A very good evening to everyone present here. On behalf of Bank of India, I extend a
very warm welcome to all the esteemed analysts who have joined us today in person,
as well as those who have joined us virtually from different cities across India. We’re
very pleased to announce Bank of India’s financial results for Q2FY27.
I would like to introduce the Bank of India’s management present here for today’s
Analyst Meet Shri Rajneesh Karnatak - MD & CEO, Shri P.R. Rajgopal - Executive
Director, Shri Subrat Kumar - Executive Director, Shri Rajiv Mishra - Executive Director
and Shri Pramod Kumar Dwivedi - Executive Director.
We will now begin with this analyst briefing. To start, I would like to invite Shri Rajneesh
Karnatak to address this gathering, after which we will open the floor for Q&A session.
Over to you, sir.
Shri Rajneesh Karnatak, MD & CEO:
Thank you, madam. So good evening, friends. Good evening, ladies and gentlemen.
It is a pleasure to have you with us for today’s analyst meet after the announcement
of our Q2 FY27 financial results. Thank you for your continued interest and
engagement with Bank of India. I look forward to sharing our quarterly performance
and engaging with you on our progress and priorities.
As we look ahead to the second half of FY27, the global environment remains
challenging, with geopolitical conflicts, elevated crude oil prices and tighter financial
conditions keeping inflationary pressures alive and prompting several central banks to
raise interest rates. Against this backdrop, India has demonstrated resilience, with Q2
GDP growth reflecting the strength of domestic demand and the economy’s firm
underlying fundamentals. At the same time, rising inflation has prompted the RBI to
raise the repo rate by 25 basis points, balancing price stability with the need to sustain
growth.
For banks, the opportunity now lies in translating this stability into stronger business
growth.
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My remarks today are divided into three parts.
- Institutional Initiatives
i.
Under our Predict-Monitor-Supervise framework, we’ve developed Star Radar –
a predictive model that analyzes data to identify emerging risks of our branch
network and trigger early warnings for swift intervention.
ii.
A dedicated Gold Loan Cell is being set up to drive robust portfolio monitoring,
policy implementation, and direct operational support for our branches.
iii. Yuva Banking Mitra will be designated at every branch to assist with youth
account opening, promote youth-focused products, and encourage safe and
responsible digital banking.
iv. OCR- based CTS validation is being implemented as an additional alphanumeric layer in the Cheque Truncation System to verify cheque codes during
clearing and bolster fraud prevention.
2. Business
i.
Global business grew by 21.13% YoY from Rs.15.62 lakh crore in Sept’25 to
Rs.18.92 lakh crore in Sept’26 with an incremental growth of Rs.3.30 lakh crore.
ii.
Global Deposits increased by 21.59% YoY from Rs. 8.53 lakh crore in Sept’25 to
Rs. 10.37 lakh crore in Sept’26 with incremental growth of Rs. 1.84 lakh crore.
iii. Domestic Deposits increased by 23.29% YoY from Rs. 7.30 lakh crore in Sept’25
to Rs. 9.00 lakh crore in Sept’26 with incremental growth of Rs. 1.70 lakh crore.
iv. CASA increased YoY from Rs. 2.86 lakh crore in Sept’25 to Rs. 3.07 lakh crore in
Sept’26 with incremental growth of Rs. 20,539 crores and CASA ratio stood at
34.16%.
v.
Global Gross Advances increased by 20.58% YoY from Rs. 7.09 lakh crore in
Sept’25 to Rs. 8.55 lakh crore in Sept’26 with an incremental growth of Rs. 1.46
lakh crore.
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vi. Domestic Gross Advances increased by 17.84% YoY from Rs. 5.97 lakh crore in
Sept’25 to Rs. 7.04 lakh crore in Sept’26 with incremental growth of Rs. 1.07 lakh
crore.
vii. RAM advances increased by 18.68% YoY from Rs. 3.48 lakh crore in Sept’25 to
Rs. 4.13 lakh crore in Sept’26 constituting 58.63% of Gross Advances in Sept’26
with incremental growth of Rs. 0.65 lakh crore.
3. Profitability & Asset Quality
i. Operating Profit improved by 33.18% YoY and stood at Rs. 5,089 crores for
Sept’26 against Rs. 3,821 crores in Sept’25.
ii. Net Profit increased by 25.32% YoY and stood at Rs. 3,202 crores for Sept’26
against Rs. 2,555 crores in Sept’25.
iii. NII increased by 18.52% YoY and stood at Rs. 7,007 crores for Sept’26 against
Rs. 5,912 crores in Sept’25.
iv. Non-Interest Income increased by 24.77% YoY and stood at Rs. 2,770 crores for
Sept’26 against Rs. 2,220 crores in Sept’25.
v. Global NIM stood at 2.47% in Sept’26 against 2.41% in Sept’25.
vi. Slippage ratio stood at 0.15% in Sept’26 against 0.14% in Sept’25.
vii. Credit Cost stood at 0.12% in Sept’26 against 0.15% in June’26.
viii. There has been improvement in asset quality with reduction in both Gross NPA
ratio and Net NPA ratio. Gross NPA ratio improved by 94 bps YoY to 1.60% for
Sept’26. Net NPA ratio improved by 23 bps YoY to 0.42% for Sept’26.
ix. Provision Coverage Ratio (PCR) improved to 94.45% in Sept’26 against 93.39%
in Sept’25.
x. As on 30.09.2026, Bank’s CRAR stood at 17.78% against 16.69% as on
30.09.2025.
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As we progress through the second half of FY27, the emphasis will be on
strengthening the Bank’s competitive position, deepening customer relationships and
leveraging emerging opportunities across the banking landscape. Our focus will
remain on building a resilient institution that delivers consistent performance and
creates long term value for all stakeholders. Against this backdrop, our guidance for
FY27 is - global advances to grow by 15-16%, and global deposits by 16-17%. Going
forward, bank’s emphasis will be on strengthening the ability to respond to a changing
economic and regulatory environment, capitalizing on emerging opportunities across
business segments, and ensuring that our growth translates into consistent financial
performance and lasting stakeholder confidence. Thank you once again for joining us
today.
Moderator
Thank you, Mr. Karnatak. We’ll now proceed towards the Q&A session. Before we
proceed, we would request you to kindly raise your hands for the queries. One of our
representatives shall hand over a mic to you.
I'll request you to introduce your name and your organization's name before you ask
the questions. I'll also request you to please restrict yourself to two questions at max
so that everyone gets a chance to interact with the Management. For subsequent
question, we'll come back to you later if time permits. With that, I’ll hand over to you,
you can begin, sir.
Mr. Ashok Ajmera
Thank you. I am Ashok Ajmera, Chairman of Ajcon Global Services Limited. Sir,
compliments to you for fantastic set of numbers. I mean, most of the banks who have
declared results so far have given good results. But yours is phenomenal. I mean, on
all the fronts, if you see the business growth, the credit and deposit growth, not only in
the quarter overall, year-on-year, and quarter-on-quarter also, it’s a fantastic growth.
Congratulations for the same.
Shri Rajneesh Karnatak, MD & CEO
Thank you.
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Mr. Ashok Ajmera
And another good thing is that you’re given the target of deposit higher than the target
of the credit for the whole year. I think you said deposit growth target 16%-17% and
advances 15%-16%, which is also, a fantastic point. Having said that, sir, there is not
much to speak on the profitability also. You did well.
I would just like to know about the provisions, which are there. I think the standard
provisions is reduced by Rs. 200 crore in this quarter. Even in the last quarter also
there was a reduction, whereas in many of the other banks the provisioning is
increasing because of the ECL and various other factors in the contingency which is,
you know, being there globally happening. So, one thing on that, that on the ECL
provisioning, how much and what is our preparedness? How much is the total amount
which we need to provide? How much has already been provided? And how, what is
the road ahead on that?
My second question, which is concerning everybody that you have given the growth
target and even achieved also. The past performance is also good. But looking the
current situation, like especially the global situation internationally, what is happening
the crude and locally also, we are facing severe drought in the country. So, on this
background, do you still see, you still maintain this kind of targets and you still hopeful
of achieving it? And if yes, then how are you meeting these challenges?
Shri Rajneesh Karnatak, MD & CEO
Thank you so much, Ajmera ji. So, on your first question with respect to provisions, if
you see, the provisions have been reversed in the standard assets. That is one of the
major components where Rs. 213 crores have been reversed in this quarter. To just
give you a sense that this is because of our good credit monitoring and Zonal
Collection Centers which are working. If you go to our slide number 25, you will see
that for SMA Rs. 5 crores and above, we have reduced that number now to Rs. 2,553
crores as against Rs. 6,000 plus crores as on September 30,2026.
So, our SMA which is Rs. 5 crore and above as on 30th September,2026 is now only
0.3% of our standard advances, which was earlier 0.89%. So, this reduction in the
SMA number is because of the one account which was under SMA, now moved out of
SMA and as per the RBI circular for which we made some provisions and now that
provision has been reversed, so that is the advantage. As we have with good credit
monitoring team due to which the SMA numbers are coming down. So that is one point
which is there.
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Second point was with respect to the ECL and its provisioning. So, ECL impact, we
have already started doing the computation and other kinds of things, whether it is the
PD, whether it is the LGD, SICR, and other kinds of things. Already we have onboarded
a consultant. Technology kind of interventions are also already started. So, we have
to go to the Board with the note about the ECL and its numbers as far as the RBI
guidelines are concerned, which kicks on 1st April, as you are aware.
So,, broad numbers on the total amount I would not be sharing at this moment because
we have to go to the Board with the note. But the ballpark number on the impact on
the CRAR side, somewhere around 0.5%, on an annual basis in the next 4 years. So
if I share with you, the CRAR on 30th September, it is well above 17% as against the
regulatory requirement of 11.50% and apart from that, we have a profit of Rs. 6,000
crores for the H1, and with this run rate, we should have a profit of around Rs. 12,000
crores in this financial year. And with that kind of profitability being there, the additional
provision of 0.5% per annum will be taken care by the profitability itself. In fact,
profitability is much more than that. So, that is also taken care of.
As far as the headwinds which are there with respect to the West Asia crisis, as you
rightly said, El Nino impact which is coming, and some of the places where drought
conditions are coming specially in some districts of Maharashtra. So see, this situation
was there since the start of this current financial year. West Asia crisis started in
February. So, we have already completed two quarters, not only for our bank, for the
entire industry, and all the banks are giving good numbers. So, economy is quite
healthy in that respect. Crude issue was there, but that has also been smartly solved
by the Government, and there is no issue on the availability of the crude in the country.
Only thing is that the price has increased because of which inflation has increased.
But however, if you see the GST collections on a month-on-month basis, more than 2
lakh crore collection is coming per month in the GST on a regular continuous basis.
Second thing is that all the reports which are coming, whether it is from IMF, whether
it is coming from the RBI data, the estimation of the GDP for FY27 is also very robust.
In fact, IMF says that it would be should be somewhere around 6.7%, though the Indian
estimates are higher than that. Even at 6.7%, it is very high compared to other
countries across the globe. So, definitely the fundamentals within the country are
strong. Banking fundamentals are also strong, asset quality is good. And this El Nino
effect was there also during the monsoon. Those there were certain pockets in the
country where there was impact of the monsoon, but that also has been taken care of.
If you see the numbers of most of the banks which have started coming, there has not
been much impact as far as the asset quality is concerned. So, we feel that with the
kind of robust systems that the bank has built, all the banks have built, and we have
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also built, and the agility with which we are working, we are confident that we’ll be able
to tide over, with these headwinds which are there.
Mr. Ashok Ajmera
Yes, sir, point well taken.
Shri P.R. Rajgopal - Executive Director
I will just add to that you see our results, what we have done with respect to provisions.
We have substantially increased the provisions for bad and doubtful debts during the
half year. If you see the last half year provisions that we have made, it was only Rs.
1,500 crores as of that day. Today, if you see, we almost got 2,100 plus.
And in so far as these provision for standard assets, it is in a reduction trajectory and
the provisions which we hold in standard asset reduced around near Rs. 400 crores
in first half, so which is not reflected in the results. So we have sufficient provisions.
And if you look at our SMA as a whole, it is around 2.6%. So, 2.6% of the total
advances if you take for argument’s sake the entire is going to become bad, still we
have enough room to provide for it without any problem. even worst-case scenario
than ECL
Mr. Ashok Ajmera
Yes sir. My second observation and some question is on the declining percentage of
CASA over last 2-3 quarters. This quarter it might be because of overall deposits have
increased because of the FCNR and the dollar deposit which has come in and it is
affecting to some extent our NIM also. If the NIM is also overall if you see is as against
2.52% down to 2.47%. So, but at the same time, because of the rate hike, now we are
going to benefit because the lag period is there. The deposit rates are going to be
increased maybe much later, whereas the credit, I mean, the interest rates have
already increased on the repo-linked loans.
So, the benefit of that, if you factor in, how much do you think the NIM can improve,
or how many basis points we are going to get the benefit because of this rate hike in
the next couple of quarters? And how do you plan to increase the CASA percentage
again and thereby increasing the NIM?
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Shri Rajneesh Karnatak, MD & CEO
Yes, CASA percentage has come down. You are rightly saying present CASA
percentage is somewhere around 34.16%. However, if you see in absolute terms, we
have grown our CASA by 7% in spite of these challenging times and also on absolute
number, it has grown by more than Rs. 20,000 crores on a YoY basis. So, that is one
point. So, as a franchise, we are totally monitoring the CASA numbers and also retail
term deposits.
So, if you see our presentation, you will see that our CASA numbers in percentage
terms is around 34% and retail term deposit percentage is around 43% which makes
it 77% from the franchise, which is the retail franchise, which means that the bulk
deposit is only 23%. However, let me say that our franchise for advances credit growth
is also very strong at the branch level. So, we are having good pipelines in corporate
loans, we are having good pipeline for the RAM advances also for which we need to
raise resources for meeting this credit growth which is there in the system.
To meet that credit growth, we are taking some bulk deposits, because of which this
CASA percentage is looking lower, which is at present 34%. But nonetheless, we are
working on it. A lot of strategic moves we have taken in order to improve not only the
amount of CASA which is there in absolute terms but also in percentage terms. So,
that is one part.
As far as the NIM part is concerned, as you rightly observed because of this the NIM
is also getting impacted. You are right. If you see our global NIM, which was 2.52%,
has come down to 2.47% as on 30th of September, and there has been a reduction of
5 basis points. So, FCNR raising of deposit has taken one of the reason for impact on
this reduction of NIM. And if I share with you the data, we have raised FCNR of $2.2
billion. So, $2.2 billion on the liability side and $2.2 billion on the asset side in the
international book where the leverage has been given. So, that impact on this Rs.
40,000 crores is around 5 basis points. That is the impact which has happened in the
global NIM. So, this 5 basis point impact is because of the FCNR which is there.
As regards the increase in repo by RBI is concerned, there we have done a ballpark
calculation. See, RBI has raised the repo rate by 25 basis points. If you see our
presentation also, 66% of our domestic advances are external benchmark-linked,
which is repo only. So, the day the repo was raised by the RBI, we also had an ALCO
meeting, same day we have passed on the increase in the repo rate.
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So, positive impact we will be getting in this full quarter. So, that impact will be there.
And on the deposit side, the rates will obviously increase because the repo has also
increased. But as you rightly said, that impact will be staggered because, as you are
aware, that nearly 60% of our term deposits are in the category of 1 year to 18 months.
So, that they will take time to mature, and then the repricing will happen only after that.
So, this increase in the repo rate will also, help the bank in improvement in the NIM by
around 6 to 7 basis points.
Mr. Ashok Ajmera
The last on the technology front, sir. A lot of things are happening, and especially in
the compliance and the cybersecurity on that front, and now DPDP coming in and on
that. So how prepared we are on the technology front, especially so many things are
happening around in the various banks/ in the financial institutions. How prepared we
are on that front, and what kind of, still, there’s so many journeys which are still
pending, and what kind of budget do we have for the technology in the remaining part
of the financial year ’27, sir.
Shri Rajneesh Karnatak, MD & CEO
So, as far as the technology is concerned, see, as I already said in my last conference
after our Q1 results, that whatever the budget we have kept ourselves for the IT part,
technology part, whether it is the Opex or the Capex, whether it is for core IT, whether
it is for digital banking or cybersecurity, that budget remains intact. So that kind of
spending we’ll be doing in this financial year 27. So as far as our technology
preparedness is concerned, we already have a big four consultants with us who is
guiding us on the transformation of IT, digital, and cybersecurity.
And our system is fully prepared and agile as far as the cybersecurity risk and other
kinds of things are there. Whether e-mudra was there, the certifications are also there,
and continuous advisories are also coming from various government departments on
these kinds of risks which are emanating, and we are immediately complying with
those guidelines and doing the necessary changes. So, there are a lot of journeys
which are going on as far as our products are concerned, whether liability products,
whether it is our asset products, or whether it is on the wealth management product
side. So, these journeys will continue and every quarter we will be launching some
products.
In this presentation also, if you see, there are four products we have launched in this
quarter on the digital side. On the analytics sides, now through our Data Lake project,
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those which is under the artificial intelligence and machine learning, now the book is
more than Rs. 21,000 crores on the analytics-led leads which are coming through the
CRM platform. So, a lot of money is being spent on technology, not only for the
business growth but also on cybersecurity part and we are pretty confident that the
bank on the technology platform is quite strong and robust, thank you.
Moderator
Before we proceed, I just wanted to add in that people who have joined us online can
drop in their questions to Mr. Ganesh Shankaravar on 7738688746. I repeat,
7738688746. We are ready to take the next question. You can go ahead, sir.
Mr. Sushil Choksey
Congratulations to team Bank of India for excellent performance and your initial
guidance. Sir, looking at the performance, I think we are speaking a little lower than
what we are achieving, you know. It’s fine that we outperform the guidance. You reply
to some of our questions which I would have prompted to ask. What is the size of the
book which is sanctioned, unavailed? What is the pipeline in corporate, in RAM,
specifically where car loans are concerned, housing loan tickets are concerned. It is
more customers or the average ticket per customer is rising?
Second thing is the same customer can be multiple products can be sold. How are we
tapping them? And if so, how many products are we able to establish with each
customer? On digital spend, you said a lot of budgets, but I understand in the
marketplace our supply chain, various other corporate-led solutions, trades platform is
yielding good advance compared to many other advances. Looking at that, can you
elaborate a bit what Bank of India is engaging in and which is changing our model
from a traditional banking model?
Shri Rajneesh Karnatak, MD & CEO
So, as far as the pipeline is concerned on the credit side, let me tell that as far as the
corporate pipeline is concerned, as on 30th September, we are having a pipeline of
around Rs. 65,000 crores. That is the pipeline in the corporate side. Apart from that,
in the RAM side also, we have a pipeline of around Rs. 20,000 crores. And then we
also have created pipeline in the pool and co-lending and the supply chain platform
which is around Rs. 4,000 crores.
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Apart from that, we have a digital platform also now, as you are aware. There also we
are having a pipeline of somewhere around Rs. 3,000 crores. So in total, if you see
the pipeline, which is a very secular pipeline, not only corporate but also RAM, digital
lending, pool & co-lending and also supply chain, we have a total pipeline of
somewhere around Rs. 86,000-Rs. 87,000 crores total, including corporate credit. And
if I give you a sense on the corporate credit side, the main numbers are from renewable
energy of more than Rs.12,000 crores, in which we have sanctioned and yet to be
disbursed, or in principle approval is given and the proposal is under different stages
of being placed to the committee.
In power sector, we have more than Rs. 9,000 crores pipeline, in road sector, again
we have more than Rs. 5,000 crore, in Oil and gas, we have more than Rs. 5,000
crore, in Cement in which again more than Rs. 4,000 crore, in Manufacturing,
particularly with the textile and others, we have more than Rs. 2,700 crore, in
Construction Rs. 2,100 crore, in Automobiles also more than Rs. 2,000. So, these are
the major sectors where we are having these pipelines. As regards, as you rightly said,
that in the new economy which is coming, the supply chain and other kinds of things,
we have now separately made one branch in Mumbai, which is centralized branch in
the entire country, which we call the SBB, wherein the supply chains are now handled.
So, in that branch, entire pool, entire co-lending, entire trades and supply chain is
there, and we have a very robust IT platform, for the supply chain financing. We have
already started building up a book and we have already given a target to our 69 zones
that every month they have to onboard one new vendor for supply chain. So, the work
has already started. Presently, the book has already touched more than somewhere
around Rs. 1,000 crores, and we are confident for more business because this has
just started in this financial year only.
So, on a dedicated way and with a dedicated team sitting there of around 20-25 officers
who are doing this work only and we are very confident that by the year end, when this
branch stabilizes under this supply chain financing, we should be having business of
somewhere around Rs. 1,500 crore in the first year itself. And after which the scale-up
will happen.
Shri P.R. Rajgopal - Executive Director
Average ticket size is growing in housing loan and vehicle loan also. There is a good
traction and another thing I would like to add, what MD has just said is in these digital
initiatives, especially supply chain related, where Trade’s, where you are saying that
yield is good. So, if you see our growth in the quarter, in the current quarter itself, we
grown by almost 10% in that. So, most of the assets are booked in medium enterprises
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and small enterprises. Medium enterprises mostly are coming through trades as well
as supply chain.
So, there is a good traction over there. So we’re going to continue to improve in that
and then make a good book out of it. So there will be a lot of traction through digital
which will flow into the supply chain and other trades-related platforms. So the number
is also growing. Our trades portfolio is also growing very, very robust way.
Mr. Mayur Gala
My name is Mayur Gala from True Alpha Finserv. I’ll directly come to the questions.
What is the current government’s stance on its stake? Any OFS?
Shri Rajneesh Karnatak, MD & CEO
So, as far as this is concerned, see SEBI guideline, we are a listed entity. SEBI
guideline says that the promoter should be below 75%, so we are already within that.
We are 73.8%, so that we are already complied. So, at present, we have no indication
from the government to further reduce this number. We don’t have any plan also as
on date for raising any capital.
Mr. Mayur Gala
Okay. And next question is, what is the ROA target and when does the bank expect to
reach it?
Shri Rajneesh Karnatak, MD & CEO
So, ROA, as I said in my last analyst presentation also, that we will now try to have
ROA of above 1% on a quarter-on-quarter basis. So if I give you just a sense from the
last 3 quarters, March ’26, June ’26, and now September ’26, we have been able to
have our ROA above 1%. Our endeavour that we will have ROA of above 1% in the
ensuing quarters also and the overall March ’27, that we’ll be showing ROA of above
1%.
Mr. Mayur Gala
Any higher targets for the future?
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Shri Rajneesh Karnatak, MD & CEO
So, presently the guidance we are giving up to March ’27 only. If you see, traditionally
our ROA has been somewhere between 0.89 to 0.94-0.95 in the last 2-3 years. But
this year consistently we have said that we’ll be having ROA of 1%. When we hit this
mark of 1%, FY28 should be even better.
Mr. Niteen Dharmawat
Thank you for the opportunity. Congratulations, sir, for good set of number. My first
question is about the recovery in written off accounts tripled to Rs. 978 crores this
quarter. Are there any specific large resolutions driving this, and what is the
sustainable quarterly run rate as the NPA pool now shrinks? You mentioned this last
time also, so just wanted your view on that.
Shri Rajneesh Karnatak, MD & CEO
So, recovery in written off accounts, if you see that this number is at somewhere
around Rs. 900 crores in this quarter as against the previous quarter which was lower.
There are 2-3 accounts, not a single account, but I can say that there are 2-3 accounts
which were lumpy accounts. But we are expecting that with the kind of targeting that
we have done for these accounts which are like fully written off, where we are targeting
some resolution for us either through OTS or through NCLT or any other route. So, we
are expecting that we want to maintain this kind of run rate during the entire year.
Mr. Niteen Dharmawat
Perfect. My second question is about NPA provisions which got doubled to Rs. 1,000
crore plus, and despite slippage at record low of 0.15%. Is this front-loading under the
new RBI provisioning norms? And which sectors have been provisioned for?
Shri Rajneesh Karnatak, MD & CEO
So, if you see this number, why it has increased, in Q1 there were slippages of around
Rs. 1,800 crore. This quarter also there is a slippage of around Rs. 1,100 crore. So
this provision which has been done is to take care as per IRAC norms. So whatever
is the NPA, we have provided as per the IRAC guidelines. So, these are all those
provisions which are as per the fresh slippages which are happening. So just to give
you a sense, we have PCR of more than 94% and tangible PCR of somewhere around
73%.
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Mr. Niteen Dharmawat
Got it. Thank you so much.
Mr. Manoj Alimchandani
Excellent set of numbers. Growth on growth. My name is Manoj Alimchandani. A lot of
questions have been asked, so I’m changing the questions I had earlier planned. So,
you mentioned, you have made extra provisions, and now in response to query you
mentioned these are as per IRAC norms. And now a couple of public sector banks
have clearly articulated that they have started making, taking steps towards creating
front-loading provisions for ECL.
Shri Rajneesh Karnatak, MD & CEO
Correct.
Manoj Alimchandani
Indian Bank has clearly articulated two quarters, in fact half of their ECL estimate, they
have also been clear in giving estimate, is already done. A couple of other public
sectors have also done. In fact, when we saw the slippages and provisions, we were
wondering whether we are also taking the similar steps. But why don’t we have clarity
and indicate to the investors whether we have front-loaded Rs. 1,000 crores or Rs.
2,000 crores? And if you can give the estimate as of today about the ECL provisions
we need to make, how much we have already done, and in what period we should be
front-loading, or we will go as per the glide path of RBI?
Shri Rajneesh Karnatak, MD & CEO
So, as we are aware that the ECL provisions start from 1st April ’27. So, as far as the
present provision on the ECL is concerned, we do not have any provision on ECL side.
So, what we have decided is that the entire team is working on the ECL guidelines.
So, we have a consultant also. We are taking all the care as far as the IT platform is
concerned for the ECL computation and other kinds of things. So, we will go to the
Board, get the entire preparedness and other things, get approved from the Board,
and then we will start making the provisions. So, we expect that from Q3 onwards we
will be making the provisions. Q3 and Q4 will be the 2 quarters when we should be
making the front loading of the provisions as far as the ECL is concerned. That is the
first part.
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Bank of India
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October 23, 2026
Second part is with respect to the how much it would be coming. I would just share
with you one number. If you see the SMA data which is there on page number 25 of
our slide, as I told earlier, our SMA number has now come down to around Rs. 2,500
crores above Rs. 5 crores, so which was more than Rs. 6,000 crores as on September
30th 2026 and it is only 0.3% of our standard assets. So, with this kind of very robust
Zonal Collection Centers that we have and the work which is being done from the
credit monitoring side in the bank, we are very confident that the overall ECL
provisioning will be at a very rational number for us and the impact being that our SMA
numbers are in control. That is one part. Second part, the ballpark calculation which is
there, the impact should be somewhere around 0.5% on the CRAR per annum. It
would be spread across over the next 4 years. And as you are aware that we have a
CRAR of more than 17%, which is well above the RBI threshold of 11.50%.
And with the profit already, we have made a net profit of more than Rs. 6,000 crores.
If, I give you the guidance, if we double that, so we should be having a profit of
somewhere around Rs. 12,000 crores with this kind of run rate. So, this profitability will
also add to the CRAR, and this there will be hardly any impact on the CRAR also in
that. So, by quarter 3, we will have the Board approval also, we will be in a clear
position to give you some clear guidance about the numbers. But definitely this should
start happening from the Q3 onwards.
Mr. Manoj Alimchandani
Fine, thanks. Excellent.
Moderator
Before we proceed, I would like to take an online question, sir. You gave a rough, you
gave a very clear guidance on the full year credit growth and all. From your feeling,
what type of feeling we are getting? Now the festive season, Dussehra, is already
over. But from kind of global headwinds coming, there’s a lot of uncertainty in the minds
what type of growth we’ll be having in terms of consumption. And this is the time
everybody goes out and spends. Everybody has been expecting for some relief from
the Government when they are announcing hopefully it should come by the Diwali. But
what is the kind of feeling we have in this quarter festive consumption growth? Also ecommerce and on also on the ground vehicles, homes etc. And also if you can just
highlight about what are the investments and applications of artificial intelligence for
our growth.
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Bank of India
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Q2 FY27 Earnings Call Transcript
October 23, 2026
Shri Rajneesh Karnatak, MD & CEO
So, as far as this headwind which are there, as you said, as I replied earlier also, I will
say the same thing that the economy is quite robust in that sense that GST collections,
as I said, on a monthly basis is now with a good run rate of more than Rs. 2 lakh crores
per month. And if you see the supply in e-way bill data, there also have nearly Rs. 13
to Rs. 14 crore of e-way bill getting generated every month. So, that kind of invoices
and transactions are happening in the economy. In spite of the West Asia crisis which
is there and in spite of the fact that some El Nino impact is coming, the Indian economy
has always been quite robust and we have been able to absorb it with the kind of
infrastructure, the supply chain that has been built, and also the warehousing that has
been built in the country. So, as of now, we do not foresee any kind of impact which is
coming out of that. As far as what the growth potential is there, as I already said that
we have a credit pipeline of somewhere around Rs. 80,000 crore. If you see, our global
loan book is somewhere around Rs. 8,55,000 crores. Loan book in the sense
outstanding as on 30th of September.
So, Rs. 86,000 crore of loan book means that we have a credit pipeline of nearly 10%
of our loan book. That’s a very handsome loan credit pipeline that we are having. At
present, we do not see any impact which may have on our business growth numbers
for this financial year.
Shri Rajneesh Karnatak, MD & CEO
Investment in AI. So, frankly speaking, we have just approved our AI policy from our
Board as per the RBI guidelines. We have already started scouting for certain AI kind
of features which are there. But at a very preliminary level, we already have now this,
our Data Lake project in which we are using AI as a predictive AI, not a generative AI,
as a predictive AI kind of thing which is there. The analytics lead which are coming
under that, we have already touched the number of somewhere around Rs. 21,000
crores.
So, in lot of the different areas, we are engaging with some of the vendors and other
things for having AI components, particularly on the asset book side, liability side,
wealth management, and also particularly on the transaction monitoring. So there we
are trying to have some AI engagement. So, but once the deal is signed or anything,
then only we can be able to divulge that. Thank you, sir.
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Bank of India
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October 23, 2026
Moderator
All right. I’ll take the next question from Mr. Siddharth Rajpurohit. He’s from Systematix
Institutional Equities. He has asked that within non-interest income recoveries are
higher, please share more light. Also, other non-interest income of Rs. 598 crore is
down by around 25%. So what all forms are part of this line item and why is it
significantly down quarter- on- quarter and year- on-year?
Shri Rajneesh Karnatak, MD & CEO
So, as far as our non-interest income is concerned, we have grown it from Rs. 2,200
crore in September ’25 to Rs. 2,700 crore. The main growth has come from recovery
from the written-off assets, where the growth has been 190% on a YoY basis, and now
it has touched Rs. 978 crores. And also from the treasury income profit from the
exchange transaction, where the growth is 157%, and it has touched the number of
Rs. 411 crores. So, and on the overall number, it is a YoY growth of 25%, and we are
very hopeful that we will be able to maintain this run rate of more than, Rs 2,500 crore
in an ongoing basis.
Moderator
Okay, thanks, sir. Mr. Aman from ICICI Securities wanted to ask that gold loan
outstanding and split into agriculture and retail gold. He wanted an explanation on that.
Shri Rajneesh Karnatak, MD & CEO
So, as far as the gold loan outstanding as on 30th September is concerned, we are
having a gold loan book of around Rs. 61,000 crores. And as far as the split is
concerned, so majority of this gold loan is booked under Agriculture, and some of
which is also in MSME also, and the other part is the Retail.
Mr. Bhavesh Shah
Yeah. Good evening, sir. My name is Bhavesh Shah. Sir, recently one prominent NBFC
has flagged concern about stress in their Gold Loan portfolio. So do you see this
similar trend for you, or for that matter, any other asset classes?
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Bank of India
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October 23, 2026
Shri Rajneesh Karnatak, MD & CEO
So, what we have seen from the media reports and other kinds of things, there are
certain issues in some of the NBFCs, Gold Loan NBFCs, where it is observed that
even when the account is SMA, fresh sanctions is taking place. So, that is what the
stress has been observed over there. For as far as our book is concerned, we do not
have any much stress over there. If I tell you the NPA number, it is also at a very low
number. It is hardly 1%.
Shri P.R. Rajgopal - Executive Director
0.13%.
Shri Rajneesh Karnatak, MD & CEO
Yes, 0.13% is there. So, we have a very clear SOP as far as the gold loan is concerned.
In the SOP, it is very clear the moment it becomes NPA, there are two notices that we
have to give to the borrower, after which we go for the auction of the gold which has
been pledged to us and unless and until there is some spurious gold and some fraud
happens at the time of selling we observed that some spurious gold was there. Majority
of the time full recovery happens in such accounts. So we do not foresee any risk in
our portfolio, and lot of guardrails we have now put in the portfolio, which also
increased because of the price volatility on a daily basis. Now our CBS platform is
putting the monitors, the value of the gold, so that the LTV, loan-to-value of 75%, is
maintained at all times. So, we are having an LTV of 75 in gold loan.
Moderator
We’ll take last two questions. You can proceed, sir. Please give me your name and
organization’s name.
Mr. Ramesh Bhojwani
Sir, Ramesh Bhojwani from Mehta & Vakil . One is an observation, point 4 on page 4.
Overseas deposits have increased by 11.52% to Rs. 1,37,401 crore. But overseas
advances have increased by 35.21% year-on-year to Rs. 1,51,160 crore. Is there any
specific cause or reason?
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Bank of India
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Q2 FY27 Earnings Call Transcript
October 23, 2026
Shri Rajneesh Karnatak, MD & CEO
Yeah, you are right. You have rightly observed that yes, advances in overseas we have
touched Rs. 1,51,000 crores. In deposit, this is Rs. 1,37,000 crores. So this, the entire
leverage part of the FCNR is booked in the international loan book. So that is why this
number is coming. So as I said that we have raised 2.2 billion, which is more than Rs.
20,000 crores. So everything is parked over here only.
Mr. Ramesh Bhojwani
And the second thought was inflation has spiraled beyond control. This is a very, very
strong feeling and a strong experience by across the economy, by all sectors. And the
unspoken word is RBI may not wait till December to announce another rate hike, and
this time it may be 50 basis points or even 75 to contain the inflation at any cost. If
that’s so, and if inflation still doesn’t come under control, there is a fear of the
projections made for GDP and growth may be toned down, if not on an alarming basis.
What are your thoughts and comments on the same?
Shri Rajneesh Karnatak, MD & CEO
No, there is nothing much in that comment. So this is the worst-case scenario, okay,
you are telling. So let us and when that scenario pans out, so definitely we will be
giving some guidance on that.
Moderator
With that we’ll come to the last question. Please proceed, sir.
Mr. Krish Porwal
Sir, very quick question. A new vertical is emerging and a lot of money is pouring into
AI-led Capex, specifically on the infrastructure side as well as GPUs and the quantums
are significantly large. So what is our view on this, and, you know, how are we
approaching such transactions? Because I’m sure there’ll be a lot of traction going
forward in the Indian market.
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Bank of India
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Q2 FY27 Earnings Call Transcript
October 23, 2026
Shri Rajneesh Karnatak, MD & CEO
So yes, as I said, that in the corporate book we have a credit pipeline of more than Rs.
60,000 crores, which is both domestic and international book and as I said, it is totally
secular, it is not only for one sector. We are there in infrastructure, we are there in
manufacturing, there are in the new renewable energy also. It is in Data Center also,
and it is for EV vehicles, batteries. Everywhere we have given either sanctions or inprinciple approvals. So a lot of good pipeline, robust pipeline we are having in the
corporate book in the Capex side. And it is totally secular pipeline which is there, and
it is not like for one or two sectors. It is spread across the sector. In fact, it is in steel
sector also. We have given sanctions for cement also, we have given sanctions in
textile also. So it is spread across the broadway.
Mr. Krish Porwal
Sir, I understand that we have an exposure to a lot of legacy industries, but specifically
what sort of growth do you foresee from this vertical that I’m speaking about?
Shri P.R. Rajgopal - Executive Director
Pharma?
Mr. Krish Porwal
No. GPU-led Capex, AI-led Capex.
Shri Rajneesh Karnatak, MD & CEO
AI-led Capex, okay. Data Centers kind of thing. So already we have given some
sanctions for Data Center, some in-principle approvals are already there. So a lot of
capacity is getting built up on data center. We are very mindful of that and we are
looking at certain transactions which are there. Some of the in-principles and final
approvals also we have given for the data center. And definitely this is one area which
is in our mind for funding.
Mr. Krish Porwal
Just a small clarification. Are we looking at just the infra side within this or GPUs as
well?
Page 21 of 24
Bank of India
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Q2 FY27 Earnings Call Transcript
October 23, 2026
Shri Rajneesh Karnatak, MD & CEO
Both.
Mr. Krish Porwal
Thank you.
Moderator
Sir, just one question. We would like to end now.
Mr. Pritesh Vora
Sir, this is Pritesh, our outstanding to real estate sector is a big proportion as we see
in the sector. Do you see any, what do you see, any stress coming forward for next
coming years? Right now it’s okay. But the sector lending is very large as compared
to other sectors, so how do you comment on that?
Shri Rajneesh Karnatak, MD & CEO
Real estate?
Shri P.R. Rajgopal - Executive Director
Commercial real estate.
Shri Rajneesh Karnatak, MD & CEO
CRE.
Shri P.R. Rajgopal - Executive Director
See, basically it is like this. Most of the real estate exposure is coming through housing
loans, okay? And commercial real estate as a project lending is very, very minuscule
in our bank. It is not even Rs. 2,000-Rs. 3,000 crores. So most of it is from housing
sector. It is houses, mortgage housing. So, we don’t see much problem there because
many of them are all ticket size of Rs. 50 lakhs - Rs. 60 lakhs is the average ticket
size. So most of them are in tier one.
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Bank of India
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October 23, 2026
Mr. Pritesh Vora
Percentage of the lending to the real estate developer would be what percentage?
Shri P.R. Rajgopal - Executive Director
No, it’s very very minuscule. I can give you the data subsequently. That’s what amount
is around Rs. 3000- Rs. 4000 crores. Not more. That’s all.
Mr. Pritesh Vora
And sir, as far as NBFC is concerned, I mean NBFC is there. That growth rate is also
quite a good growth rate.Do you see that retail is overreaching? Because we get a lot
of calls, I mean, generally, that, do you see this sector can come off, I mean, certain
period of time?
Shri P.R. Rajgopal - Executive Director
See, there are two things. It depends on the exposure that the NBFCs take in terms
of. If you look at our pool buyout or direct assignments that we take, most of them are
all backed by securities. Our unsecured portfolio is very less. It’s hardly 7% of the total
portfolio in retail. So NBFCs, they, who have a very typical exposure to personal loans
and other types of loans, they have a problem. Otherwise, people who are NBFCs
who are into SME lending, who are into LAP lending, there is no problem. We don’t
see much stress in that. And another thing that we do in terms of NBFC lending is we
look at the funding profile as well as the asset profile. We also look at the NPA ratios
over there and the collection efficiency ratios there very clearly before we take
exposures. So, we even in NBFC exposures, we have a robust system, that’s what it
is.
Mr. Pritesh Vora
And sir, infrastructure, as far as infrastructure sector is concerned, as YoY there is
some decrease. Do you see that the overall infrastructure spending has come down
as far as your exposure to particular industries?
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Bank of India
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October 23, 2026
Shri Rajneesh Karnatak, MD & CEO
No, it is not like that. See, you have to look at the outstanding. Like if you see also our
outstanding, it is more or less flat, right? In spite of the sanctions. So what is happening
in the system is that many infra projects which are achieving their COD, they are
coming for refinance, and they are being financed at a very low interest rate by other
institutions. So, we have left quite a few transactions where we had lent during the
construction stage where the COD happened, and after which we did not go into the
refinance kind of thing because it was at a very low interest rate. So this kind of thing
is there in the market which is happening. Some churning of assets are happening in
the infra side because of it. So otherwise also, whatever pipeline and sanctions we
have given, infra takes a lot of time to get disbursed because it gets disbursed in
stages. It takes at least 7 to 8 quarters to get disbursed the full infra loan, whether it is
a road, whether it is a port, or any other kind of transmission line and other things.
Mr. Pritesh Vora
Okay, sir. Thank you very much and all the best for the good results. Thank you very
much.
Shri Rajneesh Karnatak, MD & CEO
Thank you.
Moderator
Thank you everyone for joining us today, thank you Rajneesh sir and entire Bank of
India team. Have a nice day everyone.
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