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Pawan Kedia: Good evening, ladies and gentlemen. I'm Pawan Kumar, General Manager, Performance Planning and Review Department of the Bank. On behalf of the State Bank of India, I'm delighted to welcome the analysts, investors, colleagues and everyone present here today on the occasion of the declaration of the quarter 2 financial year '26 results of the bank. I also extend a very warm welcome to all the people who are accessing the event to our live webcast. We have with us on the stage our Chairman, sir, C.S. Setty at the center, our Managing Director, Corporate Banking and Subsidiaries, Sri Ashwini Tewari; our Managing Director, Retail Banking and Operations, Vinay M. Tonse, our Managing Director, Risk, Compliance and SARG, Sri Rana Ashutosh Singh; our Managing Director, International Banking, Global Markets and Technology, Sri Rama Mohan Rao Amara, our Deputy Managing Director Finance, Srimati Saloni Narayan. Our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the front rows of this hall. We are also joined by Chief General Managers of different verticals, business groups. To carry forward the proceedings, I request our Chairman, sir, to give a summary of this Bank's quarter 2 financial year '26 performance, and the strategic initiatives undertaken. We shall thereafter straightaway go to question-and-answer session. However, before I hand over to Chairman, sir, I would like to read out the safe harbor statement. Certain statements in today's presentation may be forward-looking statements. These statements are based on management's current expectations now subject to uncertainty and changes in circumstances. Actual outcomes may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request Chairman, sir, to make his opening remarks. Chairman sir, please?
Challa Setty: Thank you, Pawan. Good evening, ladies and gentlemen. Thanks for your interest in SBI. I would like to start by thanking the support of all of our stakeholders, including our customers, shareholders, employees and the broader ecosystem are supporting us all through our journey. Fairness to all our stakeholders remains at the cuts of the bank's culture, which in turn has helped us in creating sustainable value and contributing to nation's success. Let me first start with a brief description of the present global and domestic economic scenario. The global economic outlook for 2025 presents a picture of modest but uneven recovery. The IMF's world economic outlook, October 2025 projects world GDP growth at 3.2% in 2025 and 3.1% in 2026, reflecting steady but subdued momentum amid persistent structural challenges. Regarding inflation, though it has broadly moderated across most economies, the pace of disinflation remains slow. Against this global backdrop, India's macroeconomic outlook remains one of cautious optimism, underpinned by robust domestic demand and easing inflationary pressures. The RBI projects real GDP growth at around 6.8% for FY '26 and 6.6% for FY '27. Growth is being supported by strong investment activity, recovery in rural consumption and buoyancy in services and manufacturing. The GST 2.0 reforms are expected to boost private consumption and domestic demand. On banking front, scheduled commercial bank's credit growth is slowly picking up and grew by 11.5% year-on-year. Last year, it was at the same level of 11.5% for the fortnight ended 17th October 2025, while deposit growth remains sluggish at 9.5%, which was 11.7% last year. Going forward, we expect demand for credit to continue in the second half. By looking at the trend, deposits and credit growth of scheduled commercial banks may remain in the range of 11% to 12% during FY '26. However, risks persist from volatile global commodity markets and potential spillovers from the trade disruptions. Overall, India's near-term outlook is strong with macroeconomic stability providing space for sustained medium-term growth. In the above economic backdrop, let me now highlight a few key aspects of bank's performance in the half year and the second quarter of FY '26. Our Q2 FY '26 results and of several quarters before this underscore a simple point. State Bank of India is compounding on durable structural advantages, scale with discipline, growth with quality, returns with resilience. The current quarter demonstrates industry-leading credit growth at SBI scale, market share gains in chosen segments such as current account, home loans, auto loans, stable asset quality and disciplined pricing. Our domestic NIMs for the quarter improved by 7 basis points quarter-on-quarter to 3.09%, driven by repricing of deposits. Operating leverage from technology, distribution and procurement. The flywheel is clear. Our strength in low-cost liabilities derived from our brand, customers' trust in SBI and our extensive reach. These advantages allow us to expand liabilities significantly, which are then utilized to finance strategic growth with careful pricing discipline. This focus on pricing and robust risk management supports our leading return on risk-weighted assets, RORWA. A well-capitalized balance sheet enables us to achieve top-tier return on equity, which in turn helps in compounding our book value while maintaining stable capital ratios. In this quarter, we also raised INR 25,000 crores of equity capital by way of qualified institutional placement with a demand book of more than INR 1.1 trillion. This was the largest ever QIP offering in India. We thank our investors for supporting us in the capital raise. The issue was oversubscribed 4.5x with significant interest from both domestic and foreign institutional investors. What are our strategic anchors? They are brand trust and customer value. SBI is the reference brand in Indian banking. We earn trust by creating value for customers through transparent, efficient service and optimal pricing across deposits and lending. Relationship depth drives balanced stability and lowers risk through cycles. Institutionalization at scale. SBI runs on codified processes in credit, risk, collections, treasury, technology and procurement while allowing innovation at all levels. Execution is consistent and repeatable across businesses and regions. Fair outcomes for all stakeholders is the third anchor. We balance customers, employees, investors and society. Capital is allocated where risk-adjusted returns are sound. We price risk fairly, invest in people and systems and support the real economy while protecting depositors and shareholders. Fourth anchor is liability franchise strength. I think I mentioned earlier also, our total deposits of INR 56 lakh crore, CASA deposits of more than INR 21 lakh crores with CASA ratio at 39.63%, while CASA market share, 23% versus overall deposit market share of more than 22%. This granular low-cost funding is a structural advantage and the engine for disciplined growth. And finally, the anchor, which I want to mention is leadership where roadway is attractive. We lead by a wide margin in lending and liability products with superior risk-weighted returns. We choose segments where unit economics are strong and price up are deemphasized where capital is not adequately compensated. We believe SBI is positioned to grow faster than the industry at this scale and to deliver higher ROE than the industry. We will attempt to deepen the liability engine and sustain the CASA outperformance, allocate capital to high RORWA businesses and maintain pricing discipline, use technology to lower cost to serve and lift service quality and further improve capital turns. Keeping in view a customer-centric approach, bank has launched Project Saral, I think I did mention last time also, on the 31st July 2025, aligning with this year of simplification, an ambitious vision of a complete revamp and redesign of operational processes in our retail banking territory. The aim is not only to reengineer the existing processes, but also to make the bank future-ready for the evolving financial landscape and changing market dynamics. So as we augment and enhance our digital capabilities further, Bank will shortly launch the next version of YONO platform YONO 2.0, which is not just an upgrade to the previous version but a leap forward in digital banking. With state-of-the-art journey designs and supporting tech architecture, our customers can bank with confidence and in a more seamless manner. Although the current valuations of SBI are a conundrum, considering our return on equity and growth metrics, we are confident that they will eventually align with our fundamental and operational metrics, the institutionalized nature of our business and our market leadership in the coming years. SBI's path is clear. We will defend and extend the liability franchise, grow faster than industry where RORWA is superior, institutionalize execution and deliver fair outcomes for all stakeholders. To conclude, I thank you all for your continuous support to the bank. We remain committed to rewarding your trust in us with sustainable returns over the long term. I wish everyone here the best of health and happiness. My team and I are now open to taking your questions. Thank you very much.
Pawan Kedia: Thank you, Chairman, sir, for the presentation. We now invite questions from the audience. For the benefit of all, we request you to kindly mention your name and company before asking the questions. To accommodate all the questions, we request you to restrict your questions to maximum 2 at a time. Also, kindly restrict your questions to the financial results only. And no questions be asked about specific accounts, please. In case you have additional questions, the same can be asked at the end. We now proceed with the question-and-answer session, please.
Unknown Analyst: Congratulations, sir, for yet another good quarter of good set of numbers. And I pick up your point, which you said our valuations. So here, I would like to give some comparison. Our business is now INR 10 trillion, INR 10 trillion bank for the first time and congratulations for this again, and against the Bank, which we compare of about INR 57 trillion. But our market cap is only INR 8.82 lakh crores against the market cap of that bank of INR 15.1 lakh crores. So even GNPA now almost 1.7 to 1.2. Net NPA is only 0.4. The only difference is now in, I think ROA. But for that, whether we should be so undervalued as compared to -- with a price to earning of almost INR 22 and here INR 11, INR 11, INR 11.5. So definitely, we deserve much higher valuations on our working and the way you said on the fundamental structures, our digital existence in the road map, definitely, we deserve much higher valuations and compliments to you and your entire team for this same. Having said that, sir, in this quarter, particularly, I think, -- but for that exceptional item of, I think, Yes Bank sale of shares of INR 4,593 crores, we are down in our operating profit and net profit substantially. Now one item, which I have noticed is that while the exceptional income in the stand-alone is INR 4,593 crores in the consolidated, it is only INR 3,000 crores. So it means one of the subsidiary also booked a loss of -- exceptional loss or some of the subsidiaries or maybe associate businesses. So I would like to know about that. What is that? And sir, the profitability, of course, you already said reply. Then there was a report and recommendations, which I read in the newspaper, even your own statement also that you all appeal to the RBI for making funding available for the corporates, at least listed corporates for M&A activities and the capital. So on that, any progress -- further progress? And are we moving in that direction? And is there any immediate positive results going to be there because of that? Then, sir, this quarter, we have a little bit fallen short in the recovery and upgradation numbers also, which are almost 55% or 60% lower is -- I mean, 40%, 45% lower than the last quarter. So some color on the recoveries. And one last is that the treasury has been the biggest, which, of course, in some of the other banks also. So if you look at the segment-wise results, our treasury profit has gone down by almost 50% from INR 8,082 crores to INR 4,011 crores. So going forward, for the next 2 quarters or for the FY '26, how do we look at it with, of course, second half is expected to be a little better and maybe 20 bps more rate cut might come in. So these are my few questions and some observations. You are very comfortable on SMA, NIM is good. So there is nothing much on that. And last, as generally I ask is that in the first 6 months, our credit growth is only 3.88%. Though annualized basis, you can say it is 12%. But to get the 12%, we'll have to disburse the loan of INR 307,000 crores in the remaining 5.5 months or maybe 6 months, if you take it. So how do we plan to achieve those target numbers, targeted numbers? What is the sanction pipeline or some activity which might have been done in last 1 month. So these are the -- in first round of my questioning and observations.
Challa Setty: First round is it? Okay. Thank you, Ajmera-sab, for your compliments. On the consolidation number, I think they will clarify that number. The net profit on the transaction is not INR 4,593 crores. It is lower than that, post-tax. But they will clarify in terms of what are these consolidation numbers. As far as the M&A activity is concerned, I -- more than the opportunity in the M&A transactions, it's a confidence, which the regulators have reposed are reposed in us as Indian banking system. Indian banks were not allowed to fund the local M&A transactions for so long. And the current guidelines are a matter of trust in the banking system. And as far as what SBI -- obviously, SBI has been doing outbound M&A activity financing for quite some time. This is not new to us. And we will definitely take up the suitable transactions. But current guidelines are basically draft guidelines. We have to get the final guidelines to take up any transaction. But in the meantime, we are setting up our teams to ensure that they are ready when the guidelines are released. As far as recovery numbers are concerned, I think recovery -- in written-off accounts, I think we have done fairly well in this quarter. You want to add anything...
Unknown Executive: So upgradation and recovery figure is combined. So if you see the slippage itself in the previous quarter is much higher. So if you compare it, this number is better. And AUCA recovery, Chairman guidance was INR 2,000 crores per quarter. We have done INR 2,400 crores and the guidance continues.
Challa Setty: On the treasury gains, Rama, you can...
Rama Rao Amara: Yes. I think your observation is correct. If we exclude the exceptional items, I think Q2, the trading profit is almost 50% of Q1. But we need to be reminded that Q1 has the OMO operations from RBI and switch operations were also there, which is available to the entire industry, and we have made use of, which was not available in Q2. So that was the reason why I think that the same performance we could not repeat. But there are several. I think strategically, we are doing several things. We are taking larger positions in trading portfolio. And we do have certain investments, which are like depending on the opportunity, depending on the price that is available, we will continue to offload. So that way, we are reasonably confident that a large portion of this -- whatever we have performed in Q2, we will be able to repeat in Q3 as well. No, we don't have any losses. Rather, our AFS reserve has increased actually quarter-on-quarter. There's no MTM loss. There is no MTM loss treasury side.
Challa Setty: But one thing I would like all of you to look beyond the net profit number. Obviously, the Yes Bank transaction aided us to post a good number in a difficult treasury quarter. I think what we have focused on that how do we balance your resource cost. If you have seen the cost of borrowings as well as cost of deposits have come down. And we not only have focused on reducing the reliance on the wholesale deposits where the market was going berserk in terms of pricing those deposits, we stayed away from there. And number two, that we focused on the daily average balance improvement in the current account and savings bank account. And that has contributed to the reduction in the cost of deposits and cost of resources. So your NIM uptick is basically on account of that despite that 100 basis point reduction in the interest rates on the asset side. Just to answer your credit growth, the pipeline, I think Mr. Tewari will answer. The credit growth is secular. If you see from the Q1 itself, we have had almost 1 to 2 percentage point increase across the business segment, whether you take retail personal, agriculture, SME, corporate for the first quarter after March '25, we have reversed the trend and have posted a good 7.1% credit growth. And with the pipeline, what we have the visibility of at least reaching 10% corporate credit growth in the next 2 quarters. Would you like to supplement something?
Ashwini Tewari: Yes. So the pipeline is INR 7 lakh crores, INR 7 trillion, which is a consistent number across quarters. Half of it is already sanctioned and awaiting disbursement and half is in the discussions. And the other point which has to be made is in the quarter 1 and also in quarter 2, we had a lot of payments which were a result of either a large IPO being raised or an equity raise, which was used to repay loans or sometimes converted into bonds as well. A couple of airports were like that. And then there were also the large payments done by some of the government entities, which got cash up front. So these were the reasons. But as, sir, has said, that we would expect a much better performance in quarter 3. The negative growth has been reversed. So we look forward to a better performance.
Unknown Analyst: Congratulations. Sir, I just had a few questions. Firstly, on margins. So what has been the interest on tax refunds this time for the quarter? That's the first question. And the second question is that usually, there's a seasonality in your miscellaneous operating expenses in the second quarter. This time, it looks higher maybe because of a low base. So if you can give the breakdown of those miscellaneous operating expenses for this quarter and the previous quarter, so Q2 '26, Q1 '26 and Q2 '25, so that will really set everything clear. And just the last one in terms of CASA, if you could give the average CASA growth. You said your average daily balances have been good. So any growth numbers you could share?
Challa Setty: So in terms of margins, interest on tax refund is miniscule, some INR 200 crores, INR 300 crores or something, that's not a big -- INR 340 crores. So that is not contributing any significantly to the margins. And on the seasonality, miscellaneous operational expenses, you can...
Saloni Narayan: The major hit here is actually GST on expenses, which was INR 662 crores in Q2 of FY '25, which is INR 1,180 crores this year -- this quarter. Last quarter also, it was INR 588 crores. So there's a large difference there. Apart from that, actually, software expenses for software.
Challa Setty: No, not many items...
Saloni Narayan: These are very small amount.
Challa Setty: Very small.
Saloni Narayan: Of course, they aggregate to a large number, but actually, individually, they don't add up so much. The main thing is this. And the next is the mobile banking.
Unknown Analyst: Okay. But GST, why such a big rise?
Saloni Narayan: GST on expense that we have -- we recover and pay that is taken on both sides.
Challa Setty: Yes, you get input tax credit also.
Unknown Analyst: Got it. Got it.
Challa Setty: CASA daily average balance we'll give separately.
Unknown Analyst: Sir, congrats on very good numbers. Sir, firstly, we did a very good job in recovery from written-off this quarter. It was almost doubled quarter-on-quarter. Sir, how much of that would be parked into interest income line this quarter versus last quarter? So there is some apportionment which happens, right?
Challa Setty: Not much.
Unknown Analyst: Not much. Okay.
Challa Setty: Most of that has gone into the P&L directly.
Unknown Analyst: Understood, sir. Yes. And sir, on ECL, as sir, your initial assessment would help. And given SMA 1 and 2 would be charged at 5% odd as per the proposed guidelines, so would we see an inch up in credit cost on a sustainable basis after the implementation of these guidelines?
Challa Setty: So I think on the ECL front, we need to be a little patient. I did mention earlier that the impact on our balance sheet would be limited for 2 reasons. One is the long road map, which is given, while we have to assess the overall expected credit loss requirement on the 1st of April '27, we will have time up to 31st March 31 to take that. And we want to utilize that road map, which is going to be given to us. So which means that the impact is going to be not significant. And we will wait for the final guidelines to come to you what would be the impact and how we would like to handle it. As I mentioned, whatever is the impact, we are going to take that 4-year road map, which is given to us and to ensure that the balance sheet is not impacted in one go. And the second thing is, yes, the major impact would come from the SMA 1 and 2, which are not significantly provided now. We do have some buffers as shown here on the excess provisioning on the standard assets. What we believe that the impact can be reduced by strengthening our collection mechanism. Today, the rollbacks in SMA-1 and 2 are significant for us. They're temporarily SMA-1 and SMA-2. So while we are presenting to the regulator that in terms of the rollback -- frequent rollbacks of this category does not require such a high floor rates on the ECL but there are so many other things which we need to present to them. So I don't want to comment at this juncture. But structurally, what we are focusing is strengthen our collection mechanism. Today, in our retail side, 70% of the collections happen automatically. It is just sweeping from a savings account to the loan account. Over the years, we have focused on this rest of the 30% where the delays happen. The delay is not necessarily that the customer is delaying. It is also because salaries get delayed. We are trying to see how do we address this category. Structurally, we will be strengthening our collection mechanism intensely so that we will not have SMA 1 and 2 situation. They are not bad assets, except that they just roll forward and roll backward frequently. We need to address that issue. So ECL, I think, is too premature to talk about the impact at this juncture.
Unknown Analyst: And sir, lastly, sir, you mentioned.
Challa Setty: I gave a little longer answer so that, again, this question on ECL doesn't come.
Unknown Analyst: Just one last question. Sir, your borrowings as that's up 12% quarter-on-quarter. And yes, as in there has been a very sharp improvement in interest on borrowings, interest expense borrowings, it is down from INR 6,000 crores to INR 12,000 crores over the last year. Sir, any insights there would be helpful. And was this INR 60,000 crores of incremental borrowings back-ended? Any color there?
Challa Setty: The second part, I did not understand but the interest on borrowings is a market function. As the liquidity improved and the rates have moderated, I think the costs have come down. What was your second question?
Unknown Analyst: The borrowings, we saw like 12% quarter-on-quarter inch up. So I just wanted to understand if it was back-ended or was through the quarter.
Challa Setty: And borrowings -- overall borrowings.
Unknown Analyst: Yes, overall borrowing.
Challa Setty: Anything, Ravi, you want to say?
Unknown Executive: Throughout the quarter, the liquidity was in surplus. So borrowings were very few. Only in the last week of September, we had to do some borrowing. That's why the price is low.
Saloni Narayan: And interest on borrowing has also gone down by 26%, yes, while we have borrowed less, the cost has also gone down.
Jai Prakash Mundhra: This is Jai Mundhra from ICICI Securities. Sir, a question on your NIM trajectory, right? So this quarter was supposed to be tough for NIM because you had the residual impact of 50 basis point rate cut but you have done phenomenally well. The margins are up. Now going ahead, sir, you would have some tailwind from continued repricing on borrowing, maybe CRR benefit, of course. And then on the opposite side, you may have some MCLR deceleration. So on balance, sir, would you believe that MCLR deceleration would be more than offset by TD repricing and maybe CRR benefit and NIM should inch up from here at least the same way what we have seen in 2Q or they can be slightly even better? What would be your sense, assuming there is no further rate cut?
Challa Setty: Yes. That's the last one, which you mentioned. The caveat is that if there are no rate cut in December, we believe that -- I did mention about the U-shaped curve of the recovery of NIM and slightly front-loaded on the Q2 because of our liability management, better liability management, both on cost of deposits coming down and cost of borrowings come down. Yes, there are some definite tailwinds. How much it plays out, we'll have to see. Obviously, the CRR full cut benefit will be available by the end of November. So that will give some pickup on the net interest margin side. We will continue to focus on the CASA. CASA is a very critical component in terms of bringing down the costs. Fixed deposit repricing is -- generally takes about 12 to 14 months. That means we are -- we have completed 6 to 8 months, another 1 or 2 quarters, the repricing will continue to be there on the stock. The flow is not getting too much repriced because I don't think any of us would be relooking at adjusting the fixed deposit rate of interest unless there's a rate action by the RBI. So our guidance still stands good that we will be above 3% in Q3 and Q4.
Jai Prakash Mundhra: Sure. And sir, on your core fee, right? So this has been up 25%, and there is a decent 30%, 31% growth in remittance and processing fee. Is this volume only or you have done some fee structure change also because for the last 3, 4 years.
Challa Setty: It is purely volume. I think it is mainly coming from the debit card spends and interchange fee, which we got on the debit cards, very significant amount uptick. I don't know whether it is sustainable or not. One is the cards issuance itself has gone up but that is a function of how many savings accounts that we've opened. But I think the spends have gone up and the interchange fee on the debit cards has gone up. It's not about fee structure being changed. It's just volumes have contributed.
Jai Prakash Mundhra: Last question, sir, on Yes Bank transaction, right? So other banks, which have sold the stake, they had very small stake but they have routed it through reserves, right? We have shown in P&L. So any insights that you can offer, plus the residual stake, which is there, right? So as per my -- I mean, the plain reading of RBI circular stated that MTM, you can actually route either through reserves or through P&L, right? So you have done the P&L for the realized amount. This is my understanding. But the unrealized understanding, could you have done or that is still pending?
Challa Setty: Unrealized, we will not do because we have a significant control by having a Board seat there, which means that we don't have to -- we are not using the MTM on the residual portion. So on the other transaction, would you like to explain in terms of S Bank transaction? Even CFO can explain.
Unknown Executive: We were holding this as an investment in associates, sir. And stake sale, which was sold is mark-to-market as per our we have done it.
Challa Setty: We follow the same regulatory process. The one which is actually realized is routed through the P&L. And unrealized, we continue to not mark-to-market because of our control, which is still there by way of it.
Jai Prakash Mundhra: And sir, on the same logic, I mean, does this new guidelines actually creates less volatility in P&L because if there is an MTM loss on bond, it will not be part of P&L, right? But if you realize, then, of course, it will come in P&L. So in a way, these new guidelines makes P&L less volatile, especially at the time of hardening of yields. Is that a right understanding?
Challa Setty: I don't -- in terms of the corporate bonds?
Jai Prakash Mundhra: Yes, sir, G6 bonds.
Challa Setty: G6, yes. That was the purpose of that.
Anand Dama: Sir, this is Anand Dama from Emkay Global. Sir, my question was related to your Express credit. So last quarter, you said that incrementally, we will see growth coming back in that. So are we on to it? Now we will see further acceleration in the second half of the year? Are you getting more comfortable in terms of the asset quality over there? If you can comment on that. Plus the mortgages. So obviously, we are growing at a relatively faster pace versus the peers. Can we see further acceleration on that front? And that basically should fuel the growth target basically, which we have increased now from 11% to 13% to 12% to 14%.
Challa Setty: So the 12% to 14% guidance is because of -- across the segments, not necessarily home loans. Home loans, 15% is a good growth. I -- while we may have potential -- see, in case of home loans, our catchment is fairly large. We have set up almost more than 420, 425 home loan centers across the country, processing only the specialized sales only for home loan processing. And our acquiring the customers is also robust. So that is contributing to the home loan growth. But I think 15% to 16% growth, I would place that as the portfolio grows, 14% to 15% stability will be achieved there. And Express credit is one segment we would like to further grow. Currently, we expected this express credit to reach double digit. We were wishing for that. But the gold loans, I think some movement is there from Express credit kind of customers. Unsecured personal loan is moving to secured gold loan because the amount of gold loan is higher now because of the value and the lower rate of interest, I think, contributing to that. As the gold prices moderate, we hope that Express credit will grow. But our sanctions and disbursements have been very significant in the Express credit. It's a high churning product. You need to constantly acquire the customers.
Anand Dama: Sure. Sir, the customer segment is similar, particularly when you look at your express credit and gold loan because otherwise, why would the shift happen?
Challa Setty: Some overlap is there. Some overlap is there. Some of those non-CSP customers, that is corporate salary package customers only will take express credit. Non-CSP customers could be their gold loan customers but a fair amount of customer base of gold loans may not be the common customer base.
Anand Dama: Sir, secondly, on your overseas credit. So that book also is now growing pretty fast. You said that you are more focused on the RORWA-based lending. How does the overseas corporate book lending places, particularly in terms of the RORWA versus the domestic credit? Is not dilutive in terms of the RORWA?
Challa Setty: Foreign book growth rate in dollar terms is just about 8.7%. What you see 15% growth rate because of the rupee depreciation when we convert into rupees. So our IBG -- our international book growth is opportunistic. If we see the good value, we will do that. Otherwise, we'll just ramp up. In the past also, we have demonstrated in quarters where we feel that pricing is not attractive, we just ramp down that. So we will be comfortable. I think the IBG book constitutes about 15% of our credit portfolio. I think that is a level which we would like to maintain.
Sushil Choksey: Sushil Choksey from Indus Equity. Congratulations on all your milestones. Sir, first question, recent event of the newspaper, you highlighted that you have INR 5,500 crores of human resource spend for training. And second thing, you highlighted you would not spell out or SBI doesn't talk on digital spend what they do on the CapEx side on an annualized basis. Can you elaborate on that INR 5,500 crores, which is...
Challa Setty: INR 50 crores, INR 550 crores.
Sushil Choksey: INR 550 crores. How does it enable our bank? The performance speaks for itself. So the steps what you've taken for today and with cybersecurity and many other measures which are required, how are we going to be future enabled with all these with all these measures?
Challa Setty: So this spend on training is significant for us because most of the people who join SBI are not bankers to start with. We take mainly from the people who are writing exam and joining the bank, whether it is a clerical position or officer position. But their career paths are defined, and we prepare them for various assignments as you are familiar with. And this training system today has 2 components. We have one of the largest physical training systems in the country. Almost 55 training colleges and centers are available. The second important element, which we have done. While the physical trainings are important to bring people together, exchange of ideas happen, we have launched what is called Spark. This is a digital platform, not only provides online training for -- across the section, they can choose their training package. We have international agencies providing the inputs along with our own inputs. But more importantly, we are creating a skill inventory. And based on the skill inventory, the job profile is defined and where people want to go. And every training modules are available in this Spark, the knowledge base, which we have created. And we are using AI extensively to offer what they're looking for, and they can build their own training module. So a combination of physical training, on-the-job training and online training aided by the AI is going to be the way forward. And as you mentioned, I think we are also having a specialized training, job families so that the specialized areas of treasury, technology, are constantly improved. We have, for the first time, had undertaken the largest technical recruitment of 1,500 people. And these are the people who have not come from the market. They are from colleges and people who have first time are entering the technical jobs. And we have completely created a training module for them internally. And these are some of the investments, which we are making, so that we have the industry best attrition rate. I think we have 0.5% -- less than 0.5% attrition rate because of our investment in human resources.
Sushil Choksey: Sir, you churn out a lot of CEOs and top management people from many other entities, you answered for new recruits, but the top layer of SBI management, you've specified in that event about IMs, Harvard, MIT, various other things. So these initiatives, what you spend is immaterial, but what makes the bank capable for future-ready like AI. You may not spell out the digital CapEx number or annual digital number. How are we transforming from current, like you said, 2 is going to come up. Now you have set up a global capability center or you can say back office in Delhi, agriculture and other products. A lot of other things initiative, whether your retail credit processing and this back -- so you have a 24/7 working bank, it's not necessarily you have to only do within the bank. And the cost will be far lesser and productivity may be large there. So the initiatives, which you are enabling today because your profit numbers can support any kind of future projections which you want to make?
Challa Setty: Absolutely. I think today, we made a big beginning. I don't know whether I've mentioned to you, we had 17 trade finance processing centers in the country, 17 of them. We have moved to 2 global trade finance centers, one in Kolkata and Hyderabad, which is completely digital. And across the country, the global trade finance is handled by these centers. This is a beginning of our centralization aspect. And -- the Project Saral, which I mentioned in my speech, the simplification project has 4 elements. One is you identify a process and simplify it. After simplification, if it is possible, automate it and if possible, centralize it. And fourth element is that if it can be outsourced, you outsource it. This is a new paradigm, right? When you are looking for doubling your balance sheet every 6 years, the scale what we have, this scale requires out-of-the-box thinking. And this is what we are going to do through the Project Saral. And if Project Saral believes that a centralization by way of global capability center is the need, we will definitely look at it.
Sushil Choksey: SBI as a parent has achieved many milestones. It will continue to figure with much higher milestones in years to come. We have very formidable subsidiaries. I'm not critical of the performance. But when will you find those milestones visible where SBI Mutual Fund is the largest, I understand. SBI Cards is concerned, a lot of concerns and ups and downs keeps coming. SBI Trusteeship, SBI Capital Markets, Insurance, it's underpenetrated market. The amount of CASA customers you have, I'm sure your fees can be 5x than where it is today. So improve all these areas, what enabling steps or how are we going to improve upon that the consolidated number of some of the members are saying we are not performing to the private bank Possibly, we are not listed on ADR, maybe one answer. Maybe you're holding now you've given a QIP done. But the underlying assets have much more strength than what we are showing today. How does it take to the next level?
Challa Setty: So in case of subsidiaries, as you see, SBI Life Insurance today is the largest private insurance company. And in case of SBI Card as a stand-alone card company, the performance is always under the focus. We are working on that in terms of addressing the asset quality issues, in terms of the spends, in terms of the new card issuance. I think many things are being done in the SBI Card. AMC, as you mentioned, is the largest AMC in the country. And the General Insurance is moving up the ladder and has a great potential in terms of the non-property -- non-life insurance company. Merchant Banking unit of SBI caps is a different ballgame altogether. I don't think we should be looking at the valuation there. But among these 4 major subsidiaries, we definitely would be looking at, as I mentioned several times, SBI AMC and SBI General are right candidates for listing in our stable. It also provides some value unlocking and more importantly, value recognition for the industry. We would soon be working on that. It is also important that SBI conglomerate is leveraging one SBI value, one SBI in the sense that if any customer walking into SBI branch, he has provided the gamut of services, which manufactured by the conglomerate itself. And that has been successful, yes, if you see our cross-sell income. But more important than income, we are trying to provide one-stop solution for our customers. So we'll continue to do that. Yes, we can do better, we can do more, and we will definitely work on them.
Sushil Choksey: Does it mean that CASA customers, we are able to sell 5 products, 3 products, 4 products?
Challa Setty: So our PPC at this juncture is about 3.5.
Sushil Choksey: Can we have 5%?
Challa Setty: We can definitely move to 5.
Sushil Choksey: Okay. Sir, moving back to today, RBI is indicating the deposit rates have stabilized. So how do you see the environment at least for the current year? Second thing, rupee is a little volatile and G-sec is also volatile. So what's your outlook on the next 6 months on that?
Challa Setty: Deposits, what did you ask?
Sushil Choksey: Deposit has stabilized. The rates have stabilized, what RBI articles...
Challa Setty: I think the deposit rates have stabilized. The further deposit repricing or recalibration will only happen if there is any monetary -- I mean, repo rate action. Otherwise, I think more or less the deposit rates have stabilized. As far as treasury related, you can respond.
Unknown Executive: I think your question is around the G-Sec where it is going to be a 10-year I think we have seen a lot of volatility and also specific actions from RBI, where they convey to the market that they're not comfortable at certain yields, right? I mean -- so that may happen by way of canceling some auctions. So that was taken note of by the market on that particular day when the yields came down by around 4 to 5 basis points. I think it is now range bound. We feel like the range can be 6.2% to 6.65% kind of range for the 10-year G-sec. It's just an internal house view.
Sushil Choksey: Last question again. Government may have to push up bigger ticket CapEx for infrastructure because you're seeing some noise being made about nuclear tie, hydrogen and many others and SBI caps have come out with a lot of reports on solar, hydrogen. So solar integration more on backward going up to polysilicon. So these larger ticket sizes are moving up, there is no INR 1,000, INR 2,000, there's INR 10,000 crores, INR 20,000 crores. Are we getting any sense for next year, if not for this year, of some kind of a discussion on a pipeline coming up?
Challa Setty: From the government side?
Sushil Choksey: Government and private.
Challa Setty: No, no. private side, I think we have a very robust pipeline. Our aggregate corporate credit pipeline is around INR 7 lakh crores. So this is a mix of working capital underutilized and term loans under disbursement, the new projects which are being discussed. So both in the public sector and private sector but predominantly private sector. So that pipeline is very strong. And this pipeline will -- a part of it will get converted into reality this year, and there will be a spillover to the next year in some of the projects.
Sushil Choksey: You indicate that there is positivity on private CapEx?
Challa Setty: Yes. Not necessarily across the sectors, but most of the sectors, yes.
Sushil Choksey: This new policy about capital market funding and M&A, the yields on capital markets are much higher than home loan and car loans and any other loans which you might be disbursing today, at least from the other banks and the M&A activity, can we build INR 40,000 crores, INR 50,000 crores overnight on this?
Challa Setty: I mean, see...
Sushil Choksey: 40,000 crores, INR 50,000 crores.
Challa Setty: Today, I think the draft guidelines put some cap on that 10% of our capital.
Sushil Choksey: Capital market is possible to say.
Challa Setty: Capital market, yes, I think we have done one product, which is loan against mutual funds. We have never been active on loan against shares. While we have adequate room on the capital market exposure, is underutilized cap room available there. We will see. I think we need to assess our own risk appetite for this kind of activities. And also, I think most of these activities also have to be end-to-end digital. Unless we get that right, we will not be moving there. On the capital market broker side, I think we have significantly scaled up that.
Sushil Choksey: The share advance can be a 10% yield on current conditions. And second thing, you or 2 can plug in...
Challa Setty: Yes. So we are -- we will develop that product mostly on the self-consuming platform.
Sushil Choksey: Good luck for many milestones for the year to come.
Pawan Kedia: Due to paucity of time, we will take up 2 more questions, followed by a few questions coming in through online webcast, which will be addressed by the Chairman sir.
Kunal Shah: This is Kunal Shah from Citigroup. So firstly -- so firstly, with respect to standard asset provisioning, almost INR 1,200-odd crores, and this is after some release from the restructured account of INR 1,100-odd crores against INR 165,000 crores of increase in the loan book. So is there any accelerated provisioning, which has been done towards the standard assets during the quarter?
Challa Setty: There's no accelerated provision.
Kunal Shah: Some additional standard asset provisioning, it seems to be a slightly higher quantum.
Saloni Narayan: Yes, we have done some -- for 2 accounts actually, we have done some DCCO extension.
Challa Setty: This is basically whenever there's an extension of commercial -- date of commercial production, there's a requirement of making provision. And some of the reversals, what you see also related to the DCCO. The moment DCCO is achieved, the provision gets written back. So there has been some write-back and there is an additional provision, which is made where the DCCO dates are extended.
Kunal Shah: And that quantum was on couple of...
Challa Setty: I think, INR 750 crores or something additional provision.
Saloni Narayan: INR 200 crores was write-back, sir. So INR 500-odd crores is our...
Kunal Shah: Net was INR 550-odd crores. And second question is on subsidiaries. So monetization, as you indicated, SBI Mutual Fund and SBI General. So what would actually trigger that decision? The capital market environment is conducive, market sentiments are good. So should we expect it sooner? Or maybe we have just done the fund raise very recently, so we would want to wait for some time and then explore that option?
Challa Setty: We are not waiting because we have done the QIP. I think we need to just look at -- see, one is, as I mentioned earlier also that these 2 companies don't require capital at this juncture, neither the parent requires because we just raised INR 25,000 crores. But we are serious about listing them. And the Boards will -- respective Boards will take a call in terms of the timing, quantum. The reasons, whatever you mentioned, all of them are applicable.
Pawan Kedia: One last question, please. Okay. I'll squeeze in 2.
Piran Engineer: Sir, just on -- this is Piran Engineer from CLSA. On Project Saral, how do we like measure what the outcomes will be and what the timelines would be? That's point number one. Point number two, in our current account ratio, we've seen like a steady improvement for the last 4, 5 quarters. It's growing faster than the overall deposits. Just some flavor on what's going on there. Are we gaining market share in terms of accounts or higher wallet share of existing customers, more retail SME push, what's going on there? That's it. And congrats on the good quarter.
Challa Setty: Yes. The second one, I think I did mention in terms of what we are doing on the CASA side. One is you're all very familiar that when we open savings bank account, we don't have minimum balance requirement. That is USP of SBI. And we were the first bank not to charge on the minimum balance not being maintained, which also means that the customers who are -- have the ability to fund the account also so many time don't fund. So we have started a large-scale campaign to educate our staff who are opening the accounts that you politely ask the customer that whether you can fund the account. Today, the simple nudge has ensured that 70% or 75% of such account get funded within 45 days, which means that your balances are going up, otherwise, which would have remained unfunded for a long time. That is on the savings bank side. And on the current account side, I think our focus on business current accounts and focus on ensuring that you give different variants of current account to business customers based on the balance maintained, which is the usual stuff everybody does but we have intensified our effort in terms of providing services, which are linked to the balances which are maintained. And this has helped us, and we have opened a lot of a few transaction banking hubs, which were primary owners of opening the current accounts and ensuring that a solution is given, not merely opening an account. That is also contributing to CASA daily average balances going up. And we did acquire market share in the current account and 85 bps...
Saloni Narayan: 185 bps.
Challa Setty: So it's a significant market share acquisition there. And mind you that the largest current account balances are with us and growing on that is important. On the savings bank account, another thing I would like to say, in the overall deposit construct, what we have told all our regional managers, we have more than 730 districts in the country. And in many districts, SBI, you will be surprised, have market share more than 60% in deposits. But we said that despite whatever dominant market share you have, the focus is at least get 1% additional market share, get additional acquired market share of 1%, irrespective of what is our market share in that district. That is also contributing to the savings bank growth rate. I think these are a few things. There are many strategies which we are adopting, but there are 2 things which I wanted to call out. And on the Project Saral, I think the primary aim of Project Saral is to reduce the drudgery at our branches. We -- whatever we talk about technology, digitalization, this is a bank which we would like to position as digital first, consumer first, our customer first, which means that we would like to leverage our large physical presence and large employee base to provide that human touch. But many a times, the branches are overcrowded, branches are -- people are not able to spend enough time with the customers. We would like to focus on reducing that treasury. So the outcomes could be taking some time. Ultimately, of course, it has to be measured in terms of whether it is adding to my productivity, reducing my costs. There are definite outcomes are defined there, but we will not be discussing them at this juncture, probably the first drop from this Project Saral, is 1st of April 2026. I think April quarter, we would talk more about what are those benefits we are getting out of this project.
Pawan Kedia: We have a few questions coming in through the online webcast. Now these will be addressed by the Chairman, sir.
Challa Setty: Yes. First question, Kiran Shah, written-off account and recoveries from accumulated written-off. Recovery from written-off accounts, as we have presented here, INR 2,480 crores. This question on the -- what is that technically written-off portfolio is likely to give recovery rate, I think, discussed earlier also. We placed it around 6% to 8%. We started saying about 10% but as the security value is coming down based on the security value, and the accumulated written-off accounts, our recovery rates are likely to be around 8%. [indiscernible] On slippages and portfolio quality in Express credit, the GNP is showing a sharp rise. Any signs of concern there? Not showing any sharp rise. I think quarter-to-quarter, it has come down, if I remember correctly. So as the denominator, the portfolio increases, in absolute terms, there is no major concern in terms of the express credit. Abhishek Kumar, gross NPA and AUCA book position. Gross NPA as on 30th September is INR 76,000 crores and AUCA is INR 163,000 crores. Ujjwal Kumar, SBI should implement Tab Banking for onboarding of customer, either individual or nonindividual, why is SBI not taking such initiatives? I'm glad to announce that Tab Banking, we have launched last quarter. And this Tab Banking is launched initially for the corporate salary package customer onboarding. And as we fine-tune that, and there's a good number of customer accounts are being opened under Tap Banking. So the first phase we launched on the 1st of July 2025. This journey, onboarding journey takes just about 5 to 7 minutes because if it is -- most of the customer data is collected from various sources. Similarly, in the current account also, we have already started Tab Banking. Ankit Ladhani from IndusInd Nippon Life, any guidance on NIM? I think we have talked enough on the NIM. And we still are holding that our guidance, long-term NIM above 3% through the cycles. Ashish, can you provide a share of MCLR, EBLR and other loans and advances? As on 30th September, EBLR is 31%, MCLR is 29%, fixed rate is 22% and T-bill is 15%. Tarun Lala, what amount has been earmarked for pension provision? The pension provision for half year '26 is INR 6,672 crores. For the quarter, it was INR 3,525 crores. Prashant, this sector industry has maximum proposals in pipeline. This is a little diversified. I think pipeline is both in terms of capital expenditure and as well as NBFC portfolio. So from a capital expenditure point of view, power, renewable energy, commercial real estate and a bit of iron and steel. Vishal Gupta from Ak Investment. Any plans to monetize your subsidiaries in near term? I think we have had enough discussion on this but just to answer your question, these are the 2 companies we will be seriously considering and the timeline and when we are likely to go will be decided by the respective Boards. How much is the LCR of the bank? LCR of the bank is 143.8%, up from 139% as on 30th June. What is the impact of Yes Bank's stake sir on your return on assets? If we do not consider the profit in Yes Bank, the ROE is still above 1%. It would be around 1.04%. Thank you very much.
Pawan Kedia: Thank you, Chairman, sir. I trust all the questions have been addressed.
Challa Setty: If anybody wants to ask questions, we still can give 5 more minutes. Otherwise, we can close. But just see that you're not repeating the same question.
Unknown Analyst: I just had a data keeping question. The extraordinary gains because of Yes Bank stake sale, gross of tax was around INR 4,500 crores. What is this amount net of tax?
Challa Setty: INR 3,386 crores.
Prakhar Sharma: Sir, Prakhar Sharma here from Jefferies. Just wanted to check, your fee growth in this quarter has been phenomenal. You haven't seen 20% plus numbers for a long time on a big number. Can you just elaborate what has helped? And what do you think is this start of a new run rate, maybe not 20%, but double digit, et cetera. So if you could just help.
Challa Setty: So most of the lines of other income seem to be good ones like either in the government business or cross-sell I believe they are stable, even loan processing charges. Much of the loan processing charges are not one-off or bulky one. They're all widespread across the retail segments. The only thing which I mentioned is on the debit card interchange fee. I don't know how it is going to play out. But otherwise, I think other income streams are seem to be stable.
Pawan Kedia: Okay. I trust all the questions have been addressed. We'll be happy to respond to other questions in offline mode. Let me end the evening with thanking Chairman, sir, MD sir, DMD Madam, top management team, analysts, investors, ladies and gentlemen. We thank you all for taking time out of your schedule and joining us for this event. To round off this evening, we request you all present here to join us for high tea, which is arranged just outside this hall. Thank you. Thank you so much.