State Bank of India

Ladies and gentlemen, good day and welcome to State Bank of India Q2FI21 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an option 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 conference is being recorded. I now hand the conference over to Mr. Pawan Kedia

General Manager, Performance Planning and Review, State Bank of India. Thank you. And over to you, sir.

Good evening, ladies and gentlemen. I'm Pawan KD, General Manager, Performance Planning and Review. Good evening, ladies and gentlemen. I'm Pawan KD, General Manager, Performance Planning and Review. On behalf of the top management of SBI, I extend a warm welcome to all joining us today on SBI Q2 FY21 Admin Conference Calls. On the call today, we have with us our Chairman, Mr. Dinesh Kumar Kala, Mr. C.S. Satti, Managing Director, Retail and Digital Banking, with additional charge of State Assets, Mr. Ashwini Bhatia, Managing Director, Global Banking and Subsidy, with additional charge of Commercial Client Group IT and Risk and Mr. J. Soni Nassan, District Managing Director and Director of Finance. Before I request our Chairman to give a brief summary of the Bank's Q2 FY21 performance and the strategic initiative undertaken, I would like to read out the safe harbour statements. Certain statements in these slides are forward-looking statements. These are subject to These are statements based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual outcome may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request our chairman to make his statement now. Thank you. Very good evening to all of you friends. Thanks for joining the call today. We hope you and your family are safe and in good health. At the outset, I wish to thank all the frontline COVID warriors from medical fraternity and essential service providers who have been working tirelessly to keep the country safe and going during these times of crisis. I would also like to thank all my colleagues who have been working through the pandemic and upholding the bank's commitment to serve its customers. It's a privilege to lead an organization that has been at the forefront of many past breaking and innovative changes in the Indian banking landscape. Coming to the quarter-end date, September 20, our assessment indicates an upward movement in economic activities. Most companies are suggesting that activity levels are touching 70-80% of the pre-COVID levels. Medical registrations, including tractors, are increasing. GST collections for October 20 has crossed Rs. 1 lakh crore mark and is highest since February 2020. These are the times that the economy is recovering. At SBI we are witnessing visible uptick in the retail sanctions and the disbursements. I believe the analyst presentation is already available to all of you by now. The disbursements in the home loan as well as other personal segment loans during September 20 are significantly higher than the corresponding period of last year. Another key trend emerging during this period is that our asset quality is holding up well. Our total slippages for the half year ended September 20 including the pro forma slippages but for the Honorable Supreme Court entry model stands at 20,781 crores as against 25,017 crores of slippages in the first half of financial year 20. More importantly, we have been able to pull back almost half of these quarter two performance slippages of 14,388 crores during the month of October. Also, we have made adequate COVID-related provisions for all slippages during the quarter, and we do not envisage any pressure on our profitability should these accounts get stamped as NPH. Another important feature is the strength of our liability franchise, a key determinant in protecting our NIM, even in the falling interest rate scenario, as we have been able to raise adequate low-cost deposits. We have added almost about 1,85,000 crores of savings to NCH deposit on a YOY basis. We could also raise Tier 1 and Tier 2 capital to the tune of almost over 20,000 crores at benchmark setting rates. We can proudly say that SBA is 81, offering may well have revived the 81 market in India. Now before we go into the numbers for the quarter, allow me to give some perspective into the long-term fundamentals of the bank and how the results should be read in that context. This is an institution unmatched in scale and with challenges that may not have been relevant to most other players in the industry. Even though we have been the dominant incumbent in industry, we have harnessed our opportunities to evolve, transform and create value for stakeholders. For example, let me take you through our revolution in retail lending. At our high base, we have grown the retail book at a cover of 20% over the last 20 years. Today, we are the largest home loan provider in the country with very low risk rates. Loans to salaried first-time home buyers primarily. As you would recall, SBA book on the moratorium was just 9.5%. And the collection efficiency that has been witnessed is at an impressive rate of 97%, excluding agriculture. This indicates that the profile of our loan customers is very strong. Another shining example of our adapting to changing times is evolution as a digital bank through UNO. We have registered user base of more than 28 million with close to 6,000 customers registering daily. We have a loan portfolio of 25,000 crores and a deposit portfolio of 60,000 crores which has been mobilized through UNO. We are certain UNO will create significant value for all our stakeholders. The past three to four years have been a blip on the radar of Indian banking industry which went through the most difficult phase of corporate asset quality cycle. However, we took our out strong interventions to address the issue like improving our credit lender rating standards and managing risk profiles across asset classes. The returns have since started improving and we are saying that we will see better ROE and ROE numbers in the near future. Another major achievement for the bank has been the evolution of its subsidies. Subsidiaries are also the leader in their respective illnesses. All these subsidies have world-renowned partners and top of the board corporate governance and processes. Coming to the quarterly performance, our net profit for the quarter stands at 4,574 crores, which is actually an increase of almost 52% on the YOY. Operating profit for the quarter has declined slightly, but that is due to the one-time income of 3,484 crores in Q2 FY20 and 1,540 crores in Q2 FY21 for stake sale of SBLI. Excluding these one-off items, our operating profit has improved by about 12% by YOY. NIM for the quarter at 3.34% has improved by 12 basis points, YOY, and 10 basis points over the previous quarter. Retail personal advances have grown by about 15%, YOY, despite a difficult first quarter, which indicates a strong rebound in the second quarter. While there are clear signs of rebound, it's early to conclude on the possible final impact of this once-in-a-lifetime pandemic. We are watching the evolving situation very carefully and building a pedigree cushion to absorb the impact without any volatility in our P&L and balance sheet. I'm sure you must have gone through the numbers by now and must be having few queries on those numbers. I think it would be good for me to open the forum for questions. Thank you very much for attending this analyst call. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, you may press star and 1 on your touch-tone telephone.

If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. Anyone who wishes to ask a question, you may press star and 1.

Are there anyone who wishes to ask a question? You may press star and one. First question is from the line of Maruka Jania from Millara Capital. Please go ahead.

Yeah, hello. My question is on collection efficiency. So could you break down collection efficiency of the MORAT and non-MORAT book? And also definition, is it September collections upon September billing? Or would it include overviews of past months as well?

Well, Maru, I think when it comes to collection efficiency, the way we have looked at it is it is the proportion of accounts where the payments are coming in. And we continue to see the, actually this payment is in the context of what demand we have raised. So which means that whatever EMIs are due and how much payment we have received. So the comparative position of the two has shown up the collection efficiency. So when it comes to the moratorium and non-moratorium book, we are not really tracking on those lines. We are tracking for all the accounts, whatever EMIs are due and how much we have recovered. That is something which we have compared and that is what has led to this 97% kind of a collection efficiency which we have shown.

And that 97 is of September, correct?

This is for the quarter.

Okay, for the quarter. Alright. And what would be the, would you have any rock number for October?

I think October would be in the same range. I don't expect that it will... It is slightly... It is actually slightly better. It has improved to 97.5.

Okay, sir. Sir, I am just... So, why would the MSME and IGRI NPS have risen this quarter sequentially? And wouldn't some of the MSME NPS... Wouldn't you have been able to save them with the ETLGS?

Well, you know, Maru, when it comes to our NPAs, just one second. When it comes to our SME book, there, of course, it is, I would also like to mention that out of this 14,000 dot crore that we have reckoned as the possible slippages, we have already pulled back about 6000 crore and in SME also we have pulled back about 3000 crore so actually as compared to 5486 in the month of I mean in the first half of 20 in first half of 21 we are showing it at 6068 but de facto in the month of October it has come down to about 2400 2500 crore kind of a number so we have actually pulled back SME and also On the Agreebook also, it was that 9,513 as on September 30th, we have actually pulled back about 1,100 crores. It has come down to about 8,400. In Agreebook, the fact of the matter is that during the COVID period, there was some kind of a restriction on the mobility of our field staff and they could not visit the field and have their accounts reviewed or renewed. That is one of the reasons why we have seen this kind of a slackness. But I'm sure that as the unlock is happening, the ability of our field staff to reach the customers will improve, and we should be in a position to improve the agri-quality also going forward.

Okay, so my last question again is on collection efficiency. So have you seen any segment-wise difference in collection efficiency? Like have you experienced that the collections in, say, maybe the personal loan segment are better than mortgages? Any sort of differential that you could comment on?

Maruk, when you have 97.5% efficiency, the difference is very marginal right if you really ask me the highest collection efficiency is in our unsecured personal loan for obvious reason because we give only cost and salary factor total so in home loan slightly lower than the personal loan ok sir thank you so much ok sir thank you thank you very much next question is from line of Adarsh

from CLSA, please go ahead. One question I had was on the operating expense, the employee provisions If it has gone up in this process, you have to understand are there any run-off because we are having very strong NII and courses bounce back but a lot of that goes away in the employee provision. So if you can just tell what, if there are run-offs, what is it?

There is actually a run-off which is and that run-off is essentially coming from the fact that earlier we had made the provision at the rate of the salary increase of 10%. But somewhere at the end of September, sorry, end of June or maybe August, we could have the visibility of the revised salary negotiation at 15%. So last quarter also we had provided the difference of 15%. About 1,000 crores were provided in the last quarter. And this quarter also we have provided another 1,000 crores. And also the related expenses relating to salary costs. about 600 crore which is essentially on account of pension provision, maturity provision etc. has also been provided. So about 1600 crore is the additional component which you have provided for. So if you look at the provision for employees, it has gone up from about 4545 crore in the month of, in the second quarter of financial year 2022 to 5637 crores. in the quarter 2 of 21. So that is the reason that why we have seen this kind of about 1600 crores on account of these one times.

Is this one time or will this continue in the third and fourth quarter? Does it start next year? How is it going to do this?

See the point is that when it comes to this increase in salary on account of ID negotiation, this is only one time and it will stop. But yes, of course, there would be going to be an increased salary bill which will be about 200 crores a month would be an increase for the for the attributes for a month about 200 crore a month so which means that about 600 crore a quarter would be the additional cost got it but it's going to be lower than the runoff certainly certainly yeah so about 100 crore would be something which will be which will be runoff

So the second question was, when we go through the slide that was given on the 60,000 crore of expected infrastructure in . These are like, in the second half, going to be 20,000 crores.

And in the first, you know, so that looks a relatively very low number compared to the kind of pandemic we had. I appreciate your comments on .

but it's still a very low number less than a percent of problem in the second half when all the accounts will start paying all the installments so is that a very aggressive number a cautious number because you know that's that's the theory you know if that happens it will be a big positive surprise okay i think when it comes to this

I would like to draw your attention to the fact that in the last quarter when we had provided for the loan loss at 9,420 crores, we had actually made a provision for one of the housing loan companies for 3,420 crores. So de facto that provision number was 6,000 crores in the last quarter also. This quarter, this number, comparable numbers are 5,619 crores on account of loan loss and other provisions. Actually, the provision which we have created in this quarter of 4,083 crores, we could not have shown as a loan loss provision because we have not really sent these accounts as NPA under the directions of the Honourable Supreme Court. So that is why we have kept it under other provisions and if we add these two 5619 plus 4103 it will come to 9700 crores and if you compare it with 6000 which we had made in the last quarter this will come to about 60% more than what it was in the last quarter. Now your question relating to this 20000 crores whether it is something which could be a reality. See, our provision coverage ratio in the corporate book stands as high as about 88%. As far as the negative book is concerned, we have already taken care of to a greater extent. I don't expect that we'll get to see some surprises. So that is something, and in the past we have seen that our average slippages are to that extent of about 10,000 code. That is a normal run rate per quarter. irrespective of the kind of book which we have, we are still hoping that our slippages will extend to 20,000 crores. And that is one of the reasons why when it comes to slippages plus restructuring, we have identified this number at 60,000 crores. And if you really look at it, we have to make a provision of 15% on this 60,000. The total provision will come to about 9,000 top crores. And we have already provided for 7,091 crores. So with the 7,091 crores, we are de facto left out with the requirement of less than over 2,000 crores. And we have got two more quarters to go. So I think overall, we have tried to assess the situation well. And as a strategy, we have decided that we should provide for upfront. That has been our policy, and we have stuck to that policy. If I can comment on this? Yes. let's just look at the numbers to see what we are actually saying that the 15,000 course would be an additional restructuring book the 6,000 course we already have the restructuring thing 15,000 course would be this extra three pages so the interface guidance and including restructuring would be 2.5% and what we have done in the cost rate book is that we have done a very granular analysis went to the relationship manager level and ask them to look at their accounts and give us feedback in terms of what is what is the status of their account this is from the ground lab kind of assessment to give you comfort it is not that you know it is a top driven thing we have taken the feedback from the operating level and consolidated

And the last question is, we did have a pro forma which we didn't spend because of the . Are the NIR reversals accounted for in the NIR account, you know, if you could tell, because that had agony, which you had a lot of reversals.

that amount is about 876 course we have identified that amount but we have not done the reversal and if at all we reckon this amount also it will have an impact of both five basis points on the name so that will come in the first quarter right once you recognize all of it that's it account is stamped yeah because yeah because unless until account is stamped the reversal cannot really happen. So that is the reason. You have to wait for the Supreme Court judgment. The reversal will be as I was mentioning that out of this 14,388 crores, we have already done a fullback over 6,000 crores. So for all purposes, there's a likelihood that this URI also may not have so much of impact. It could be about 50%.

Thank you very much.

Next question is from the line of Jai Mundra from BNK Securities. Please go ahead.

Hi, sir. Good evening and thanks for the introduction. I had a couple of questions but is there on your BSP notes to account wherein we have mentioned this the notes to account 12 where the 8 lakh crore number is there in the moratorium slash deferment line item so I believe this is the number which internally system has earmarked those accounts as moratorium right Just to clarify on this, the State Bank adopted an opt-out approach. So technically all accounts who are eligible is treated as provided with moratorium. So the statutory disclosure which is appearing in the notes to account will be for the entire book. But as you would know, we have tracked the moratorium only on the basis of the payment track record. As per the payment, it was only 9.5% as we dispersed in the quarter one, and that moratorium is also now over. So the 8 lakh crore has to be seen from that perspective that State Bank did not use opt-in, but used opt-out. So the entire retail group which was eligible is appearing there in the notes to accounts. So that is not a number which was actually under moratorium. Right, so the question comes now that if an account which system has tag as moratorium and because there was no demand which was raised till August end and now in August when the demand has raised for the month of September and the person has already created 3 or 4 installments then in collection efficiency in the numerator does this 97% add 4-5 PMI in the numerator and denominator is the only September one which is raised? Thank you you asked this question let there be no confusion when we talk about collection efficiency it is a demand for the month and collection for that month so it does not take into account installments that were prepaid earlier not only that what he is saying that during the moratorium there was no demand but the demand is not raised for the moratorium installments, when the moratorium got over by 31st August, when we talk about the efficiency, collection efficiency, we are only talking about those installments it's a payment, yes, not if somebody exercise the moratorium and not, you know, is not due to pay, those installments are not paid. So that is very helpful. So in your 97% number, there will be no segment of customer where collection efficiency is more than 100%. I mean mathematically it could be 97% but at individual customer slash segment level, it will not be more than 100%. I can clarify this what you are trying to say is that some customer may be paying more than the demand whether it is reckoned in the collection efficiency it is not the way in which collection efficiency is determined is demand in each account and whether that has been serviced or not if it is not serviced then it will appear in the DPD the DPD is over 0 7 days as you know is SMA 0 and you have SMA 1 and SMA 2 So we track it from the non-payment in the individual account. If some customer has excess free, that number is not going to offset somebody who has not paid the installment. Right, right. So that helps. Thanks for this clarification, sir. That's very helpful.

The second question is, sir, so in this case, just to extend this, Most of the customers then would have paid in full, right? I mean not this 97% would include some of the customers which may have paid in part.

If you would have that number, so let's say 80-81% are paying in full and the rest are paying in part, would you have any such of number? I think another, just to give more clarity, this 3%, when we say 3%, 97% there is a 3% gap, right? These 3% are the ones where the DPD is 7 days to 89 days. So if this is answering your question, it could be somebody who has paid the two installments and not paid one installment. Or somebody has paid one installment and not paid two installments. Every one of them has been covered. When you are saying 97%, that means, you know, the DPD is zero in these cases. Right. Thank you sir, thank you so much. Yes, it is very clear sir and it is a very detailed disclosure that way that we are not taking the arrears and neither the more than 100% for any customer. And if I can ask one more question sir, on FMA 1 and 2, as N.D. sir also mentioned that corporate and SMA probably they are out of stress zone so maybe the SMA 1 plus 2 number that go to will seem it may not be reflective of stress because anyway higher than 5 crores customers are reasonably well placed and some of the banks are showing the total SMA plus 1 plus 2 number including all ticket types if you have that broad range also that will be helpful thank you no we can provide you that number because as of now we will ensure that it's made available to you sure thank you sir and all the best thank you thank you very much thank you very much next part seven is sameer b from jm financial please go ahead yeah hi sir thanks for the opportunity uh just wanted to ask what are the disbursements under the equity guarantee scheme ECGLS. ECGLS has a total investment of 22,000 crores and the total sanctioned is 25%. Okay, thank you. What is the total system number? Thank you. Next question is from the line of Ashok Ajmera from AgCon Global Services. Please go ahead. Thank you for giving me this opportunity. And congratulations to you, Khara Saab, and welcome to you. The bank continues to be in a more stronger, good hand. And at the same time, congratulations to you for giving a very good result, even in this difficult situation. Having said that, sir, I have a couple of observations and some questions. Now, taking this last question, I mean, last report question continuously, Further, in case of that moratorium, which was provided on the working capital interest, where the borrowers were announced to pay it any time up to 31st March 2021, up to August interest. Sir, can you throw some light on that? How much was that amount? And out of that, how much percentage or amount is regularly being paid from September onwards? And how many of them have opted for a payment up to 31st March 2021? Thank you very much, Ajmer sir, first of all, for all your compliments and congratulations. your specific details relating to the moratorium and how many accounts are in the moratorium and have you opted for payment till March. I will sign to that required information. Especially on this working capital only because others are the monthly installment or quarterly installment. But here the option was given to pay the entire amount up to 31st March 2021. So whether it comes in your demand or when you talk about the efficiency or this amount was not demanded and the option was left on the borrower. It was forming part of the demand. and when I think when it comes to collection efficiency we are reckoned all our portfolios but for agriculture. Agriculture is the one which is not subject to demand it is on account of the seasonal repayment but for that we have reckoned all other segments. So it will be forming part of the demand but that specific information we perhaps are not heading right now maybe we will have it more likely. No issue, sir. No issue. I'll take it later. Sir, on this new restructured circular of August 6th, I think, what is your experience? I mean, how many people? Can you throw some light on that? How many people or how many borrowers are approaching? Because this restructuring plan has to be almost formalized by 31st of December and implemented by 31st of March 2021. So what is your experience of your people coming forward to take this restructuring facility? As of now, when it comes to the restructuring of advances, the number of customers who have approached us for restructuring, in all the number of accounts are 42,000, but when it comes to amount involved, it's just about 2,488. That is on the retail side. And almost about 4,000 is an amount for the commercial clients group, including, I mean, the the corporate how much how much is that sorry to interrupt you uh the commercial group how much uh uh i mean corporate accounts will be about four thousand dot crore and the retail book is just about 2500 crores so that is the amount and uh that's how it is it is stacked up to 6495 crores so it's it's very bigger compared to your total so so only uh so so I mean, it shows that the people are not, I mean, very encouraged to go for this restructuring. Rather, they would, they feel that some kind of stigma will be there if they go for restructuring. That is what is the general feeling among the people. And that is why they are not coming forward. My next question is that when you said that retail, this thing, on the retail only, if you look at the segment-wise results, While the revenue of retail is almost the same, 19,000 odd crores, the income from the retail business is only 1,000 crores against 5,000 crores in the last quarter. 4,900 against that only 1,030 crores. So is that there is more provision in the retail book or I mean what is the reason of such a big difference in the income in the segment while reporting? Which page you are referring to? Sir, note number 5, I think segment wise reporting, you know that the next page of your results where you report segment wise reporting, like your wholesale book, your retail book. So actually the fact of the matter is that our CD ratio is just about 61%.

So basically, sir, it does not include transfer time, so it won't be representative of the results, you know, in detail.

Thank you very much.

I'll request you to come back in the question queue for a follow-up question. Next participant is Anand Madda from HDFC Mutual Fund. Please go ahead. I just wanted to have clarification on the employee cost side. You said 1,000 crore was one-off cost. Of that, 600 was in the employee pension provisioning and balance was in the employee salary line. No, actually it was not 1,000 crore. It was 1,600 crore is a one-off, which is about 1,000 crore is on account of the salary increase. which has been negotiated and about 600 crores are the long-term benefits which should be available to employees post the implementation of this with negotiation. This run-off income salary cost won't be there from Q3 onwards or will it continue for Q3 and Q4 as well? See, run-off will not be there, but yes, of course, I mean, consequent upon release of the increased salary, the salary bill will go up and it should be about 200 crore per month. For a quarter, it will come out to about 600 crores. So from Q3 onwards, employee cost should come down by 1000 crore to be? Yes, absolutely. Absolutely. And sir, if you can give some color, like this quarter we have some recovery from internal process of 1500 odd crore rupee. How do you see this trend in the second half? Also on resolution of some of the larger accounts which are pending, one in the steel case account, we keep on hearing that Supreme Court will be hearing the case. If you can give some update on that account as well as on other resolution in the NCID. We have seen some visibility in this quarter itself. one of the account has got resolved and also when it comes to the other seal account of course there is a matter of course I will not be in a position to hazard any guess and when it comes to what we are also attempting is if at all we can have the compromises activated and for that efforts are being put in. As far as the NTLT process is concerned I expect that by the end of this calendar year Perhaps this embargo will be lifted and we'll have a better visibility going forward in terms of the revolution to NCLT also. Now what we expect is as far as the recovery in the remaining half of the current financial year. In the first half we have seen the recovery almost 4,000% growth. Maybe we might get to see a number which is about 6,000 to 7,000 crore in the remaining two quarters of this current financial year. Because what has happened is that we did not see much of activity in the first quarter when it comes to recovery. But yes, of course, we have seen better traction in the second quarter when it comes to the numbers that are there with you. So we expect that it will further get accelerated in the remaining two quarters and we will get to see better performance on the recovery frame too. Sir, on the same question sir, you said two 7000 code of recovery from return of assets in the second half. Not return of, I am only saying that whatever is there in the stress assets group we are expecting which would also involve the references to MCRT and which will also involve our efforts to resolve through compromises. Part of that will be from NPA movement and part of that will be from recovery from return of assets. Yeah, that's right. And this includes the steel account dissolution as well. Yes. The steel account and then the housing finance account. Yeah, that's right. Okay. Thank you so much. Thank you very much. Next question is from the line of Nagarkada from DSP Investment Managers. Please go ahead.

Hi sir, thanks for the opportunity. Two questions. First is on the corporate book. So if you look at slide 27, the rating profile of corporate book A- and above share has come down to 75% from 78% last year and similar level in FI-19 as well.

Just what's driving this downgrade, if you could highlight any specific sectors where we've seen major changes. So that is the first question. And related to the corporate book also, if you could comment a little bit around project pipeline and the growth potential that you see in the next four to six quarters. Then the second question that I had was on the Express Credit portfolio. So when we look at the Bureau data, things are gradually recovering, but in our case, the September growth was significantly higher than pre-COVID with 50% less kind of pension growth. Just if you could give some comfort around this unsecured portfolio in terms of share of government accounts or any other cut that you can provide to help us understand what kind of customers are we underwriting in this portfolio. So when it comes to the corporate book and the rating profile, it was about AA and AAA were about 60% and from there it has come to about 57%. I think on account of the financial position of these corporates and there is nothing per se which is there. When it comes to the visibility of the demand from the corporates, I would say that we expect the loan book from the public sector undertakings to really go up in the remaining two quarters at least and we are seeing some sanctions but there is always a lag between the sanctions and the disbursements. So that is something which you will get to see going forward. And when it comes to the home loan book and also the retail book, there in the personal segment as of now, our 94% of our personal loan book is from the government servant. And we have got about one and a half core kind of the salary accounts with us. And current penetration level is just about 19%. We expect that we can easily take it up to 25% which means that there is a clear cut scope for another 30,000 or so when it comes to the personal loan book and we would like to really tap this potential in the current financial year itself. And also the fact of the matter is that this personal loan when we offer it is linked to their salaries and as and when there is an increase in their salaries their entitlement also goes up. So that also gives us an opportunity for showing up our personal number going forward.

If I may just add one more point, overall in our retail book what would be the share of government employees if you would have that number, approximate number?

In our retail book when it comes to I think in the home loan segment it would be about 50% would be the salaried employees. and the remaining 50% would be... 50% would be government sir and 20% would be the validated corporates and 30% would be... Actually for all corporates about 70% would be the salaried whether it is from the government or from the validated corporates and the remaining 30% of the book will be essentially coming from The only thing which I would like to also add here is that invariably our home loan borrowers are the first time home loan borrowers and the average ticket size is not very big. So invariably they ensure that they are in a position to meet out their obligation towards keeping it as a home loan.

Thank you.

Thank you. Thank you very much. Next question is from the line of Amit Brinchandani from UTI Mutual Fund. Please go ahead. Good evening, sir, and congratulations for the appointment. Sir, again, the question on expense credit. So you are saying this 32% of IOI growth and expense credit is with the kind of organic in nature without any declassification, so there is an increase in demand for these kinds of loans on a viable basis? As I mentioned that, you know, if there is something which is linked to salary, of course these are unsecured loans, but we have got a check-off facility available, so to that extent we are quite secure in this loan book so long as people are getting their salary that is something which gives us an assurance as to the quality of this loan book is concerned. To understand it is linked to salary so a person who needs to apply for that loan and then he gets a loan right it is not automatically working capital community which gets increased. It is automatic facility. Only one thing which you have done is a pre-approved personal loan which is actually we are running an algorithm and with the help of Animatics we are only finding out the possible people who can be eligible for this loan. But as far as loan is concerned it is only dispensed only on applications. It's only a means for sourcing the better quality loan and nothing more than that. People have to apply. Almost 15,000 crores have slipped in this quarter if you set aside the Supreme Court's pay. Can you explain what is the issue on the agreement? I would like to mention that also this 14,388 crore which you are showing in the additional performance liquid is almost about 6,000 crore were pulled back in the month of October. So that way it is just about 8,388 crore and when it comes to your specific question in terms of the segment where it has seen In case of SME also, Out of the 6,000 crore which is seen as on, no sorry, for the quarter ending, quarter two, out of 5,078, almost 3,000 crore we have pulled back. And agriculture out of 9,045 crore, we have pulled back about 1,100 crores in the month of October itself. So if you compare with this 5,078 crore with, if at all 3,000 crore is pulled back, it is 2,078 crore in SME. In case of agriculture, yes, of course, I think there is a scope for improvement. And that is essentially on account of the fact that in this quarter, the renewal and the review could not be done as it should have been done because on account of COVID, the mobility of our field staff was a bit restricted. But that has been ensured now in the month of October. We have already seen about a long-winded COVID pullback. And when it comes to the cockpit, the book has always seen the reduction. And what I think is also, but also we have seen the pullback. So I think almost about out of 828 crore which is seen, almost about 828 crore has been pulled back. So I think that's how the complexion is. And also let me also share with you, It so happens that because of this order, interim order of the Honorable Supreme Court, we were not allowed to stamp these accounts as NPA. Otherwise, we have got a rhythm over there in the branches where the moment the account gets stamped as NPA, immediately, or maybe if at all it is, it is stamped as SMA-1, SMA-2 also. Now the people on the ground immediately get into the recovery effort. So that is something which could not be done because there was no visibility of these efforts getting into stress. So that is the other thing which gives us the comfort that to bring forward, we should be in a position to maintain this asset quality. Sir, and we, you have given very interesting chapters of ROA and ROT of the banks from 2015 and 2014. I'm sorry to interrupt you. Your voice is breaking. Sir, you have given a very interesting chart on the ROA, ROE trajectory of the bank in 2000 to 2016 period and what happened post that.

So just to take it from there, do you think that we are likely to move or what is the management purposes behind it?

We are hopeful because we have already seen an uptick and also the strengthening of processes which have taken place when it comes to the corporate underwriting. This gives us a confidence that maybe going forward we'll have the trajectory which will move towards the earlier trend which was seen. Maybe, I mean it could be difficult to predict that whether it could be by the end of this or maybe in the next year, but it's a concerted effort on the part of the management.

Thank you very much. Next question is from the line of from Nepal, India. Please go ahead.

Hi, good evening sir. Congratulations on a good quarter on your appointment. A couple of clarifications and one question. One clarification is to an earlier participant, you mentioned that including the one last year account and housing finance company, still our second half recovery will be around 6,000 to 7,000 per year.

What we understand is... I must say it is not housing finance, it is... Both of them are not doing this. Sorry to interrupt. Both the two accounts which you are mentioning are not part of the 6000-7000 what Kemal mentioned. This is a clarification on the earlier question also.

Sure. So it will be in addition to the two large long T recoveries and 6000-7000 over and above that, right? Perfect. And secondly here, on the agri-bid, we've seen a far higher slip this quarter. Some of it would be like an overflow from the first quarter, which is generally high on agri. But if you could just talk about, is it because purely the repayments are not EMI-led in the agri-portfolio, which is crop cycle-related? So will that pull back be stronger in this quarter? And also from going ahead, the overall economy has done reasonably well. So can we expect the second half of the 20,000 crores? Agri will not be a large part of that 20,000 crores. Is that fair to you?

Actually, yeah, what you said is right, because what we are likely to see is that Agri, you know, part of it is a recovery and part of it is also the renewal of the accounts also. So if at all the account is not renewed, then also it is actually tagged, at least the downgrading of the asset. So that requires the review and the renewal on the ground. So that is something which you'll get to see in this quarter and going forward also. So hopefully, we are quite hoping that maybe we'll get to see a much better picture in the end.

Sure. I think the second point is on our corporate loan book. Are we seeing, like, are we able to be in line with the top banks when it comes to corporate in terms of market share incrementally? Because there are a few large private banks that are working reasonably well when it comes to corporate business. Are we able to, obviously on the rates we would be, but on the growth side, are we able to match them?

not from a percentage perspective but on an incremental absolute perspective are we able to match at the last private bank when it comes to their growth rate because they have got a low base maybe they will see it and we have got a book which is already stacked up and we have got so as of now i think if i may if i may say so if they are probably eating into the market share of the public sector bank And that is generally what the trend we have seen on the ground.

Sure. And the last question is on Yono. So we received an interesting couple of slides on how Yono is contributing to the overall bank. If you could just talk about how is the profitability calculated or how do you think about Yono adding value to the overall bank in terms of cross-sell or better servicing of the customers, converting customers from dorming to getting them on this platform and addressing the younger population of customer base that we have. So could you just talk about that? Thank you.

Yeah, see, when it comes to Yono, we have a scenario where we are serving a varied customer base and considering that in mind, we have to have all our distribution channels in place and robust also. So to that extent, Yono helped us in engaging with the younger generation and It has been created as a support app because when it comes to younger generation, they have got very different behaviors. So that is a reason why it is beyond pure banking. And we have seen very good traction in terms of the registration. We have already about 29 million odd customers are already there with us who have registered. And we are opening about 21,000 odd such accounts on a daily basis through Yonu. which has helped us in terms of reducing our cost. The PFO personal loan, which is essentially analytics based, that also we have seen a fairly good disbursements, about $5,000 we have disbursed through the UNO. And even in cross-sell also, because it is beyond banking, we are in a position to offer the credit card, insurance, and which is one. So all kind of products are being rolled out, which are where our subsidies are the manufacturers. And it's essentially the convenience which is built in. And now we are taking, you know, beyond personal banking. We are there for, you know, agri. We are there for, you know, you know, wellness and also, you know, global. So I think in order to have the mindshare of the younger population, this has proved to be an excellent tool for us. On an estimated profitability basis, so we have made some broad assessment. I think going forward, we will probably get to see the genome becoming even more stronger. And so we'll certainly like to devise this and also build a power connect with the younger generation.

Last question, 29 million customers, what will be the average age of these customers? And obviously this will be a subset of that 48 million, 400 million customers that we have, right?

You're right. It is actually forming part of the 490 million customers who we are serving. And the average age, I don't think I have got that kind of analysis with me. But I would say that we have seen the traction across the generations. not that it is only for the younger generation. Even those who have got accustomed of using UNO, irrespective of the age group and considering the convenience, they all feel very comfortable going to UNO and doing all kinds of the banking and non-banking transaction too. E-commerce is a very important component of the UNO and we are seeing a lot of traction in the e-commerce as well.

Thank you so much. Thank you. thank you very much next question is from the line of nathan agarwan from motilal oswald please go ahead yeah hi uh thanks for the opportunity so my question is again on you know we have seen significant efforts being invested in building and cleaning up this app and so over the next few years do you see any probability or any thoughts of unlocking value in this uh digital capability that you're building

At some stage, we will certainly consider, but at the material point of time, we will certainly engage with all of you. Okay.

And the other question that I have is on the current accounts. So after the RBI change guidelines, do we see any benefit to your current account growth in the coming quarters? Any color on how much can the quantum be?

I would not because this is you know these results are for the September quarter so we have not much of uptick which you have seen because there was some timeline for implementation those current account guidelines also and it is also subject to review and it has been extended by RBI those timelines have been extended so I think we will wait and watch but nevertheless our effort is when it comes to current accounts we are actually trying to enrich our offering and we have significantly scaled up our cash management product capabilities and that will help us in ensuring of our current account base as it is.

Any thoughts on capital base?

As far as the capital is concerned, I would like to draw your attention to the slide where we have captured capital adequacy ratio we are at about 14.72% and if you look at it we have recently raised 32 bonds and even 81 also and they have been raised at the pricing which is perhaps the best and as of now we feel that kind of a growth which is likely to happen and we should be in a position to take care of that growth with our flow back of the profit, we expect that we'll have decent profit and we'll be able to progress a substantial amount of that, which will show up our capital. As far as the role mandated capital requirement is concerned, it is at about 13.10%. 12.10% is a regulatory requirement, 1% above that. So we would like to keep it at about 14% when it comes to Tier 1 and Tier 2. So I think even after meeting our obligation for some of the bonds which are falling due in the last quarter, we should be having a reasonable buffer in our capital ratios. So for the time being, we are feeling that we should be efficient to take care of our growth requirements with the blowback.

Okay, sure. Thanks so much.

Thank you very much. Next question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Yeah, thanks for taking my question. So again, coming back on this rating profile, so what we have seen in terms of the rundown in the corporate book of 20 or 1,000 crores, it's nothing to do that this rundown has been in AA category and that is leading to a relatively lower proportion. But you are saying it's largely reflecting the health, wherein we are seeing the momentum in corporate from 11% to 18%.

When it comes to this book, the major movement we are seeing only in AA from 34% to 32% and AAA from 26% to 25%. Meaning is in the triple D from 9 to 12%. So that is, these are the major factors which are, I would say that part of it could be on account of the general health of the corporates also.

No, sorry, I was just referring on a quarter on quarter number. So when we look at the June number to September, A is going down from 11% to 18%, okay, and AA is coming down from 30 to 25%. So this quarter on quarter moment which is there, is it because of the run down which we are seeing of this 20,000 crores and its support in AA or this is again like we have seen the run down from AA to A in terms of the rating profile itself?

I think just give me a minute, let me see. quarter on quarter also June 20 our AAA was 33% from there it has come to 32% AA our corporate book was at 30% which has come to 25% and A it was 11% from there it has gone to 18% so there is a slippage from AA to A and also there is slight slippage from AAA to maybe to A or to AA so that is what it looks like and when it comes to BBB It was 10% which has gone to 12%. So partly it could be on account of re-rating of the corporates also. So as such, when it comes to our portfolio, I don't think it has undergone a change, but our existing portfolio, if at all, they have been re-rated by the rating agencies, so that will be something which will be reflected in this. Another factor which influences this composition is the drawings from the accounts. Suppose the outstanding in a particular group goes down and the outstanding, because these are all highly rated companies. These are all highly rated companies and many of the AAAs don't really raise the money from the bank. They would rather go for the market borrowing. So depending upon actually, you know, today when it comes to the large corporates, it's not, they have an option of looking at the loan book plus the investment book and also For the specified borrowers, there is a requirement of raising a given amount of cash funding from the market also. So actually these are multiple factors which will have an impact on this kind of a rating movement and the portfolio color also. And this is only corporate? It is only corporate.

Okay and one more question in terms of fee income. So obviously on the loan processing side we have seen a sharp correction and across the board the overall fee income correction has been quite strong. So this is largely to do with the growth which we are seeing on the further loan side and that's the reason. So how sustainable would this be and is there any kind of a one-off loan processing which you are seeing or this is only the disbursement number which is?

No, actually loan processing charges is agnostic to the disbursement. processing charges are as and when the proposals are taken up for the sanction. So I would say that it cannot be linked up with the actual credit growth. Actual credit growth is when the disbursement happens. If at all limits have been sanctioned, so then the loan processing charges are immediately taken from the system itself. So that is how it is. And as I was mentioning that, you know, many of the loan proposals which have got sanctioned, perhaps people are waiting for disbursement as and when they will have a visibility of the demand Perhaps we'll see the disbursements also going down. And this includes both corporate and retail.

Yeah, yeah. And just one last one on express credit. So what would be the proportion of salary within that?

Our express credit, 94%. 94% is a salaried employee. Actually, it is 100% salaried. 100% salaried, but 94% of the government. Government and defense. Government and defense are 94%. 94% is government. Okay.

Yeah. Got it. Okay. Thank you. Thank you very much. Next question is from Sumit Kariwala from Morgan Stanley. Please go ahead.

Hi, sir. Thanks for the opportunity. I just had one question. Can you please share details with respect to collection efficiency in key segments? So retail, you can share that for home loans, autos, personal loans.

We will separately share. We don't have that kind of a stack up available with us segment wise, but we will certainly share with you.

Thank you very much. Next question is from the line of Rakesh Kumar from Systematic Shares. Please go ahead. Hi.

Can you hear me, sir?

I can hear you.

Thanks for the opportunity. Sir, the one question I had with respect to, you know, difference of PBO and the first value of plan assets that was close to around 14,600 crores in March 20th. so and this is all time high you know in the recent years so where are we right now on this and have we made any incremental uh you know uh have we uh any incremental provision for that i could not get your question uh difference uh between tdo and uh fresh uh fair value of planet or the terminal benefit obligations Difference was around 14,600 crores as of March 20. Where are we now? And on that, and this number was like, you know, for Graduity and Vincent put together, this number was like, you know, in a couple of years, it is all-time high kind of number. So what is the gap right now? And so just wanted to understand that.

See what happens is when it comes to the gratuitous liability we strictly go by what the actuarial assessment is and not that we have got any backlog which we have to take care. It is essentially on account of the yield moment whatever is the additional provision which has been made and as I was mentioning that when it comes to our additional provisions which we have made for employees Out of 1600 crores, 1000 crores is only on account of the increase on account of the negotiated wage settlement which has happened and which is likely to be signed off. So that is something which is there and 600 crores are on account of the long term benefits which will accrue in this wage negotiation. So that is something which has happened. So 1600 is essentially on account of that.

So can you hear me? Yeah, I can hear you. So what I'm trying to understand is that, sir, this difference has been rising. So either we make provision or we keep more plan asset for that. So what is your thought on that?

Yeah, please. I think we'll just leave it at that.

Hello, hello, sir.

What had happened is that this gap was, in March 19th, it was 95,118, and it went to 109,830. But this year, because the discount rate is at 6.83 since March and even in September, so we understand that the gap will be less this year by March 21. This is what the jury has told us. that the gap would be like less than what the gap was at March 20. Because it is a function of treating, one is the discount rate movement, the second is the pension escalation rate as well as the salary escalation rate. So pension escalation rate and salary escalation rate will remain which will require more provision. But the discount rate is the causal element for any fluctuation in this. And we understand as to the treaty that this year it will be lesser requirement in terms of the provision which is required for filling up that gap.

Understood, sir. Second, a very related question. Now we have share of alternate channel to total transaction close to around 93% odd. So why don't we free up some employees and, you know, put them into free income and all because, you know, we are not witnessing any kind of, you know, decrease in the optics either in the establishment cost or the overheads. So, like, you know, is that a possibility?

Yeah, we are actually very consciously thinking in terms of it that we are increasing our employees in occupations So we are ensuring that we should be in a position to really ramp up our sales capability on the ground, both in terms of liabilities as well as for our assets and also for the other income potential which is available across the country. So we are all geared up to tap such a project. I'd just like to supplement that in the banking we have a ratio known as tooth-tooth-tail ratio where the number of people who are in administration or control roles And the people who are on the sales roles in direct touch with the customers, this year we have been able to, say, sort of reject this equation. And around 20% people, 17 to 20% people, depending upon the different layers of administrative officers which we have, they have been transferred to the customer-facing roles. And some of the activities which we are doing, we are also centralizing and using some sort of outsourcing also. So there is a major plan for increasing productivity and increasing more revenues from the stock which will be going to the fields for marketing, recovery, and other kinds of upselling and value enhancement kind of rules. So we have a proper plan. for improving the productivity of employees so that our income stream from each employee becomes better than what it is now. Actually, we are also intending to leverage analytics to really conserve cost of acquisition of new readiness. So that is something that is also what we are planning and we will be implementing those plans very soon. Many thanks for answering the questions. Thanks a lot.

Thank you very much. Next question is from Anand Dama from MPA Global Financial Service. Please go ahead. Yeah, thanks for the opportunity.

Sir, the collection efficiency that we have mentioned of about 97% is it only for the town loans or basically this covers the corporate, the SME, the working capital, all type of loans? It covers all type of loans but for agriculture. But for agriculture and this 97% is in value towns. Yes, that's right. Okay. So, is it possible to share the SMA 0 number and SMA 1 number? We don't, we count in terms of the PDE. So, actually, I think what you are saying is SMA 0 and SMA 1 for this collection efficiency.

Primarily, just wanted to understand because if some of the customers, if they are not paid, then typically they would be sitting at this point of time into either SMA 0 or the SMA 1. Maybe SMA 2 may not look that inflated, but SMA 0 and 1 should be on a higher side.

We have not really looked at it from that point of view, we have only looked at it from the context that if at all demand has been raised, whether it has been honoured or not. So that is something which we have looked at. Because again, the way we have seen the economy coming down and then

know there is a disconnect that we see in terms of collections so do you think that maybe at this point of time customers are paying but maybe next year is when possibly they will not be able to pay because there is an impact on the business which would have uh they would have actually seen uh and and so because of that possibility might come up in the next year and not this year where we are out all our space see the way i look at it is that uh it's a with the unlock situation things are improving

And going forward, I'm hopeful that it will further improve. So that is that kind of a scenario we have not yet really factored in. Maybe you would like to... Yeah, see, additionally, you must also remember what has been our customer profile. I think we take a lot of pains to explain to everyone what is our target clientele. And in detail book, why this collection efficiency is high. If you see, I think a few minutes back, in terms of our express credit, which is the unsecured loan products, 94% of the customers are from the government sector and defense. So they are basically from the corporate salary package account. And we have seen that in the last 12 months, pre-COVID as well as post-COVID, none of them, the salary has been impacted. The level of salary which is being credited to this account, we just did the analysis. In fact, there is no impact on the salary which is being credited to the account. So, we view that in future also this likely to continue. So, there is not going to be anything different in terms of collection efficiency in the retail book.

Sure. So, basically, I think retail is not really a worry for SBI because I think the book is, though it is unsecured, it is more or less secured because of the salary, the customers that you have and most of them government. My most concern is about the SME book or the business banking customers that you would have or the mid-corporates operating into the impacted sector like, you know, be it cinema, be it hotels and tourism industries and stuff. So there, how, I mean, will they be able to recover what they have lost in these past six months?

Because they have not been able to start their business. So there, actually, if you really, I would like to draw your attention to our presentation in slide 27. we have indicated our exposure to the most vulnerable sectors like tourism and hotels is just about 0.47%. Like the radiation and airport, I'll say it is at 0.47%. So I think that is the other comfort which we have when we look at our portfolio. So that is the reason that possibly we are not visualizing the kind of stress which you have in mind.

Thank you very much.

Sorry to interrupt you, Mr. Dama. I'll request you to come back in the question queue for a follow-up question. Next participant is Shagun Verma from Goldman Sachs. Please go ahead. Good evening. This is Rahul Jain. I just had a few questions. On the home loan portfolio, I just wanted to clarify the numbers. You said about 70% are from the government and the well-rated corporate, and the remaining 30% is self-employed. Is that correct, sir? That's right. And so then can you just tell us, you know, how's been the behavior on the bounce rates, zero DPD, et cetera, in this portfolio? I understand 97% collection efficiency, which is pretty remarkable, but just wanted to understand on day zero, when the payments are presented, what's the kind of behavior you've seen from these customers? In terms of product-wise analysis, we will separately share with you, but we have not seen anything significantly different in this segment. So, I think the collection efficiency product-wise, we have. No problem. So, I just also wanted to check, you know, the payments that you collect from these customers, does it get routed to NPCI platform, NACH, or you collect PDC, or it gets internally cleared with your bank? We have NSEH. We are using all kinds of options. But predominantly we have standing inspection, what we call, you know, because we have the salary account, it gets collected from the salary account. And in case of the self-employed, yeah. Self-employed, it is either NSEH or the PDC. But PDC is very small in our portfolio. So NSEH would be a large component, sir. Got it. So the other question is more in terms of understanding your outlook on two things. Number one, the interest rates. There's a huge liquidity in the system and clearly I think banks have to cut deposit rate, which is the right thing to do. Where do you see the demand of credit is going to come from if you were to take a 12-month kind of a view? Of course, I appreciate that situation is not extremely crystal clear. but based on the traction you've seen so far in the last, you know, let's say a month or two, which segments would SBI focus on, you know, in the next 12 months or so for its credit growth and what kind of credit growth are you looking at internally? As far as we hope that our retail engine will keep on performing as strongly as it has. And going forward, I would say that we... might like to see some traction when it comes to the public sector undertakings, when they will undertake their capital expenditure plan. That is the other growth area which we see. And road construction is another area where we are seeing activity. And also the renewable energy, where we are seeing the traction. So I think these are two areas which I feel are going to have, which will have a major role to play when it comes to the growth in the real economy. And I think apart from that, as we are seeing the revival of the demand, I'm sure FMCG, Pharma, they are the ones that will have the recovery also. I mean, more availment coming. But typically when it comes to Pharma, they don't have much of dependence on the bank credit. But nevertheless, I think we will get to see better economic activity. and which will give impetus to the growth in the economy. So we don't need to really, you know, be a little aggressive on the rate front, right? I mean, that is what I was trying to get to. No, I don't think so because the rates we have scaled down quite a lot and let me share with you when it comes to the investment decisions. People are not constrained by the rates. They are more looking at the demand and their ability to convert their stock into cash. So I think that is what their effort is always. And for the right kind of credit risk, we are quite aggressive when it comes to the pricing. Even on retail side, sir? Retail side, we have seen that the retail side, our ability is essentially coming from our ability to deliver and our pricing as it is quite competitive on the retail side. Correct. So the other question is on the provisioning side. So clearly I think the guidance you're providing on the stress loan formation, restructuring the slippages put together seems fairly manageable and I think a good job you and your team has done. Getting into the next year, would you have any sense as to what could be the loan losses that the bank might have to incur? Would you be normalizing next year itself or you might still want to build up more provisioning et cetera, et cetera. So any sense you would like to give us on the provisioning firms? As of now, our PCS stands at about 88%. Yeah. And we have, when it comes to our corporate work, we have started evaluating accounts on the granular basis. And wherever we are perceiving an effect, we are already accounting for as far as the provisioning is concerned. So I think this will continue to be our approach during COVID. As and when we will see some stress or the likelihood of stress, we will be ensuring that we provide for such accounts and we ensure that the balance sheet remains strong. Got it. So just one last question. Sorry for that. But for you as a new chairman, what are the top two priorities, let's say, over the next few months or quarter? Of course, beyond managing the pandemic-related stress. That is it, sir. Thank you so much. When it comes to the priorities, we would like to see that we are in a position to leverage analytics to its hilt when it comes to risk management, when it comes to sourcing awareness, when it comes to compliance. So to that extent, I would like to cut on the costs leveraging analytics. And the other very important piece for me is to see that where the patient to to reap all the growth opportunities which come away got it got it thank you sir and wish you very good luck thank you thank you very much thank you thank you very much next question is from roshan from ICICI credentialing mutual fund please go ahead yeah thanks for taking the question sir just want to understand this our sml 0 plus 1 plus 2 should be equal to 3 percent

Thank you very much. Ladies and gentlemen, we'll take the last question from the line of Manish Shukla from Citigroup. Please go ahead.

Good evening and thank you for the opportunity. On the housing loans, are you seeing good amount of balance transfer from other entities given the rates that you are offering and is that a strategy that you wish to actively follow?

Yeah, see I mean the market and being the most competitive when it comes to the product, Naturally, effort is to book the quality values, which are whatever is available. Maybe if it involves takeover, yes or no. But let me also say that predominantly our new customers who are coming to us are number one. The migration from other banks is a continuous process. Takeover also we continuously purchase.

I'm just trying to understand, last six months, is it higher than normal compared to the takeover of loans?

That is one. But nevertheless, we'll just look into it. We actually, we look at, we normally don't go to specific campuses on this, but nevertheless, if at all there are opportunities, our field staff is always on the lookout.

Going to profitability, if you have to escalationally go towards 80 basis points, 90 basis points, kind of ROA, what do you think would be your credit state credit cost when you directionally settle there? I mean, when would you want to escalationally get to 80, 90 basis points on ROA from where we are right now?

Directionally, we would like to have our credit cost, of course, less than 2. Less than 2 is something which you would like to have.

Right and last question on provisions for the first half of this year total provisions combined all together in P&L level 22,600 which includes COVID and continuity provision etc. If order of magnitude for the second half would it be similar or you expect the second half to be much lower even though a lot of charges are already taken up front?

If at all I look at it, our estimated restructuring of 60,000 crore, and if at all 15% provision is a requirement, then it will come to about 9,000 crore. And we have already provided for 7,091 crore till the second quarter. So I expect that we should have a lower burden of the provision, but much of it will depend upon how the economy evolves. Okay. Appreciate it. Thank you very much.

Thank you very much. Ladies and gentlemen, that was the last question for today. I will now hand the conference over to the management for closing remarks.

Thank you very much for your patience and also I take this opportunity to wish all of you very happy with the public and also wish that all of you stay safe, stay healthy and thank you very much once again.

Thank you very much. On behalf of State Bank of India, we conclude this conference. Thank you for joining us. You may now disconnect your lines. Thank you.