The technical write-off represents more than accounting housekeeping - it signals management's confidence that economic conditions have stabilized sufficiently to return to pre-COVID provisioning norms.

“This is Rs. 2,345 crores was nothing to do with the PD and LGD which we have assessed for the current quarter. It is mainly a decision taken based on the coverage being continued for the last 5 to 6 years just before the COVID we started having a coverage of more than 50%. And we used to continue with that. To achieve that, we used to maintain 100% provision on certain assets and those assets we technically wrote off in the current quarter”

— S. Sunder (Joint Managing Director)

The used commercial vehicle market faces a structural supply shortage due to weak sales from 2019-2021. Management expects this shortage to reverse into a supply surge in FY26-28 as 2022+ vehicles enter the used market.

“…but the number of new vehicle sold between 19 to 21 was very low. So there is not enough supply of used vehicle in the market. The used vehicle market did not grow in the last year and maybe previous last year, which is expected to grow because supply will come into the market.”

— Umesh G. Revankar (Executive Vice Chairman)

Stress is concentrated in specific geographic clusters: borders of UP, Bihar, MP, and Chhattisgarh. The stress affects both passenger vehicle and MSME portfolios in these regions.

“See basically most of the passenger vehicle which we are financing has been in the rural segment and certain rural segment had some impact because of the slowdown in the economy and that too in the central part of India.”

— Umesh G. Revankar (Executive Vice Chairman)

“...We had told you that central part of India, that border of MP, Bihar, Chhattisgarh, there has been little slower growth in the economy and that had impacted the cash flow of the local business people and the transporters.”

— Y.S. Chakravarti (MD & CEO)

Excess liquidity of Rs. 31,000 crores (double the normal Rs. 19,000 crores) is masking true operational performance. The impact is 20-25 basis points on Net Interest Margin (NIM), suggesting underlying NIM is stronger than reported

“Yes, the liquidity what we used to always tell was that 3 months of future liabilities to be maintained as liquid assets and the number wise it used to be close to around Rs. 19,000 crores. That number is now around Rs. 31,000 crores. That is up from 19 to 31.The current quarter will be around 20, 25 basis points.”

— Y.S. Chakravarti (MD & CEO), Parag Sharma (MD & CFO)

85% of branch network is in semi-urban and rural areas, directly benefiting from agricultural recovery.Agriculture growth accelerated from 1.4% to 3.8%, with above-normal monsoon predictions for the current year.

“According to the advanced estimate of GDP for 2025, agriculture and allied activities recorded a 3.8% growth in real gross value added, a notable improvement from 1.4 in the previous year, 23-24..”

“Yes, rural economy will definitely buffer because most of our operations is in the rural. If you look at our branch network, nearly 85% of our branch network is in semi-urban and rural, which has some kind of what to call linking to the rural and the agricultural economy.”

— Umesh G. Revankar (Executive Vice Chairman)

Management voluntarily slowed personal loan growth due to regulatory concerns, not asset quality issues. They believe industry delinquencies have peaked and are now comfortable re-accelerating.

“I made it very clear that the slowing down is not because we are worried about the quality. It is also because the regulator was expressing concern on the personal loan growth in the industry and we thought it is better to be on the safe side so we slowed it down. And the reason why we are back on the pedal now is we have not seen any reason to be concerned in the last two quarters, number one.”

— Y.S. Chakravarti (MD & CEO)