of 6%-6.5%, which have been quite beneficial, and this is coming with no overhang for CRR and SLR requirements, so it was a conscious strategy on our part.
In fact, in the last quarter, we have seen the bulk deposits for the first time. We have degrown year on year by 7% in the last quarter, and this is overall the DRI component also from total deposits, bulk, the DRI, which was as high as 13. We have slowly and gradually let it come down, and it stands at 5.08, so it was a conscious strategy, and that is also impact on the CD ratio going up. What we feel that it is not the bulk high cost is a function of rate of interest that we will decide, and we can easily get that business to enter our system. But we are more conscious on the profitability aspect of that.
And at the right moment, we will keep looking at raising more of the low-cost deposits, and the priority will also be towards retail deposits, which are more stable, don't experience volatility. There we keep offering some special schemes, offering some special rates to get that kind of a deposit in our bank. So this is how we are managing. CD ratio is also an outcome of that, but at the appropriate time, we will be taking calls during this quarter, and a lot of things do happen in the Q4. We are all aware that's how the industry experiences, and I will have no element of doubt that 14% that objective is in mind will not be achieved.
Yes, sir, point well taken, sir.
In fact, you are known for your CASA, which is of course a low-cost deposit, and it is maintained still in these difficult times also at almost about at 50%, though it has gone down a little bit from March of 53% to 50%, but this is commendable. You want to maintain this also. Sir, having said that, sir, now coming to our overall profitability, the overall profitability of the bank as such is very good. But if you look at the treasury side, I think in this quarter, we have suffered the profit on the investment, I mean the loss of about INR 180 crore as compared to the profit of INR 99 crore in the last quarter. And even if you look at the segment-wise treasury profit also, that has also gone down to INR 106 crore against INR 433 crore in the last quarter.
There is definitely some pressure on this. Going forward for the remaining one quarter of this financial year, how do we see ourselves going and making at least the offsetting this, some of the treasury losses which have taken place or rather coming into the profit, which adds to the overall profit of the banks and make it more profitable?
Before I start looking at this, let me just give you one more number. CASA percentage has actually improved in this quarter by 26 basis points year on year. That again is a substantial improvement. In terms of treasury income and the number that you are seeing, there is a one-off of INR 290 crores of Maharashtra Gramin Bank and Vidarbha Konkan Gramin Bank amalgamation, which has resulted in this INR 290 crores of one-time hit.
If you exclude that, treasury also will be seen quarterly profit of around INR 115 crores.
INR 112 crores.
Yeah.
That's good, sir. So it means in the next quarter, this INR 290, if you remove and add to the whatever the treasury profit is there, then that will be added further to the bank's overall profit, and it will be accordingly can be seen and analyzed, the bank's performance coming.
Sir, coming to the if you look at the little bit of the composition in the segment-wise results, which are being always furnished along with as per the requirement of Reserve Bank of India. So here, if you look at the profitability segment-wise, then in the retail book, our profit has gone up to INR 1,050 crores as against INR 673 crores in the last quarter, almost about INR 400 crore. Wholesale book is also a little bit better from 72,802.
So is there any recomposition? Is there any like maybe the gold loan or agri loan reclassification between retail and wholesale book or some or I mean, what is the reason for such segment-wise, such a high jump in the retail profitability, sir?
So if you look at the portfolio and the growth, the main elements in the retail segments, the individual in the retail advances, agriculture, MSME advances. If I talk of retail, home loans are experiencing a year-on-year growth of 28%. Vehicle as a portfolio where we have focused on big ticket business with our existing clients has grown at 54%. Gold loan itself is growing at 56%. And we have also entered into co-lending partnerships. Almost nine have been signed up to this time, and they're both majorly in the segment of gold, then housing and MSME.
We are also signed up with the co-lending arrangements, and that is also a sizable book that has been built up, and where we have got good pricing for the business that has entered the bank. So this is how, but let me tell you, we are wherever we are growing simultaneously, our corporate book also with the corporate growth of year-on-year 19%. I think it's a very healthy where the industry may be a single-digit growth, and we are expanding into areas where new opportunities are visible, new profitable opportunities are visible. We have done a lot of green financing, renewable energy projects. We have done data centers and the like EV segment. So a lot of this kind of funding has been done in the bank and portfolio has gone up.
So contribution will keep coming from all the sectors, and we will participate in any kind of opportunity that is visible to us, which where the only underlying thing in the corporate segment, whether we understand the risks, whether we are able to manage it well, and if it is a profitable opportunity, whether in the retail segment or in the corporate segment, we will definitely participate.
The last question, sir, on the slippages. Our slippage this quarter has gone up a little higher at INR 700 crore and almost INR 750 crores as compared to range of INR 650-INR 700 crores. So is there any one-off this thing of 100 to 100 to 100 crore, or it is a common normal things in the quarter which is going to be followed in the coming quarter too, sir?
No, Ajmera, sir, slippage is also, if you look at the ratio, our advance book is increasing. In terms of percentage, it is 1.2%. The same was the figure last year, and even one year back also, we were around this range only. So there is nothing alarming there is solved in the usual course of business. That's what I would like to say. And just to supplement your observation on the treasury income, and these are already put the things in the right perspective. But if you exclude that one-off item which has resulted by way of because of our investment in MGB, in the last year, entire net profit on our investments was INR 220 crore. And if we remove this one-off item, then our nine-month profit is INR 352 crore, which shows marked improvement.
Similarly, on the asset acquisition side also, last year, our entire year profit was INR 63 crore. This year, in nine months, we have done INR 107 crore. So core operations are profit, they are improving, they are contributing more towards profitability in the current financial year.
Great, sir. My compliments to you once again, and all the best to you all. I'll come back again if the time permits, sir. Thank you.
Thank you. We'll take our next question from the line of Mahrukh Adajania from Nuvama. Please go ahead.
Hello, congratulations. So I just wanted one clarification first that it's fair to say that you had absolutely no impact from the new labor codes? That's my first question.
We have done our assessment. It is a very small amount, around INR 33 lakhs is the figure with keeping into account our contractual employees, our regular employees. And that is a number which is very insignificant and needs no discussion is what the sense we are having. With the new labor code, new rules probably are under the framing, and if new interpretations or within the code, new rules are seen, we will keep a watch on that and see how it is impacting. But as I said, it is only a small amount of INR 33 lakhs on account of the new labor code, the rules which are applicable to us is the impact on Bank of Maharashtra.
That includes the gratuity contribution and everything?
Yes, ma'am. Yes, ma'am.
Okay. And sir, my second question is on the LDR only. So the LDR has shot up, and that's true of the system. It's not unique only to Bank of Maharashtra, right? And previously, RBI has always gotten worried when the LDR touches 80%. Now, the system LDR is 82%. So do you foresee any regulator action or soft nudge from the regulator given that the system LDR is rising so much and it's already above the comfort level of 80% that has been historically the case?
The LDR, in my case, we are keeping a guidance of maintaining around 83-84 in the present circumstances. We feel that is the best prescription in terms of able to generate our profitability. I also had mentioned to a previous query wherein very consciously we have been looking at other alternative sources, including infrastructure bonds, and which has also contributed in some way to see that 1-2 basis points more of CD ratio LDR in case of Bank of Maharashtra. But I think there is no major challenge. There is no prescription from the regulator. We all know that. So far, no soft nudge also.
But we are mindful of this, and we will keep looking at raising core business, stable business that comes from branches rather than it is very easy for us, which is a matter of function of interest rate that I would offer on a bulk deposit and let the deposit be raised in the bank. But we would not like to exercise that option. It will not be out of place to also say that we are running a project currently in the bank. We are calling it as Project 321, wherein 321 branches selected very scientifically at the PIN code level, we have decided to be open in 18 months. While I speak today, 116 of those branches have already been made functional, and they are doing business. So these branches are going to get us the core business of individual deposits in their jurisdiction in that branch.
And that's how we will be focusing, keep continuing to focus on the core business, core deposits, stable deposits where we see no fluctuations, major, no volatility in our business. Stable figures is what we are experiencing now. And we will continue to be mindful of how the impact on LDR going forward and take corrective steps wherever we feel has to be taken, we will do that.
Okay, sir. And my last question is on rates. So what is your home loan rate right now for your prime or your best customers? And what would be your average yield on gold loans?
So we are keeping very competitive home loan interest rates. And the idea is with a big enabler of able to maintain such a high CASA, we are able to offer the best interest rates in the market. We charge 7.1% for our loan borrowers, but then this rate is again not available to all. One has to qualify in terms of their credit scores. So there is a graded slab. The best interest rate is available for CIBIL score 800 and above. And we have a slab system depending on what credit score I enjoy, I will be priced according to that. We have also been mindful of the quality. Somebody some mention was there for slippages. So it is not only pricing the product with CIBIL scores, we have also done underwriting.
The underwriting benchmark does not permit in the bank no funding below CIBIL score of 681 and below CIBIL score. We have benchmarked our underwriting to TransUnion CIBIL, and 681 and below, there is no underwriting in any schemes in the bank. We are going. We are mindful of the quality, the loan book that we are forming in these good times. We are also aware of that part and profitability, of course. We are aware of.
Sir, your average yield on gold loans?
So, my gold loan, we have actually made three options because with the tweak which has come or the relaxation, dispensation which came from the regulator on this segment, they have permitted small segment agriculture gold loans, small segment up to INR 10 lakhs, MSME gold loans, and the non-retail, non-priority retail gold loans. So I have three products where I will, if it's agriculture and classified, I will charge the lowest rate. But we are getting a yield of almost 9% around in our gold portfolio. Also when I mentioned.
Includes agri also.
Yes, it includes agri also. And we are also having the co-lending partnership of sizable book. Today, I think we are the leading bank in the industry having NBFC co-lending tie-ups and more than one NBFC we are doing that arrangement with where using seamless digital API and reverse API integration, we are doing that business. And we have almost now INR 5,500 crores of business in that segment where I'm getting a good pricing. I also don't incur any expenses in safekeeping of the gold jewelry. There is no insurance cost to me. I'm getting a good rate. So this co-lending also is a and the portfolio is behaving very well. We intend to further increase these co-lending partnerships with some good-rated gold NBFCs who will be willing to join hands with us.
What is the co-lending rate? Rate on co-lending portfolio?
So that is subject to our discussion, negotiation. But system knows that the private gold loan NBFCs charge a very high rate. We are not into that game. We are mindful of the quality also. Although it's a self-liquidating asset, but there is a ceiling in our co-lending arrangement beyond which we will not permit underwriting. So there is a strict business rule engine through which this entire underwriting will flow. So whatever gold NBFC branches throughout the country will do business, the portfolio is shared to the bank. We will do our LTV checks digitally. We will do the screening, and then purity check is done, and we will underwrite this portfolio the very next day. So the technology that supports this co-lending arrangement is working seamlessly. There is a reconciliation on a daily basis that is happening.
And as I said, a lot of issues in doing gold loan business that we encounter when we do it in our branches versus in this co-lending arrangement, the front ending is done by the NBFC. I'm saving a lot of cost on those fronts also. But rates are negotiated one-on-one. I'd like to disclose those.
Okay. Okay, sir. Thank you so much. Thank you.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions. We'll take our next question from the line of Rohit Priyadarshi from Mittal Analytics. Please go ahead.
Yeah. Hi. Thank you for the opportunity. I hope I'm audible.
Yes, please go ahead.
So congratulations on good set of numbers to the management. And my question is on the yield front. If you look at our yield on advances, it has been reducing from 9.27% last December to 8.92% this December. So could you please explain the key reasons behind this decline? Is it mainly due to the loan exchange or reducing lending rates or anything else? And what will be our yield guidance for the coming quarters?
So the yield on advances is standing at 8.95%. But you would have seen that there have been 125 basis points rate cut from the regulator. And we have, like everybody, every bank has mandated to pass on the rate cut without any time lag. We have to mandatory pass this rate cut benefit to our portfolio, which is linked to the repo rate. So around 40%, 42% of portfolio is linked to the repo, which gets this benefit passed on immediately. But the deposit pricing, which is always coming with a lag, and with this rate cut happening, the overall yield will see an impact. But we have been very mindful when this rate cut cycle was in the offing, aware of that almost 30 basis points to 35 basis points of MCLR raise we had done in a 10 months to 12 months period before this rate cut began in February 2025.
We have seen that this portfolio still may be one quarter of portfolio which will be remaining for getting repriced in that MCLR portfolio. It is around 55% that is our loan book comprising or linked to the MCLR. With this rate cut, clients, the good rated borrowers have been approaching, and they have been getting options. We have to be aligning ourselves, remaining in the market and doing business. Some good rated borrowers also on the MCLR side have been approaching banks with concessions. When the competition is looking at those and considering them, then we would also not sometimes like to lose the business. All these are elements of headwinds in this thing.
But ultimately, with rate cuts, the ancillary benefit that bank is getting is that with new rate cuts, we will see new opportunities coming for the bank for raising their loan book all over. New home buys are happening, the interest rate cut, the tax rates, the GST cuts. All this is doing is enabling, empowering people to go and spend. And when this is happening in the ecosystem, ultimately, the funding opportunities for all the players in the ecosystem is only going up. So that's how we are also going to get benefit out of that. The yield may a little bit soften, but overall, our volumes that we are doing higher, ultimately, it will become a profitable proposition for the bank, though not on the immediate when the rate cut benefit has to be passed immediately. There will be a lag where my deposits will get repriced.
For that intervening period, yes. But as I explained, ultimately, bank also stands to benefit.
Understood, sir. Understood.
We don't have a guidance on advances. We have a guidance on NIM. We are targeting to maintain at about 3.75%, and we will maintain it.
That is good, sir. That is good to hear. And then secondly, how focused are we on increasing the MSME loan book? And what kind of yield can we expect from here? And since I believe MSME usually give higher yields, so do you see this helping our overall yield improvement going forward?
So as I said, we are into wherever we see profitable opportunities and where we are comfortable to build our exposures on. So with MSME also, we are looking at this segment also very seriously. What we have done is low-ticket MSMEs. The journeys have been created using technology, and the end-to-end process is digitalized where we don't wish to have too much of engagement in our branch for availing or disbursing these MSME small ticket size loans. So we rely more on digital journeys where we will set our own business rules, and the underwriting quality will also be managed well. MSME, we will keep trying to grow. We have been growing double digit, high double digit, I would say, in 2015, 2016. Lately, in the last quarter, you would have seen our MSME and agri book has shown a single digit growth.
I have also shared about this rebalancing strategy that we were undergoing. And very consciously, we are rebalancing some portfolio in these two segments and using these good times where the growth is happening in high double digit. I want to onboard some business which is, I should say, a high quality business and replace some businesses with those. So this is a rebalancing that was happening. Now we have improved drastically. When we look at September growth in agri MSME year on year versus December growth, you will see marked improvement has come in. And very consciously, we have been underwriting big ticket agri and MSME advances and onboarding them. When these set of clients are coming, focus has moved from production link finance to investment credit in the agri segment. And that's how we have done a lot of rice mill, dal mill.
We have done warehouses, cold storages, and we have seen that while the portfolio has grown, we have got some ancillary business also. We have got a lot of primary and collateral securities, so we have grown the portfolio in a very secured manner, and of course, yes, you are right to say that the pricing, if you are able to service the client's requirements expeditiously, this is the portfolio which is able to get you good rates also, and there's not much of competition here, so we deliver our products and products fast through a quick decisioning and are able to command some premium in pricing also, which a customer is happily paying to the bank, 20 basis points-25 basis points don't matter if their requirements are expeditiously seen and met by the lender. They'll be more than happy to pay that.
Yeah. That is good. Yes, sir. That is good to hear, sir. Thank you so much for the opportunity, and I wish all the best to the management. Thank you, sir.
Thank you. We'll take our next question from the line of Jai Prakash Mundhra from ICICI Securities. Please go ahead.
Yeah. Hi. Good evening, sir, and congratulations on a steady number. Sir, my first question is, during the quarter, RBI had opened the window for MSME dispensation to the export unit. What would be the quantum, sir, if we would have received any request for moratorium from export customers?
We'll just come back to this, come back to you on this. We are aware of this dispensation, and we don't have a very big portfolio around here. But we will just come back to you if there is any major thing.
Total amount for the MSME for this compensation, whatever the RBI guidelines has come, it is around INR 5,000 crores, sir.
Okay.
It is already. We have started the process, and it is undergoing, sir.
Sure. So sir, you have a loan book of around INR 50,000 crores in MSME, right? So out of INR 50,000 crores of MSME, around INR 5,000 crores have come for disbursement. Is that, I mean, is the number right, INR 5,000 crores?
Yes, sir.
Okay. Sure. And these are all export-heavy, predominantly exporters only, right, those who are engaged in export and have been impacted under U.S. tariff, etc.?
Yes, sir.
Sure. And sir, the window has now been closed, right? That now no more, as of, let's say, 13th of January, if a customer, similar customer wants a similar dispensation, they cannot have that, right?
Correct. It is still 31st of January.
Okay. Sure. Sorry, sorry. I missed that. Sorry. This is 31st December or 31st of January?
January.
Okay. So the window is still open, right?
Yeah.
Okay. Second question, sir, on LCR. If you can suggest what was the LCR at the end of quarter three? And as we move into April 1st, you may have now a higher LCR requirement on the mobile and internet banking. But at the same time, you will have some relief, some lower risk rates on the bulk deposit, right, at least the NBFC deposits. So how do you see the net-net impact, let us say, on what is the Q3 LCR number? And assuming you have to provide higher on mobile internet banking but lower on bulk deposit, how would it look like? Would it be net impact positive or net impact negative?
So we are looking at these calculations that are being done. But meanwhile, we are keeping internal guidance for us to maintain LCR between 115 to 120. We feel too high on this number is not a very good idea to maintain. And LCR, to answer your question, for Q3 is 116.36. And I will ask my CRO to just respond to what is in the offering, as you said, 1st April. You want to add anything?
On the 1st April, whatever the guidelines say, increasing the HQLA and LCR with deposits. And we have seen this HQLA and considering the net outflow, we have seen this net positive impact on the banks around 3%.
Okay. So the net impact will be a positive impact on LCR, right?
Of 3% is what the calculation is showing.
Correct. Correct. So sir, assuming you have to move to on 1st April, you need not shore up liquidity, right? If at all, you will have some relief of liquidity. Is that the right understanding, or there is some other element here?
You are right to say that.
Okay. Sure. Sure. And secondly, sir, if you can talk about the total gold loan of Bank of Maharashtra, the retail gold you have given is around INR 12,000 crores. What will be the total? Do you have agri or MSME gold also, or that is not very meaningful?
No. Like I said, we have all the three variants. Today, with regulator, up to INR 2 lakhs being permitted to be classified as gold loan under agri subject to conditions. So if those conditions are getting met, so agri gold loan is also possible. Likewise, up to INR 10 lakhs for MSME is possible. For other than that purposes, it goes to be classified as a non-priority gold loan. And the breakup, if I have to tell you, the retail is INR 12,000 crores, agri is INR 9,000 crores. And MSME, which is a new product introduction post this regulator guideline, we very quickly gave this option also. So it is INR 1,000 crores. And this is one segment which we have been aggressively to grow, and we had marked as one of our focus products.
If you see quarter on quarter, we have been growing at a very high rate of 40%-45% year on year. Right 18 months back, I remember it was almost INR 7,500-INR 8,000 crores. Today, including coal lending, we stand at INR 22,000 crores. So minus around INR 5,000 crores of exposure in coal lending, 16,500-17,000 gold loan is happening to our branches. Rest is what is under the coal lending tariffs. So the point is, we have been also very careful that this business, although it is a very good business, attracts zero risk weight as per the guidelines. But if the two elements, which is the purity of the gold and the safekeeping of the pledged ornaments, these two infra we will create first and then only permit a branch to venture into doing gold loans.
So I think the focus which is there has led to good growth in the portfolio. But going forward, we will keep this drive of growing the gold portfolio. 116 branches that we have opened in this FY under the Project 321, we have supplied them with gold safe from day one. So mandate is very clear. They would also be looking at doing gold loans as per the potential that is available. And today, gold loan is not the element of six traditional south-based states, but it is happening elsewhere also in the country in a big way. A lot of scope is there to grow this portfolio. A lot of gold loans are in the unorganized segment. Despite we very clearly see after the COVID, a lot of focus has come from banks. Most of the banks have grown gold loans.
But still, I would say there is a huge market that is there for coming to the banks and even the NBFCs from the unorganized segment. And the customers also stand to benefit because the interest rates getting charged in the banks particularly will be very low. So we are growing this portfolio.
Right. And sir, if you have this, I mean, just an opportunity.
I'm sorry to interrupt, sir. May I request you to join back the queue, please, as we have participants waiting for their turn?
Sure. Thanks alot .
Thank you. We'll take our next question. Thank you. We'll take our next question from the line of Bhavesh Kanani from UTI AMC. Please go ahead. The current participant line is disconnected. We'll move on to the next question from the line of Akshay Badlani from HDFC Securities. Please go ahead.
Yeah. Hi. Thank you for taking my question. So my question is around the margins. So yields, what we can see is it has dropped by over 25 basis points this quarter. And before that, there was 100 basis points rate cut, but the yields did not drop as much. And also, the rate cut happened slightly at the end of the quarter. So I wanted to understand that why did we see as much drop in the yield on advances? And secondly, on the cost of fund side, there also we have seen 22 basis points reduction. So is that largely term deposit repricing, or have we done some repricing on savings accounts as well? Thank you.
So I'll take your second question first. So yes, we keep reviewing the interest rates being offered across spectrum of products, including the saving deposits. Also, when we look at this business, we see very clearly there are two components. One is the institutional business with the institutional CASA and the retail core CASA that is happening through our branches. I have been mentioning about this vertical that was set up with the idea to reach out in a very systematic manner to the institutional clients, which our understanding is they have a different set of requirements. They need to be understood. Their requirements need to be understood.
We go ahead and do a lot of value additions when we look at institutional CASA relationship coming into the bank, where we try to give them some technology-based solutions which will take care of their transactional needs, saving needs, investment needs, or payments and collection needs. That's how we bring value to those institutions. That's how we are able to see that leaving in the ecosystem many options of banks they are having, but they prefer to bank with us. Institutional CASA, we keep focusing in a different strategy altogether. The core CASA, we have done a lot of new products introduction to see that today in the ecosystem, whatever segment of savers are there, whatever segments of deposits that will come from banks, from women, from kids, from professionals, from HNI, Ultra HNI, NRIs, the entire product basket is available.
Customized products are available to them. We have gone ahead and revamped one most important channel in today's time where the customers come and transact, which is not in the branches, but is the mobile application. And I'm happy to share that our new mobile application is just not an upgrade of the old version, but we have totally revamped and launched a new version where the theme or the underlying principle was making life simpler for clients, letting them do transactions with minimum number of clicks. That's how the journey, that's how the app has been developed. And it is getting a lot of good reviews, has been appreciated. Clients who have onboarded themselves are able to transact and see the difference. What the old version took seven months for first one lakh downloads, we achieved first one lakh downloads in 14 days.
And today, while I speak, this is a very recent launch in September on our foundation day, but we have crossed 6 lakh active users, which in the previous version was INR 2 lakh 25,000 users. So that's how we are bringing change in core CASA, giving right product choices, ease of customers for doing their business. Once they are onboarded, they are able to transact seamlessly with us. And that's how we are seeing slowly, steadily acquisition is coming from that element also. Core CASA, stable individual deposits, and the institutional. Your other question was?
On the e-dollar aspect.
So retail advances, you rightly have said. But see, the earlier time, it was not the full quarter impact which was there we had seen. And we have also passed on our rates. I did mention in my last response to a query wherein our good-rated borrowers also are demanding, "I would not like to lose a borrower." And we try to, whenever rate cut request is coming, we try to compensate that the overall profitability from that client should not have gone down. So we always seek while we give them good rates so that they continue to bank with us, but we try to replace the loss in the concession that we have offered through getting some ancillary business.
So overall, the income may not be seen in the advances book, but we will get some ancillary business, whether it's payroll accounts, whether seeking their payment and collection business, and trying to get some income through those heads. We are getting some of deposits of theirs to sit with us. That's how we try to keep compensating that the relationship continues. Our profitability with that client also should not go down. But then we are operating in this market. We may see another rate cut is being discussed, but we keep a close tab. We are mindful of those things, and we keep doing business. And if you see the bottom line, ultimately, we have maintained, and we have not seen that any of my NIM, ROA, ROE has seen a contraction.
This is the quarter where I had mentioned last time that probably we will not see any further contraction in NIM, and we have actually increased NIM by two basis points only, although, but we have increased, at least no contraction, and there is a 25 basis points rate cut, is what we have come, but then again, the next quarter, I will get the full quarter effect of this rate cut, and we may even going forward see further rate cuts, but we will keep operating and keep maintaining the bottom lines and the profitability metrics. We will keep achieving those as per our guidance and try to surpass our guidance every quarter.
Sure. Sure. Thank you. Thank you for answering my question.
Thank you. Ladies and gentlemen, in order to ensure management is able to answer queries from all participants, kindly restrict your questions to two at a time. We'll take our next question from the line of Ashlesh Sonje from Kotak Securities. Please go ahead.
Hi team. Good evening. A few questions from my side. Firstly, can you share what is the proportion of your term deposits, which are yet to be fully repriced at the lower rate? That is one. Secondly, you mentioned that the home loan disbursements, which happen at the 7.1% rate, are a very small proportion. Can you share that proportion with us, please? And lastly, in your exchange disclosure, you have shared that roughly you bought loans worth roughly INR 5,000 crores in this quarter and about INR 12,000 crores during the nine months. Can you share what type of loans these are and who are they acquired from? Thank you.
First is deposit getting repriced. When this rate cut cycle has begun, and very closely we have been seeing and monitoring this development. Our typical maturity profile against the industry standard of 12 months-15 months, our maturity profile at that point of time was eight months to 10 months. We have seen most of the deposits by that time have got repriced. Then again, there is a fresh rate cut announced, and we will see that this is a cycle which will keep happening. We are also seeing that we don't wish our we should keep offering when the other banks who are not able to garner deposits and they are facing challenge, they are also offering very high rates to depositors. I would not like my retail depositors at least to leave the bank.
They are the stable core deposits. So we keep offering good rates to them and meanwhile not focusing on the high-cost bulk, but continue to give these kind of rates to them. So these are the, I think, continuous dynamic challenges that you will keep seeing when this kind of rate cuts will be happening. What is the next question, please?
The proportion of disbursements which are at 7.1%.
Yes, sir. So, 23%. When we introduce this metric, we strengthen our underwriting of benchmark standard in home loans and all retail segment loans by saying that there will be no sanctions below 681. So the pricing also was tweaked according to that. So I can share with you when the 12 months have passed, the 800 and above CIBIL score, which is entitled to get that 7.1 rate, 23% of sanctions in that 12 months happened in that bucket. And 57% of sanctions happened between 750 and 800 bucket. So if you put together 23% plus 57%, 80% sanctions were happening in that bucket. So while I am giving very fine rates, I am also trying to get some ancillary business because the mandate given to our field functionaries, when they sell one home loan, they will be trying to sell minimum four products on the day one.
So they will try to offer a co-branded credit card that we have now in our kitty. They will try to do a group credit life, explaining the benefits of that scheme. And if they are not able to get the operative account from where the salary or the business where the servicing of EMI will happen, they will request the borrower with minimum three EMIs as deposits with the bank. So we do home loan with these three, four things together. So that's how. But you will appreciate that the quality of loan book that is now getting created for the last 12 months-15 months; this will be of good quality. We will not see going forward the kind of slippages number guidance we are keeping to maintain it below one. It is behaving well, 0.88 for this quarter.
Annualized is 1.2, which is the trend we are seeing last quarter also and a couple of quarters behind us, and we would like to see that this ultimately will go down further. Any question I missed, yours, sir?
Sir, the loan purchases of roughly INR 5,000 crores, which you did.
Yes, sir. So the full transactions that we are doing, at some point of time, we keep analyzing our portfolio that is built. And when we reach to a realization that some rebalancing is required, we will do that. So we had also marked that we will try and reduce our overdependence on pool transactions. While saying this, we are not averse to doing pool at the right moment as per need of the bank. If for some PSL classifications, I require a portfolio, we will do that. We will also do pool buyouts when we are getting a good pricing or we have other ancillary benefits with that. But my core branches business must happen first. Then we will see what pool we will do or not do.
So the mandate given to the field functionaries, my 50 zonal offices, and now 2,700 branches is to stop looking at what the bulk business or pool business you will do. That's the central office call. They will see that the KRA of the zonal manager is the core business that is happening in their set of 60-65 branches, whether it is happening or not. Their KRA is very clearly defined in those terms. So what we have done is, sir, we have reduced our overdependence. The December 2020 fourth quarter, in fact, became the first quarter where we have seen YTD degrowth in the pool. Year on year, -7% in pool. But as I said, again, from time to time, we will keep looking at taking pool partnerships. Today, when in the agri and the MSME, I mentioned about doing a rebalancing in my portfolio.
It was a conscious strategic decision on the part of the bank, and to see that the portfolio is there, we have taken some pool transactions in the last one-two quarters. We will again shift back to my branches doing the core stable business, and from time to time, it is purely a central office call. We will see the profitable part of it. We will see the PSL requirements part of it, and we will keep doing pool transactions going ahead also.
Got it, sir. Thank you. Sir, just one clarification on the first question. Fair to assume that the term deposit book is largely repriced now and no more repricing should be expected?
So some more is 18%-20% is likely to be repriced during this quarter is what is coming up. And some part is repriced. But moreover, what happens like the one is after the rate cut from RBI and then basis that there are multiple rate revisions at the bank level also depending on the appetite of the bank. So basis this repricing keeps happening. But as of now, we can tell that about 18% repricing is expected during this quarter.
Understood, sir. Thank you, sir. Thank you very much for your responses.
Thank you. We'll take our next question from the line of Bhavesh Kanani from UTI AMC. Please go ahead.
Thank you for the opportunity. I hope I am audible.
Yes, please go ahead.
Yeah. So my question was on the MSME segment. Sir has mentioned a couple of times that there is a rebalancing going on. So it would be helpful if you can help us understand the nature of rebalancing, the purpose behind that, especially in the context that within MSME, the medium entities book seems to be degrowing dramatically. And this is surprising when we look at the sectoral GNPA numbers, which clearly reflects that medium enterprises are experiencing improving GNPA profile. So hence the question that what is the reason behind need to rebalance. Similarly, on Agri too, while the headline total number seems to indicate a single-digit growth, within Agri, the Agri infra and Agri ancillary portions of the book are growing at a much faster rate. So what are the segments, the kind of borrowers we are serving here? That would be helpful.
Last one was on the other expenses. That seems to be a sharp spike sequentially. What is the reason behind that spike? That's all from my end.
Thank you for the question. MSME, there has been some reasoning behind the change in the regulator guidelines. With the MSME limits getting enhanced, you would have seen some portfolio, which is MSME shifts. They have increased the limits. There is a portfolio which would move from mid to the small segment. Likewise to micro, even some corporate accounts would have moved to MSME getting entitled. That is one thing which is happening as per the change in the regulator guidelines. What we have been also looking at rebalancing, the TReDS book that I am having, this is a function of not underwriting. There is no underwriting involved. It is a function of pricing.
I can easily grow the TReDS bill discounting portfolio by offering very cheap rates, which normally is getting provided to the MSME suppliers when they get their bill discounting done on the TReDS platforms. So we want to see that the final purchasers from those MSMEs, are they our existing clients or not? So we decided that we will gradually move from if there is a TReDS discounting facility available, and we are not part of the consortium or we are not lenders to that entity, we would like to move into their consortium. We would like to move, even if they are into multiple arrangement or sole, we would like to take their exposure in their normal credit also, whether a term loan, working capital, so that we can have more visibility on how that entity is performing, not just leaving it to doing TReDS business all by ourselves.
We should have TReDS along with other business also. So that is one. Second, we wanted to centralize and improve our underwriting in the MSME segment also. Two things we did, CMR 1 to 3 up to CMR 10. This is what TransUnion CIBIL is assigning ranks to MSMEs from INR 10 lakhs to INR 50 crores. And we decided that CMR 1 to 5 below which no underwriting will happen in the MSME segment. So this was decision number two. So we have been pursuing that. MSME TReDS bill discounting has been centralized from now on. Zones, 50 zones are not permitted. We want to centralize the portfolio, do seamless. There are two more discounting platforms which have been approved by RBI. We have signed with them also. They have also been onboarded. So there is a lot of potential to grow, but we want to have share in their normal financing.
So, this rebalancing, and if you see my September 2025 MSME growth would have been sub-optimal two, three, 4%, but we have grown now year on year 8%. So now that impact, what rebalancing we have done from December and onwards, I'm going to get to the same level of double-digit growth. But we are mindful, as I said, of quality. The borrowers that are entering into my system, how comfortable we are with them. And yes, they are a very profitable segment also. So we don't want to exclude any of that part of business coming into the bank balance sheet. So this is all, I think, from my side on this MSME rebalancing.
Regarding agriculture, your question on agriculture ancillary activities, this book is growing, and that is mainly food processing-related activities like rice mills, dal mills, and all that, and farm credit, there is a degrowth. This is a segment where we have experienced some stress, so that's the reason we are not going very aggressive in this particular segment.
Okay, and the last one on other expenses.
Sir, with regard to other expenses, various factors are impacting. Like, we have opened around 165 new branches. That is also considering the additional business giving expenses are also increasing. And second is also revaluation depreciation is there. Since last year, we have revalued some of the assets, and that is why the depreciation is also increased. And also IT CapEx expenses we have done. So on that part also, our depreciation is also increased. So that is why other expenses are showing, but on YoY basis, we see 11% increment is there.
So in terms of the continuing for other expenses, I just was wondering if there is one-off this quarter and it is going to normalize subsequently. Is there a one-off that?
Yes, sir. Any one-off element is there? Is what being asked. You want to explain what is that one-off? Otherwise, I will take that.
It's a PSLC certificate commission.
It's a lending certificate.
Some PSL certificates in this rebalancing is what the team is saying, I think, INR 20 crore?
INR 63.
INR 63 crores. That is one-off transaction that has happened in this quarter. Now we have come out of that. In terms of new branch opening, what is our experience? Because we are doing this, almost 500 branches have been opened in the last three to four years. In this year, 116 in this FY. We are going forward with our plan to open complete 321. While knowing that there will be first some increase in the OpEx, the experience so far has been that the new branch that we have decided to open after a very scientific exercise down to PIN code level, trying to decide where two things must be happening. There must be existing banking business potential, and that center is also growing at a good growth rate. If these two conditions qualify, we decide to open a branch there.
For a branch in one center, we have even gone to see which is the PIN code within that center where we should open. Typically, you would see a branch that a city is growing in one side, so we will not want to open our branch in a side where nothing is happening, so doing it very scientifically, we have decided this list of 321 branches, and what our experience is when we are opening branches in potential growth centers of the country, we will see that they will break even also very fast, and whatever branches we have opened in the last three to four years, we have been very closely tracking those branches, so the branches which were opened three years from now all have turned profitable. Branches which are opened between two to three years, 60% of them have converted to profitable.
So incrementally, what is happening while I do incur some OpEx in the immediate, but incrementally, what the new branch that has opened is giving me revenues and profit, it is more than offsetting the cost. So we are not at all bothered about increasing our expenses on account of new branch opening. It is only this one-off item which is there in this quarter, which will of course not be seen in the next quarter. And very critical, the other metric, if you look at cost to income, knowing that I've been doing 37%-38% cost to income for a couple of quarters, but since we are opening branches, we were mindful that some OpEx will go up. So my guidance has been maintained beginning of the year to maintain it below 40%. But if you see cost to income, today also it is 37.19%.
Cost to income is also, which is almost, I should say, best in the industry. Even private banks don't have that metric.
Certainly, certainly, sir. Thank you for all the responses and wishing you all the best.
Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Mr. Nidhu Saxena, Managing Director and CEO, Bank of Maharashtra, for closing comments. Over to you, sir.
So I think not only this quarter has been good, but the other element, which is the consistency in the result getting delivered, is also something, an element of comfort to the management. And I'm sure investors as a community must be looking at that. And also going forward, the kind of branch expansion that we have been doing in potential centers of the country, I think this kind of high double-digit growth for the next three to four years, very clear visibility is there, is going to be maintained in the system. We will keep growing because these branches, 321 doesn't end. We have board approval to open 1,000 branches in the next five years. We are doing it in two phases.
The first phase, we have taken up for three years, and we took help of an external expert to help us use a lot of scientific data points and tell us which is the center. And they have done a lot of work around the CIC data that is available, RBI data using their own algorithms. And they have come and told us very scientifically that in the center, at this PIN code, is where the bank should have its next presence. So I think this new branch expansion, which is happening, is going to sustain this fast growth rate also. And we will remain mindful of the profitability part of the business.
It is not mindlessly growing the top line, but any corresponding growth in the top line, how it is impacting our bottom line, we will remain mindful on that and see that not only growth metrics, but our asset quality, profitability metrics, our capital adequacy numbers, all are getting consistently delivered. Thank you.
Thank you, sir. On behalf of Bank of Maharashtra, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.