What is your outlook for demand over the festival season?
We expect good demand, led by retail lending and consumption-linked segments. It has already started picking up. The festival season has just begun, so we will know how it compares with last year only as it progresses, but the start has been good.
Your treasury income fell by 68.5 per cent during Q2FY27. How do you see it shaping up from here?
The pressure will not continue for long. As yields ease, treasury income should improve, and we will recoup what we have booked.
Your forex income was also down. Do you expect it to recover, and what impact do you see from the Reserve Bank of India's (RBI) new directions on forex derivatives?
The dip was common to most banks this quarter. Last quarter, we and other banks were busy garnering foreign currency non-resident (bank) [FCNR(B)] deposits, and everybody was accounting for the dollar at the same time, so there was less income. Things will certainly improve now.
Are you likely to raise your credit and deposit growth guidance for the year?
At the beginning of the year, we guided for credit growth of 11 per cent to 12 per cent and deposit growth of 9 per cent to 10 per cent. We are growing much faster than that, but we will keep the guidance as it is for now. If we keep working hard, we will certainly better it.
Where do you expect NIM to settle over the next quarter and the year?
Our guidance is 2.5 per cent to 2.6 per cent, and we are protecting it even in the toughest of times. It was 2.55 per cent this quarter. We hope to hold it and even improve it by a few basis points, but we will stay within the guidance.
Are you seeing stress in small and medium enterprises (MSME) segment, where NPAs are the highest?
MSME is 13 per cent of the book, agriculture is 22 per cent and retail is 24 per cent. NPAs are not high in MSME. Our total gross NPA is only 1.50 per cent and net NPA is 0.30 per cent, while MSME gross NPA is 3.90 per cent, against a benchmark of around 5 per cent. There is no stress in that segment, and the total stress in our book, including special mention account (SMA)-0, is only 2.42 per cent.
How are you planning to deploy your FCNR(B) deposits?
Part of the money was used for new advances and part for replacing high-cost deposits, where the difference was more than 100 basis points. I don't have the exact number readily, but every month we roll over ₹40,000 crore to ₹50,000 crore. The total was only about ₹55,000 crore against a deposit base of close to ₹17 trillion, which is not a big difference. There is also no cash reserve ratio (CRR) or statutory liquidity ratio (SLR) requirement on these deposits, so we saved 22-23 per cent there as well. All in all, there is a gain.
What impact do you expect from the new CRR requirement of 99 per cent on a daily basis?
Not much. On a full-fortnight basis, we were already maintaining 100 per cent on average. The only change is that instead of 90 per cent, you now have to keep 99 per cent every day. For those two to three days, the difference between money kept today or tomorrow is not substantial for a bank making a profit of ₹19,000 crore to ₹20,000 crore.
When do you plan to raise capital this year?
The board has approved raising ₹8,500 crore, of which ₹4,500 crore is Tier-I and ₹4,000 crore is Tier-II. Out of the Tier-I, we have already raised ₹2,042 crore. Rates are a little elevated, so we are looking for an opportune time during this fiscal and will raise the funds when we get a good rate.
 "Brajesh Kumar")