Fino Payments Bank Limited — Q3 FY26

FINO Payments Bank Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=YU2LUIzrj4E Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good evening and welcome to the Feno Payments Bank Q3 FI26 earnings conference call hosted by 0:11 11 seconds co- India advisers. As a reminder, all participant lines will be in the listenon only mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:23 23 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that 0:32 32 seconds this conference is being recorded. I now hand the conference over to Mr. Rashi Khatri from Go India Advisor. Thank you and over to you Miss Khatri. 0:42 42 seconds Thank you Swap Nali. Uh good afternoon everyone and welcome to the Q3 and 9M FY26 earnings call of Feno Payments 0:50 50 seconds Bank. We have on call Mr. Rishi Gupta, managing director and chief executive officer, Mr. Ken Bing, chief financial 0:59 59 seconds officer, and Mr. Anuparwal, head of finance and investor relations. We must remind you that the discussion on 1:06 1 minute, 6 seconds today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the 1:13 1 minute, 13 seconds risks that the company faces. May I now request the management to take us through the financials and the business outlook subsequent to which we will open 1:22 1 minute, 22 seconds the floor for Q&A. Thank you and over to you S. 1:34 1 minute, 34 seconds Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we connect them back. 1:51 1 minute, 51 seconds [music] 2:18 2 minutes, 18 seconds Ladies and gentlemen, the line for the management has been connected. Over to you, sir. 2:24 2 minutes, 24 seconds Okay. Thank you, Rashi. A warm a warm welcome to all of you join us to joining us today for our quarter 3 F26 earnings 2:32 2 minutes, 32 seconds call. I would like to I would like to begin by highlighting the most significant development till date. 2:38 2 minutes, 38 seconds During the period your bank received in principal approval from the Reserve Bank of India to transition into a small finance bank making you know the first 2:45 2 minutes, 45 seconds and the only payments bank to reach this milestone. 2:50 2 minutes, 50 seconds This approval marks an important step in our journey and validates the work we have done over the last few years in building a compliant, scalable and 2:58 2 minutes, 58 seconds resilient banking platform. On behalf of the entire management team, I would like to thank the RBI, our board, our employees, especially our shareholders 3:06 3 minutes, 6 seconds for their continued support and confidence in Feno. This development is a key inflection point as we position 3:13 3 minutes, 13 seconds the franchise for its next phase of growth, allowing us to deepen customer relationships and expand our role in advancing financial inclusion in 3:22 3 minutes, 22 seconds reasonable in in responsible and sustainable manner. With SFB license, we add multiple revenue streams to our 3:29 3 minutes, 29 seconds existing business model. Over the first nine months of FI26, our focus have been very deliberate and consistent around 3:37 3 minutes, 37 seconds quality over quantity. Whether it is merchant, public partner onboarding, deposit growth or client acquisition. We 3:44 3 minutes, 44 seconds have consciously chosen to prioritize sustainability and scalability over short-term volume growth. This approach 3:53 3 minutes, 53 seconds becomes especially critical as we enter the SB transition because the foundation we build today will define the quality 4:00 4 minutes of balance sheet returns and risk profile over the coming years. 4:05 4 minutes, 5 seconds As we move closer to the SFB phase, your biggest bank strength is that we enter the this journey with a strong CASA based liability of over 2,500 crores. 4:15 4 minutes, 15 seconds [snorts] 4:15 4 minutes, 15 seconds Add to this with other bank add to this deposits with other banks of about 500 crores means that we are sitting on nearly 3,000 cr of low cost deposits. 4:25 4 minutes, 25 seconds Kasa for us is not merely a funding source. It is a strategic mode. It provides us with a structurally low and stalable cost of funds which has 4:34 4 minutes, 34 seconds remained under 2% for over the 9 months period. 4:40 4 minutes, 40 seconds This gives us a strong structural advantage that allows us to design the lending business 4:48 4 minutes, 48 seconds from many other SRBs. This low cost of funds will enable us to maintain name of around 10% on a largely secured 4:56 4 minutes, 56 seconds portfolio. This will be driven by products such as loans to MSME affordable home loans, LAP, microlabs and select gold loans. We will remain 5:05 5 minutes, 5 seconds disciplined on loan to value ratios, customer selection and ticket sizes. 5:09 5 minutes, 9 seconds This calibrated approach is deliberate and is aimed at ensuring predictable credit cost which we believe can be maintained sub 1% over a cycle as the loan book scales. 5:20 5 minutes, 20 seconds From a medium-term perspective as we transition into an SB, our aspiration is to scale the business meaningfully while continuing to maintain discipline. Our 5:29 5 minutes, 29 seconds loan book aspiration is in the range of 8 to 10,000 cr by fi30 and this growth will be phased and prudent. We expect 5:37 5 minutes, 37 seconds the credit deposit ratio to be around 75% in the initial 3 four years. Over the medium term our aspiration is to 5:43 5 minutes, 43 seconds build build towards a 20% plus roe driven by a low cost of funds disciplined credit cost and operating leakage. Another important 5:52 5 minutes, 52 seconds differentiator in our sb journey is our merchantled ecosystem. 5:57 5 minutes, 57 seconds Today we engage with over 20 lakh merchants which gives us a deep onrow footprint and a strong base to thoughtfully extend our crate offering 6:06 6 minutes, 6 seconds and drive our sourcing over time. This model allows us to operate with lower cost lower acquisition cost better 6:14 6 minutes, 14 seconds customer insight and stronger engagement and collections and we believe it will continue to remain a key structural advantage as our business scales. 6:23 6 minutes, 23 seconds In summary, our key differentiator will be merchantled asset light sourcing model that is non-brink and motor and 6:30 6 minutes, 30 seconds limited branches and asset center to complement our existing distribution network. We are not expecting to spend more than 15 crores on physical infrastructure on an annual basis. 6:42 6 minutes, 42 seconds On the execution front, we have crossed a critical milestone on the technology side by going live on hollow the core projects and migration of our core 6:50 6 minutes, 50 seconds banking system to final. While some stabilization is natural in our any large migration, the heavy lifting is behind us. This provides us with a 6:59 6 minutes, 59 seconds flexible and scalable technology by phone that allows us to launch products quickly, customize offerings and scale without proportionate increase in cost. 7:08 7 minutes, 8 seconds Apart from the technology, we need to hire talent for the critical vertical which also resonates our DNA and continue to be differentiated. 7:16 7 minutes, 16 seconds With this, the heavy lifting of the technology cost is over and we expect to build the digital technology stack for SAB with about 100 crores over the next one year. 7:26 7 minutes, 26 seconds As we build the SAB, we are equally and pushing more on our current business. We expect the current business along with growth to contribute to about 75% of the overall revenue by FI30. in FI30. 7:39 7 minutes, 39 seconds Over the first nine months of FI26, we have continued to strengthen the quality of our customer base with Kasa being the cornerstone of our strategy and the 7:47 7 minutes, 47 seconds primary growth engine. During quarter 3 FI26, average deposits grew 32% a year-on-year basis to 2496 growth, 7:56 7 minutes, 56 seconds reflecting continued customer trust and deeper engagement. We added over 8.7 lakh accounts in this quarter, taking the total number of accounts to 1.68 8:05 8 minutes, 5 seconds crores. More importantly, the focus has shifted from pur accounts acquisition to balance quality with the average casa 8:12 8 minutes, 12 seconds balance improving by around 9% year on year to,314 rupees. Digitally active customers grew 22% yearonear to nearly 8:20 8 minutes, 20 seconds 60 lakh customers with while renewal income grew 19% yearon year to 57 cr reinforcing stickiness and annual potent nut potential. 8:30 8 minutes, 30 seconds Digital engagement has continued to strengthen in this financial year. 8:35 8 minutes, 35 seconds Digital throughput now accounts for approximately 56% of the total throughput with digital transaction count growing 17% year on year to more 8:45 8 minutes, 45 seconds than 89 crores in in quarter 3 FI 26 in digital payment business. Enhanced regulatory scrutiny across the ecosystem 8:53 8 minutes, 53 seconds continued to impact throughput in this quarter as well. However, we are seeing early tailwinds in this business accordingly. We are also expanding our 9:02 9 minutes, 2 seconds business reach through strategic tires with payment aggregators and payment gateway partners which we believe will support recovery growth as in the 9:10 9 minutes, 10 seconds investment as the environment normalizes. As on December 25, we had 347 active merchants in this segment 9:17 9 minutes, 17 seconds compared to 175 in September 25. Coming to cashled business, CMS segment continues to see mod moderation in 9:25 9 minutes, 25 seconds revenue due to pricing competition and structural shifts. Despite the sectoral headwinds, we have seen a 3% quarteronquarter growth in in the throughput. 9:35 9 minutes, 35 seconds Traditional business comprising of remittance, a microATM saw a decline in revenue by 40% as the ecosystem move 9:43 9 minutes, 43 seconds towards digital channels. These products though continue to bring in footfall and remain a hook for our new potential kasa 9:51 9 minutes, 51 seconds customers. To summarize, quarter FI26 and the first nine months of financial have been about discipline, consolidation and preparation. We are 10:00 10 minutes seeing the benefits of strategy reflected in stronger kasa improving digital engagement, a healthier revenue mix, a resilient margins. As we move 10:09 10 minutes, 9 seconds forward, our focus remains on building a differentiated, scalable and sustainable banking strategy that is well prepared for the SFB opportunity head. With this, 10:18 10 minutes, 18 seconds I will now hand over to Kithan to take you through the financial performance in more detail. 10:29 10 minutes, 29 seconds Thank you Rishib and a good evening everyone. I'll take you through the financial and operating highlights for third quarter and 9 months ended FYI 26. 10:38 10 minutes, 38 seconds As Vishi has already outlined the operating environment during Q3 continued to reflect a broader industry transition, particularly across transactionled business and digital. 10:50 10 minutes, 50 seconds Against this backdrop, our focus remain firmly on strengthening the core value drivers of franchise including customer engagement, disciplined cost management 10:59 10 minutes, 59 seconds and readiness for the next phase of bank's evolution. From a financial perspective, this consolidation phase has been about preserving earnings 11:07 11 minutes, 7 seconds quality, improving the efficiency of operating model and ensuring the further incremental scale continues to translate into sustainable profitability. 11:16 11 minutes, 16 seconds During Q3 FY26 total throughput stood at approximately 1.18 lakh crores while the 11:24 11 minutes, 24 seconds throughput for 9 months period reach 3.56 lakh crores reflecting an 8% yi 11:31 11 minutes, 31 seconds growth within this kasa and digital activity continued to show healthy momentum during 9 month FYI26 digital 11:40 11 minutes, 40 seconds throughput increased by approximately 31% yi taking the digital share of total throughput to 55% up materially from the prior year which was 46%. 11:52 11 minutes, 52 seconds Over a 9-month period digital throughput reached 1 lak 96,740 crores reinforcing the structural shift 12:00 12 minutes towards scalable and account link account linked activity. This evolution is also reflected in the revenue mix. 12:07 12 minutes, 7 seconds Higher margin business led by CASA and renewalled income streams now contribute approximately 41% of total revenue while 12:16 12 minutes, 16 seconds the share of low margin volume intensive transaction business has declined to around 18%. 12:22 12 minutes, 22 seconds This improvement in mix has translated into meaningful expansion in margins. 12:27 12 minutes, 27 seconds Importantly, these revenues are supported by recurring engagement, lower incremental servicing cost and operating 12:35 12 minutes, 35 seconds leverage rather than pure transaction intensity, resulting in greater sustainability and visibility of cash flows even in a volatile transaction environment. 12:45 12 minutes, 45 seconds At the same time, legacy transaction segments continue to moderate broadly in line with industry trends. Overall, the 12:53 12 minutes, 53 seconds transaction business declined by 12% quarteron quarter and 40% YI for Q3 FYI 13:01 13 minutes, 1 second 26 reflecting structural shift from cashbased transactions to UPI coupled with lower DBT inflows. 13:10 13 minutes, 10 seconds CMS throughput remain under pressure due to pricing competition take rate down to 0.16% as compared to 13:18 13 minutes, 18 seconds 0.17% in Q2 FY26 although volume increased sequentially by 3% to 18,850 crores turning to 13:28 13 minutes, 28 seconds financial performance Q3 FY26 revenue stood at 394.4 4 crores reflecting a 13:36 13 minutes, 36 seconds sequential decline of 1% and a yi decline of 15%. 13:42 13 minutes, 42 seconds Revenue for 9 month FYI26 declined to 1,247.9 crores representing 8% yawwide decrease. 13:52 13 minutes, 52 seconds Despite despite this due to margin expansion excluding one-offs, the profitability remained resilient. 14:00 14 minutes IBITA for Q3 FI 26 stood at 63.9 crores with IBITA margin improving to 16.2%. 14:09 14 minutes, 9 seconds For 9 month period, ITA expanded to 187.1 Kores with a margin expansion of 14:15 14 minutes, 15 seconds over 240 basis points on a Y basis. At the PBT and PAT level, Q3 FI26 PBT stood 14:24 14 minutes, 24 seconds at 17.5 crores excluding oneoff which was 3.1 crores. This was at 20.6 crores. 14:31 14 minutes, 31 seconds While PAT was at 12.2 2 crores for 9 months period PB stood at approximately 63.3 14:38 14 minutes, 38 seconds crores ex including one off reflecting a 20% ywide decline operating expenses 14:46 14 minutes, 46 seconds remained tightly controlled opex for Q3 FY26 stood at 84 crores while 9 month 14:53 14 minutes, 53 seconds OPEX increased by only 2% on a Y basis to 261.3 crores the cost to income ratio 15:00 15 minutes for the quarter stood at 33.1% reflect expecting a temporary reduction revenue moderation while underlying cost discipline remain intact. 15:10 15 minutes, 10 seconds Now going towards segment very quickly kasa revenues in Q3 FYI 26 are at 162.8 15:18 15 minutes, 18 seconds 8 crores reflecting a 17% YI growth for a 9-month period. Casa revenue increased 15:25 15 minutes, 25 seconds to 476.3 crores up by 22% Yi basis. Within this kasa renewal 15:32 15 minutes, 32 seconds income increased to 174.9 crores in 9 month FY26 from 133.9 crores in in 9 month period 15:42 15 minutes, 42 seconds FYI 25 reflecting a 31% YI growth. While Q3 FY26 renewal stood at 57% up by 19% 15:53 15 minutes, 53 seconds on a YI basis. Digital payment revenue for Q3 FY26 stood at 62.7 crores 16:00 16 minutes reflecting a 43% Y decline driven by regulatory tightening and moderation in certain 16:07 16 minutes, 7 seconds categories. For a 9-month period, digital revenue were at 232.5 crores compared to 255.9 crores in 9 month FI25, representing a 9% YI decline. 16:21 16 minutes, 21 seconds Transaction segment continued to reflect the broader industry transition. CMS revenue in Q3 FI26 were 29.6 6 crores 16:31 16 minutes, 31 seconds declined by 27% while 9 month revenue stood at 94.9 crores reflecting a 22% Y 16:39 16 minutes, 39 seconds decline. MATM and APS revenue declined to 35.1 crores in Q3 FYI 26 a 25% Y 16:48 16 minutes, 48 seconds decline while 9month revenue stood at 117.4 crores lowered by 14% on Y basis. 16:56 16 minutes, 56 seconds Remittance revenues moderated to 34.3 cr in Q3 FI26 17:03 17 minutes, 3 seconds reflecting a 50% YI decline and to 120.8 cr for a 9-month period reflecting 57% 17:11 17 minutes, 11 seconds YI decline consistent with the reduced reliance on cash DMT uh flows as well as the ecosystem which which we have 17:20 17 minutes, 20 seconds mentioned in earlier calls. A key highlight of Q3 has been the continued improvement in revenue quality driven by 17:28 17 minutes, 28 seconds the deliberate shift in mix. Low margin transactionled business now contribute around 18% of total revenue while high 17:37 17 minutes, 37 seconds margin business primary led by CASA contribute around 40%. This shift has 17:44 17 minutes, 44 seconds driven a 5.4% 4% or 540 basis points yearon-year increase in the net revenue 17:51 17 minutes, 51 seconds margin with this net revenue margin at 37.5% in Q3 as compared to 32.1% 18:00 18 minutes in Q3 last year as a result despite revenue moderation profitability has remained resilient with Q3 IITA at 63.9 18:09 18 minutes, 9 seconds crores up 6% YI and IITA margins improving to 16.2% 2% compared to 13% 18:16 18 minutes, 16 seconds in in the previous year. On a 9-month basis, ITA grew by 10% on a Y basis to 187 crores reflecting discipline 18:25 18 minutes, 25 seconds execution and a better mix on SFB transition as Vishi has already outlined we continue to make steady progress 18:33 18 minutes, 33 seconds across people, technology, governance and operating readiness. Our cost of funds of 4% as reflected in slide 15 of 18:42 18 minutes, 42 seconds our investor deck would be our key differentiator in SFB operations and thereby driving profitability. 18:49 18 minutes, 49 seconds With this I now hand it over back to the moderator for any questions. Thank you. 18:57 18 minutes, 57 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 19:05 19 minutes, 5 seconds star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you 19:12 19 minutes, 12 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 19:20 19 minutes, 20 seconds wait for a moment while the question symbol. 19:35 19 minutes, 35 seconds A reminder to all the participants, you may press star and one to ask a question. 19:47 19 minutes, 47 seconds We have the first question from the line of Anand Dharma from MK Global. Please go ahead. 19:53 19 minutes, 53 seconds Yeah. Hi sir. Uh thank you for the opportunity and congratulations for the uh uh license. Uh sir my question was 20:01 20 minutes, 1 second first related to our existing business where we are continuously seeing a downfall in our revenues uh because of the transaction banking business uh uh 20:09 20 minutes, 9 seconds undergoing some stress. Um our CML business also is down. So have we lost any uh bigger client over there uh 20:17 20 minutes, 17 seconds because of the competition? If yes if you can talk about uh which are the clients that we have lost. Is there any pipeline to acquire new customers over 20:25 20 minutes, 25 seconds there? Uh secondly, my question is about the uh in the presentation you've talked about uh that how you're going to 20:32 20 minutes, 32 seconds transit into uh SFP by 2030 but then what's a starting point for that transition whether we expect that to 20:41 20 minutes, 41 seconds happen from FI28 uh by then we would be fully operational as an SFP and if yes how that runup is 20:49 20 minutes, 49 seconds going to happen. You also talked about some overnight digital float of about 500 kores. Uh if you can just explain what is that digital float that you're talking about. 21:01 21 minutes, 1 second Uh thank you. Thank you Anan. Let me just go first question first on the CMS. Uh uh yes I'll just quote some numbers. 21:10 21 minutes, 10 seconds Q3 uh revenue is 29.6 crores and um Q2 sequentially it was around 30.9 crores. 21:19 21 minutes, 19 seconds So yes it has indeed reduced on a sequential basis. However as I mentioned in my commentary it is more about the 21:26 21 minutes, 26 seconds take rate volume and throughput during the same period in fact has increased uh marginally by around 500 crores. So CMS 21:35 21 minutes, 35 seconds a we do not have any uh whilst we have competition challenges it is more about uh the the the take rates we have not uh 21:43 21 minutes, 43 seconds lost any kind of you know uh revenue partner which is coming across. So trust that answers your CMS point. Uh your 21:52 21 minutes, 52 seconds second one was regarding the SFB timelines correct? 21:58 21 minutes, 58 seconds Yes. Yes. And if you can just run us through like how the the cost is going to be till FI28 when you basically start up if you start from 28. 22:07 22 minutes, 7 seconds Okay. Thank you. Firstly I think you know. 22:14 22 minutes, 14 seconds Okay. Uh so so two aspects Rishi mentioned it in his uh commentary as well. We have around 100 odd kores of 22:23 22 minutes, 23 seconds incremental capex IT investment which would come through in year one. we approximately have uh you know uh 22:31 22 minutes, 31 seconds incremental 50 odd crores of uh infrastructure capex which will come 22:38 22 minutes, 38 seconds through. So these are the two capex we need to be cognizant that you know a larger part of our business is not going to come through branches and we've done 22:47 22 minutes, 47 seconds some technology spends already. So these are the two aspects in terms of capex which will come through or uh in in in in the in the coming year. 22:56 22 minutes, 56 seconds When do we intend to operationalize it? 22:59 22 minutes, 59 seconds As all of you guys are aware, it is a process. RBI has given us 18 months period to implement the same. We are 23:08 23 minutes, 8 seconds working towards uh this and you know somewhere we looking at the last quarter of this financial year if everything works right in terms of preparation and and working with RPI. 23:23 23 minutes, 23 seconds Sorry an I did not write your third question. 23:26 23 minutes, 26 seconds Yeah. So no no problem. So I think you said that uh this year basically or FI27 fourth quarter is when you expect the final license to come back. 23:35 23 minutes, 35 seconds Yeah. The in principal licenses come thereafter it is a process that you know we have to make some preparations and then work along with RBI and and you 23:44 23 minutes, 44 seconds know this is a time when we plan to operationalize it. 23:48 23 minutes, 48 seconds Sure. And so FI28 is when you would so first quarter of FIA 28 is when you would want to start a full-fledged SFP 23:56 23 minutes, 56 seconds where you start lending business right is that a correct yeah that's correct okay and before that you will have to 24:03 24 minutes, 3 seconds offload your BC business as well or like you can continue for a while you can get an extension yes 24:12 24 minutes, 12 seconds that is the plan okay sure and if you can just run us through like know how the FI28 would look like in terms of asset the business 24:19 24 minutes, 19 seconds in terms of operational cost or or or bulk of the capex related cost and depreciation or people onboarding will 24:26 24 minutes, 26 seconds be largely done in FI27 itself. So FI28 we have more of lending business coming through and the operational cost come down. If you can just uh take us through 24:34 24 minutes, 34 seconds FI27 and FI28 how it looks how it should look like. 24:39 24 minutes, 39 seconds No. So Anand what we've essentially done if you go to our SFP specific slides we have put how do we expect to grow our 24:48 24 minutes, 48 seconds lending business and reser liabilities as well where do we intend to grow how are we turning and I've also mentioned 24:55 24 minutes, 55 seconds out what kind of an preparation which we are doing as at the current stage we're not putting across 25:02 25 minutes, 2 seconds an FY28 numbers but but that is something which we'll work through as 25:08 25 minutes, 8 seconds However, however, our our outline of our assets, liabilities, customer acquisition and more importantly the 25:16 25 minutes, 16 seconds cost of funds all all have been you know articulated in the investor deck. 25:23 25 minutes, 23 seconds Sure. But then so to interrupt how sorry to interrupt Anand I would request you to kindly read. There are participants waiting for their turn. 25:34 25 minutes, 34 seconds Sure. Thank you. 25:39 25 minutes, 39 seconds We have the next question from the line of Majid Ahmed from Pinpoint X Capital. Please go ahead. 25:46 25 minutes, 46 seconds I'm audible sir. Uh yes you are. 25:50 25 minutes, 50 seconds Yes sir. Uh thank you for the opportunity sir. My first question is you are entering the SV space with 100% 25:56 25 minutes, 56 seconds Kasa funded balance sheet. Unlike most SFBs it had to build a kasa post conversion. How does this structurally 26:04 26 minutes, 4 seconds change your approach to loan pricing, risk appetite and growth sequencing compared to traditional SPS? 26:15 26 minutes, 15 seconds So thanks uh it's a it's a it's a it's a very fair question. Uh we start off and Rishi mentioned it as well. We start off 26:23 26 minutes, 23 seconds with an opening balance of around 3,000 plus Kores. And if you go to slide number 15 in in terms of our current model itself 26:32 26 minutes, 32 seconds we we know we we are saying that we can have incremental 5,000 Kores. So with this our distinct stated and this and 26:40 26 minutes, 40 seconds and and and and our lean model if you go to slide number 16 we are we made ourselves 26:48 26 minutes, 48 seconds prepared or we preparing for a secured lending with the cost of funds advantage which we have and I again draw back the 26:55 26 minutes, 55 seconds tension to slide 15 where we said approximately FY30 we look at 13,300 crores of um deposit at cost of funds of 27:04 27 minutes, 4 seconds 3.9% as you were alluding and if We go to slide number 16. The kind of products which we are looking at is affordable 27:11 27 minutes, 11 seconds housing, secured loans under MSME, LAP, microlap, gold loan. So that will constitute the major part of our um uh 27:20 27 minutes, 20 seconds our our lending portfolio and that along with this secured products we can maintain our profitability largely 27:27 27 minutes, 27 seconds because of maybe around 300 basis points advantage which we have we service any other SFB on cost of fund. So that is 27:35 27 minutes, 35 seconds our thought process in terms of leveraging our opening balance and and going for a quality secured lending book. 27:44 27 minutes, 44 seconds Okay. Got it. Uh and sir most SFB had to clean up asset quality while building Kasa. So Fino is doing the reverse. How 27:53 27 minutes, 53 seconds does change the risk profile in the first three to five years? 27:58 27 minutes, 58 seconds Can you come again [clears throat] with the question? Sir most SFB had to clean up asset quality while building Kasa. So 28:05 28 minutes, 5 seconds Fino is doing the reverse. How does this change the risk profile in the first 3 to five years? 28:11 28 minutes, 11 seconds So it's a very relevant question and it goes to the broad genesis of the SFB also see as Kithan mentioned we are a 28:18 28 minutes, 18 seconds liability first bank. So we are not carrying any one is that our liability book is already there roughly 3,000 cr 28:26 28 minutes, 26 seconds compared to many compared to the SBS who came 10 years back didn't have any liability experience we obviously don't have a lending experience. So for us the 28:34 28 minutes, 34 seconds asset quality or the the treadmill on which they were running is not there. So that is where we have mentioned in my I 28:42 28 minutes, 42 seconds mentioned in my own uh remarks also that we'll build up a prudent book over a phase manner and more on the secured side. So with so that our target is to 28:51 28 minutes, 51 seconds keep the credit course around 1%. And that is what we our focus is also I hope that broadly answers your uh question 28:59 28 minutes, 59 seconds that because we are not having any opening assets neither we are running on a treadmill where we are growing at a particular pace we will grow it uh 29:08 29 minutes, 8 seconds slowly but our liability will be the driver for it. 29:13 29 minutes, 13 seconds Got it sir. The final question for myself sir and what is the uh realistic timeline to meaning meaningfully deploy capital into lending and start uh 29:22 29 minutes, 22 seconds reflecting SSB level ROA and ROE uh in reported numbers and what ROA and ROE 29:28 29 minutes, 28 seconds should we expect in the medium term sesh hi maj some of this I've attempted to 29:35 29 minutes, 35 seconds capture in slide 19 typically and I think Anund also asked this question if we are looking at 29:44 29 minutes, 44 seconds operations starting last quarter FI27 or first quarter FI28. 29:50 29 minutes, 50 seconds So that's where capital would be deployed. I also draw attention to our current net worth. We are adequately capitalized for first phase of growth. 30:00 30 minutes ROE we are looking at uh in in midterm and that's what we put it as phase one on slide number 19. We're looking at the 30:08 30 minutes, 8 seconds 20% of plus ROE which can come true. The reason which we've earlier articulated both me and Rishi is uh the lean model 30:16 30 minutes, 16 seconds and the cost of fund advantage which we carry across. 30:22 30 minutes, 22 seconds Okay. Uh thank you sir. Thank you. 30:30 30 minutes, 30 seconds Thank you ladies and gentlemen. In order to ensure that the management will be able to address all the questions in the 30:37 30 minutes, 37 seconds conference call, we request you to kindly limit your questions to per participant. If you have a follow-up question, please rejoin the queue again. 30:48 30 minutes, 48 seconds We have the next question from the line of San Ji from Pinterest Capital. Please go ahead. 30:54 30 minutes, 54 seconds Hi sir, good afternoon. So I have couple of questions. The first one being that uh what would be our medium-term 31:01 31 minutes, 1 second guidance on the margin side and the second question is around the cost uh I mean how should we look at the cost ratio now and in the coming quarters. 31:15 31 minutes, 15 seconds So I presume you are asking this question in the context of the next couple of quarters you know as a payment bank. 31:23 31 minutes, 23 seconds Is that right? Yeah. 31:25 31 minutes, 25 seconds Fair enough. Fair enough. Thank you. uh so you know as I mentioned in my earlier commentary our margins are at historic high in terms of 37.5%. 31:36 31 minutes, 36 seconds Now that is happening due to uh the change in the product mix and earlier we mentioned our transaction old low margin 31:44 31 minutes, 44 seconds cash business is is is reducing and and and now kasa contributes 41% of the 31:50 31 minutes, 50 seconds margin. So from here on we we can expect margins to be uh largely uh u uh 31:59 31 minutes, 59 seconds rangebound uh in terms of a next couple of quarters and that also depends upon how our uh digital uh business which is 32:08 32 minutes, 8 seconds bit which has been a bit benign over last quarter or so how that recovers but largely we expect that to be rangebound. 32:16 32 minutes, 16 seconds Second expect uh second question which we are coming across uh is in terms of cost. Uh yes our cost will you know with 32:25 32 minutes, 25 seconds with some challenges over our or some moderations over our transaction banking business we've maintained a very high 32:32 32 minutes, 32 seconds cost discipline uh in terms of last couple of quarters which is reflected in Y numbers as well as sequential numbers. We'll continue to do 32:41 32 minutes, 41 seconds that. Uh in terms of our um cost opex cost management there might be some incremental 32:49 32 minutes, 49 seconds depreciation which we are expecting as we just completed our finical project as well and as we had mentioned it earlier. 32:55 32 minutes, 55 seconds So other than that I think the cost should you know be a trend line with operating efficiencies will continue. 33:02 33 minutes, 2 seconds Uh any ball numbers that we can assume or we can estimate? 33:08 33 minutes, 8 seconds No, as I said, we've not given an estimate for the next year, but I have given the drivers how it will all work across as well. Margins, I have mentioned it rangebound cost will be 33:16 33 minutes, 16 seconds treading currently uh and on the basis of the current trend line plus the incremental depreciation which we may have. 33:26 33 minutes, 26 seconds Okay. And so just one last question if I can squeeze in. Uh if you is there a breakup on how do we see the loan book 33:34 33 minutes, 34 seconds shaping in terms of our product mix sourcing channels and year? 33:41 33 minutes, 41 seconds Uh yeah I think uh again if I go back we have put the products which we are going across in as Vishi mentioned we are a 33:50 33 minutes, 50 seconds liability first bank which we want to uh you know put across there. We've had some more details coming across how much 33:57 33 minutes, 57 seconds would be low cost liabilities at 1.7% which is more than 60% of our portfolio in terms of products which we have 34:04 34 minutes, 4 seconds identified. How do we build that product and what will be the percentage uh is something which we will you know which will evolve over next quarter or two. 34:13 34 minutes, 13 seconds However, the point to emphasize which we are very clear is we are not going to go rampage. We are going to take a very 34:20 34 minutes, 20 seconds phased and a cautious approach in building our affordable housing secured loan MSME lap microlap gold loan and in certain cases personally. 34:33 34 minutes, 33 seconds Yeah, that's helpful. Thank you so much. I wish you all the best. Thank you very much. 34:39 34 minutes, 39 seconds Thank you. We have the next question from the line of Dup Sha from Ambikap and Capital. Please go ahead. 34:47 34 minutes, 47 seconds Yeah. Hi team first of all congratulations on getting in principle approval for small finance bank uh Rishi my question pertains to your digital 34:56 34 minutes, 56 seconds should we see 62 crores as your base now and uh hopefully true you need to be slightly louder unfortunately can you hear me now now it is better 35:04 35 minutes, 4 seconds now it is better yeah first of all congratulations on getting the approval it was hardford uh my first question is pertaining to your 35:12 35 minutes, 12 seconds digital revenue uh when do we start seeing uh uh growth here because uh uh this year we have seen a sharp degrowth 35:22 35 minutes, 22 seconds uh but uh can we now see because your UPI contribution has also come down from uh the highs of 1.62% to now 1.41% 41% 35:30 35 minutes, 30 seconds when do you see this stabilizing and growing? 35:33 35 minutes, 33 seconds So both of both of them are related in a way uh because the digital payments business from a high of 11,000 crores 35:41 35 minutes, 41 seconds per quarter to 4 and a half,000 crores per quarter has resulted in the degrowth 35:47 35 minutes, 47 seconds of that UPI share also. See let me just try to explain. You see there is no challenge as far as the growth is 35:55 35 minutes, 55 seconds concerned. We have the railroads, we have the partners, there are enough and more merchants which are there in the market. Enough and more use cases are 36:03 36 minutes, 3 seconds also building up on the UPI side. Last year uh because of the real money gaming ban, there was some uh drop which 36:11 36 minutes, 11 seconds happened on account of some merchants as such but our volume was not very high. 36:17 36 minutes, 17 seconds So but more importantly what is happening is that the increased scrutiny which we have to do from LEA point of 36:25 36 minutes, 25 seconds view the regulator point of view uh is is affecting the onboarding of merchants 36:32 36 minutes, 32 seconds uh it once one is that it slows down the onboarding. Secondly the merchant themselves the number of merchants which 36:40 36 minutes, 40 seconds we can onboard also comes comes down because we have to check now multiple things before we onboard. So in the last 36:47 36 minutes, 47 seconds one year there has been a big transition in terms of the entire uh regulation monitoring onboarding for uh merchants 36:56 36 minutes, 56 seconds for digital payments and you can understand there is so much of focus from the PMO the ministry of affairs the 37:04 37 minutes, 4 seconds leas regulator on the cyber digital frauds which are happening. 37:10 37 minutes, 10 seconds So that is where uh we have been uh and not only we largely every bank has slowed down uh this business just to 37:18 37 minutes, 18 seconds have a better check and control in terms of the onboarding and the monitoring of transactions. So we believe uh that this 37:27 37 minutes, 27 seconds this kind of uh while we were expecting that this number would be better from September if you see I mentioned also the number of merchants have gone up. We 37:36 37 minutes, 36 seconds should continue to see growth on this business but a large part of it depends on the directions which we get from the 37:44 37 minutes, 44 seconds leas the I4C and the regulator. So while business opportunity is there and from a technology and other points we are all 37:52 37 minutes, 52 seconds geared up to do double triple the numbers which we have done in this quarter but because of the heightened scrutiny which is there and the 38:01 38 minutes, 1 second direction which we have from the regulator we have kept it uh benign on this uh as as of now we'll have to see 38:09 38 minutes, 9 seconds how the environment changes and accordingly we'll have to take a call on it. So it's more of a cautious approach which we mentioned. But to counter this 38:18 38 minutes, 18 seconds what we have also started to do uh there have been recent guidelines which have come from RBI as recent as in November 38:25 38 minutes, 25 seconds 25 which talks about uh onboarding of PAPG uh platforms. So as I mentioned 38:33 38 minutes, 33 seconds also we are now pushing more on uh PAPG platforms or PAPG companies but the revenue margins in that is very low 38:42 38 minutes, 42 seconds compared to a program manager kind of a platform. So it's a it's a calibrated approach uh which Kithan also mentioned. 38:52 38 minutes, 52 seconds Uh right uh thank you for this answer. 38:55 38 minutes, 55 seconds Uh Rishi just next question on the higher B of your CASA till 2030 I'm assuming you have projected a 30% CAGR 39:03 39 minutes, 3 seconds of kasa growth uh uh do you think it's possible at 1.7% because then now all the banks are also coming down I 39:10 39 minutes, 10 seconds understand that you have a unique proposition but then at on a higher base growing at 30% kasa because your whole 39:18 39 minutes, 18 seconds thesis of low funding depends on your kasa growth of 30% right yeah it's a very valid question in fact We debated quite a bit internally on 39:27 39 minutes, 27 seconds this point. See what the kind of customers which continue to get on a payments bank are largely transactional. 39:34 39 minutes, 34 seconds People who open bank accounts with us for transaction purposes. So they are nearly not looking at uh uh what is the 39:41 39 minutes, 41 seconds rate of interest they are getting on a savings bank account. So they keep about 2 3,000 4,000 rupees of deposit. People 39:48 39 minutes, 48 seconds who have higher deposits definitely look at a higher rate of interest. So the model in which we are building it up to 39:56 39 minutes, 56 seconds one lakh of rupees we will keep the same rate of interest which is there currently above one lakh of rupees which means we move up from this customer 40:04 40 minutes, 4 seconds segment to a higher customer segment which may not be running into lakhs right like we had about 30 35 lakh 40:11 40 minutes, 11 seconds customers a year will be not of that level will be of much lower level will be people who will give more than one lakh rupees of balance so the moment 40:19 40 minutes, 19 seconds they give more than one lakh I can offer them a empty kind of a saving bank account. So I don't need to change my 40:26 40 minutes, 26 seconds current less than 1 lakh rupees rate of interest. I hope it it kinds of explains the strategy which we are working on. 40:36 40 minutes, 36 seconds Uh right and uh is it clear or is it uh yeah I understood I understood uh basically our average uh average deposit 40:43 40 minutes, 43 seconds per customer has to go up uh going forward. Uh that's that's the main take. 40:48 40 minutes, 48 seconds Yeah. If you look at the buildup also in the slide number 15 correct first 63 7300 crores comes from the 40:56 40 minutes, 56 seconds payments bank current ecosystem or around that the balance comes at 6.6%. 41:02 41 minutes, 2 seconds So the 6.6% 6% is a mix of deposits of more than one lakh of rupees fds some wholesale deposits all of that put 41:11 41 minutes, 11 seconds together and uh rishi on the lending front you mentioned that 90% you want to grow 41:19 41 minutes, 19 seconds secured but [clears throat] uh uh uh we have done some pilots but what's the feedback on those pilots and can you 41:26 41 minutes, 26 seconds just elaborate by fi 28 the first year how do you want to ramp ramp it up to 10,000 by fih 230 30 41:36 41 minutes, 36 seconds see we have done pilot so two three things which we are working on one is our gold gold loan uh numbers so total 41:45 41 minutes, 45 seconds numbers is roughly about 350 300 no 350 cr 350 350 crores uh so we we did about 350 41:54 41 minutes, 54 seconds crores of uh dispersements in quarter 3 which is our highest dispersement on referral product till date of which uh I 42:02 42 minutes, 2 seconds would say 95% or so would be gold loan around 5 to 7% which we have built up a 42:10 42 minutes, 10 seconds team of about 30 people working in some some states in the country where they are building up a affordable housing lab 42:19 42 minutes, 19 seconds kind of a product. So they could reach a dispersement from 0 to 8 crores in three 3 to four months. I think we did about 8 42:28 42 minutes, 28 seconds crores or so of dispersements in quart in December of of uh of quarter three. 42:34 42 minutes, 34 seconds So both the pilots I would say both on the gold loan which has been there uh where we total we have reached 350 42:42 42 minutes, 42 seconds crores I think it's going very well. So on an average you can say affordable housing lab uh employee is able to 42:50 42 minutes, 50 seconds generate 30 lakh of rupees of uh new leads which is converted into dispersements per per month which to my 42:59 42 minutes, 59 seconds understanding is a healthy growth uh as such. Fair enough. Fair enough. Great. Great. 43:06 43 minutes, 6 seconds Thank you so much and all the best. Thank you. 43:10 43 minutes, 10 seconds [clears throat] 43:12 43 minutes, 12 seconds Thank you. We have the next question from the line of Franklin Morris from Reliance General Insurance. Please go ahead. 43:21 43 minutes, 21 seconds Uh yeah, thanks for taking my question. 43:23 43 minutes, 23 seconds So currently we have a subscription based uh Kasa model. Uh so will we continue to uh have that model uh post the SFD as well? 43:34 43 minutes, 34 seconds Yeah. Yeah. Absolutely. That thing changes. 43:39 43 minutes, 39 seconds Okay. Okay. And in terms of uh in terms of the LCR estimate so basically uh you know uh uh there is a higher stand uh 43:48 43 minutes, 48 seconds runoff rate for CASA account visa via term deposit and also the fact that if 43:55 43 minutes, 55 seconds it is digitally acquired uh there is a higher runoff. So LCR to that extent uh you know tends to come lower. So 44:03 44 minutes, 3 seconds considering the fact that we will have a high proportion of uh both these in our overall uh you know liability make what 44:11 44 minutes, 11 seconds is the kind of NCR that we have ped in our estimate. 44:17 44 minutes, 17 seconds So thanks uh uh this is a fair question what we need to be cognizant and comes back to the slide number 15. We are 44:26 44 minutes, 26 seconds running a current model where our whilst we only have kasa and our core book of 44:33 44 minutes, 33 seconds kasa which is a nonvolatile kasa is to the extent of around 90% plus. So what 44:40 44 minutes, 40 seconds you essentially said the the the the the volatility which can impact CR is is more attributable to a different segment 44:49 44 minutes, 49 seconds for us and as Rishi said earlier to Droo's question we are continuing our current model of acquisition of the 44:58 44 minutes, 58 seconds subscription base etc. So we do not expect that kind of volatility coming across. This will be relatively higher core percentage of kasa is what we are 45:06 45 minutes, 6 seconds looking at and that is not out of the blue. That is the demographics of our current customer which we will continue doing 45:15 45 minutes, 15 seconds but any LCR number that we would no we've not projected that currently the way way it is there but but I just explained you the logic of how it will be core. 45:24 45 minutes, 24 seconds Okay. Okay. And finally uh just to understand like in the interim our cost to income uh ratio uh would uh tend to 45:34 45 minutes, 34 seconds increase before it starts moderating uh as we go forward right so uh right now like our cost income ratio is about 94%. 45:46 45 minutes, 46 seconds Uh so I just wanted to understand what's the trajectory of uh this cost to income ratio maybe in the next uh you know 3 to four years. 45:55 45 minutes, 55 seconds So again this comes back someone perhaps Majid also had a similar point earlier as well maybe that was pertaining to how 46:01 46 minutes, 1 second it the cost is going for next year I had explained that off if you if you if you see our and Rishi mentioned in his uh uh 46:11 46 minutes, 11 seconds commentary as well that if our cost of funds is around 3.9% and our margin is around 10% we are not going to go via a 46:21 46 minutes, 21 seconds branch model or we will have limited and selective branches. is coming across. So we do not h expect an abnormally high uh 46:29 46 minutes, 29 seconds opex coming on account of SFB. Uh how do we draw out a model in terms of profitability for 3 to four years? 46:37 46 minutes, 37 seconds Currently as I said we put margins, we've put assets, we put liabilities, we've also corroborated the incremental 46:46 46 minutes, 46 seconds uh incremental capex which is essentially coming across. So that's where it will come through. 46:54 46 minutes, 54 seconds Yeah, fair enough. Fair enough. Thanks a lot and all the best. Thank you. 47:01 47 minutes, 1 second A reminder to all the participants, kindly restrict your questions to two poor participant. If you have a follow-up question, please rejoin the 47:08 47 minutes, 8 seconds queue. Again, we have the next question from the line of Manish Shivastava from Infinity Alternative. Please go ahead. 47:22 47 minutes, 22 seconds Hello. Hi, Manish. Hello. 47:26 47 minutes, 26 seconds Hi. Can I Yeah. Yeah. Loud and clear. Yeah. Sorry, I didn't want to be that loud. 47:35 47 minutes, 35 seconds Thank Thanks a lot for the call. I just want to understand like uh it seems to be a [clears throat] very tight market 47:42 47 minutes, 42 seconds for people and uh so how are we shaping up in terms of hiring plan for uh the 47:50 47 minutes, 50 seconds small small bank how is the market 47:59 47 minutes, 59 seconds Manish earlier you were extra loud and clear and now you are I understood your question you're basically asking in terms How how is the 48:08 48 minutes, 8 seconds hiring going on and look see fortunately for us that we are sitting in Mumbai 48:15 48 minutes, 15 seconds which is a financial hub of the country where most of the banks NBFC's fintex are there and so there is enough and 48:23 48 minutes, 23 seconds more people who are in the same city so we don't have challenge of getting people from a different city secondly 48:30 48 minutes, 30 seconds because we are building up this business from ground zero on the asset side there are lot of interest which we are getting 48:37 48 minutes, 37 seconds from relatively experienced people who want to be part of this journey of building up a bank uh where they see 48:45 48 minutes, 45 seconds this overall contribution to or overall contribution from their side will be enormously much bigger and uh very 48:53 48 minutes, 53 seconds different to look at it. So right now the key roles which we are looking at most of them we have already done 49:01 49 minutes, 1 second multiple interviews. There is already a short list of uh employees which is there. So over the next one to two 49:10 49 minutes, 10 seconds months we plan to close the top level of hiring and then the hiring will actually go down as as they keep on joining. So 49:19 49 minutes, 19 seconds the challenge on hiring I don't see there is much on that side. Obviously we 49:26 49 minutes, 26 seconds have to build up a cohesive team where uh the culture of the DNA of the company is maintained and grow with the new 49:34 49 minutes, 34 seconds people. So that part we are also working parallelly. So from a project implementation point of view I think lot 49:41 49 minutes, 41 seconds of work has has started to happen and we see that momentum getting built over the next 60 days as we go into the journey. 49:52 49 minutes, 52 seconds Fantastic. Thank thanks a lot and best wishes for every Thank you. 50:03 50 minutes, 3 seconds A reminder to all the participants due to time constraint we will restrict to one question per participant. 50:10 50 minutes, 10 seconds We have the next question from the line of hush and individual investor. Please go ahead. 50:18 50 minutes, 18 seconds Oh hello. Am I audible? Yes please. 50:22 50 minutes, 22 seconds Yeah. So I just wanted to understand so you mentioned uh majority of our lending will also happen through our merchants 50:29 50 minutes, 29 seconds right I just wanted to understand how that model shapes up like how do you plan to implement checks and balances 50:38 50 minutes, 38 seconds when you're lending through merchants uh great question it will require a lot of time for me to explain but I will 50:47 50 minutes, 47 seconds just give you a high level thing probably we can meet and then we can discuss this in detail So largely what will happen is that we have a large merchant ecosystem across the country. 50:57 50 minutes, 57 seconds These are merchants who are sitting in those local uh local shopping areas and local plazas which are there in any 51:04 51 minutes, 4 seconds semi-urban, rural or metros or around the towns which are there. These are people who are well connected in the 51:11 51 minutes, 11 seconds ecosystem and these are people who who are aware of what is the chronomic activity happening around them in that 51:18 51 minutes, 18 seconds geography. So they will be able to generate leads for us. Once the lead will come, the lead will go through and 51:26 51 minutes, 26 seconds we are also as I mentioned in my last call, we are also using lot of AI and fortunately for us as we move into more 51:34 51 minutes, 34 seconds much much deeper uh technology. The AI will definitely benefit us. We have in fact shortlisted about 8 to nine partners already on the AI integrations 51:42 51 minutes, 42 seconds which we have to do starting from getting the basic information the photograph the personal discussion and 51:50 51 minutes, 50 seconds lot of other activities uh from from that. So a lot of that P part we expect the merchant will be able 51:58 51 minutes, 58 seconds to do where there is a it's like a idiot proof kind of a ecosystem. Once that is done, it will go to our asset centers 52:06 52 minutes, 6 seconds which will be positioned in a kind of a hub model and from there whatever physical verification or anything will 52:13 52 minutes, 13 seconds will be required to be done will be done by our own staff and obviously there will be lawyers and legal councils who 52:20 52 minutes, 20 seconds will help on the validation verification specifically on the housing kind of loan structure. So lead generation, 52:29 52 minutes, 29 seconds collection of the basic information, decisioning and everything will be at the hub level and the central office level. Obviously we'll have to make some 52:38 52 minutes, 38 seconds rules engines on which the entire ecosystem will work. But the large part of the leads we expect to get generated 52:45 52 minutes, 45 seconds through our merchant ecosystem and fulfillment through our assent centers and uh through that ecosystem. I hope it 52:52 52 minutes, 52 seconds clarifies uh at a high level. Obviously this is a much deeper uh process flow and everything which will require a lot of time. 53:01 53 minutes, 1 second Yeah. Yeah. Understood. Thank you for that. And uh just a small clarification. 53:05 53 minutes, 5 seconds So in terms of our referral loans, right? Uh there is no we are not taking any 53:12 53 minutes, 12 seconds no if I get your question no we are not taking any credit risk as a payments bank. We can't take any credit risk. We refer it to the relevant partners and 53:21 53 minutes, 21 seconds then they take the risk. Gold is a very operational kind of a model. I think affordable loans and lab are more where 53:29 53 minutes, 29 seconds they have to take a take a much much more informed decision and and will this referral business 53:37 53 minutes, 37 seconds continue as we discuss apologet I would request you to rejoin the queue again as there are participants in the queue. 53:45 53 minutes, 45 seconds Sure. Thank you Ash. 53:50 53 minutes, 50 seconds Thank you. We have the next question from the line of Rupesh Utwani from Naan Mala Securities Private Limited. Please go ahead. 53:59 53 minutes, 59 seconds Uh hi sir, am I audible? Yes. 54:03 54 minutes, 3 seconds Uh hi sir, congratulations on the uh SFB bank license. I just had uh one small question on the kasa related renewal 54:11 54 minutes, 11 seconds income. Now you had said that uh you have there's a uh there's an increase in the uh renewal income on a year-on-year basis. But if I look at it on a 54:20 54 minutes, 20 seconds quarteronquarter basis, it has come down by uh somewhere around 8%. So uh is there a specific reason behind that or something? Uh if you could explain. 54:32 54 minutes, 32 seconds Yeah. Uh hi. Uh yes, your observation is right. Typically renewal income is like an annuality 54:39 54 minutes, 39 seconds income which is you know building and helping us and we've quoted a Y percentage for 3 month for the quarter 54:46 54 minutes, 46 seconds as well as 9 month to address your point I think our Q2 revenue was 62 crores which has come down to 57 crores that is 54:54 54 minutes, 54 seconds largely attributable to the DBT related uh aspects direct benefit transfer so when the direct benefit transfer which 55:02 55 minutes, 2 seconds came essentially from the government uh uh had reduced significantly from quarter 2 to quarter 3 and that's the trend which is showing across as well. 55:14 55 minutes, 14 seconds Uh okay sir great and just uh one last question if I may squeeze in uh will we be focusing on any particular demographic for the loan book or uh is 55:23 55 minutes, 23 seconds it something that you haven't yet decided for the SFP? Yeah. 55:28 55 minutes, 28 seconds Yeah. Largely we have looked at north to west and one or two states in south to start with. 55:34 55 minutes, 34 seconds Uh okay. Okay. So uh that's all from my side. Thank you and all the best. Thank you N. Thank you. 55:43 55 minutes, 43 seconds Thank you ladies and gentlemen due to time constraint that will be the last question for today. I now hand the conference over to the management for the closing comments. 55:54 55 minutes, 54 seconds Uh thank you uh thank you Rashi for the conference. Uh so this quarter has been a remarkable quarter I would say from a 56:02 56 minutes, 2 seconds long-term transition point of view of of the bank. Uh we we achieved two significant milestones. One on the SFB 56:10 56 minutes, 10 seconds second on the technology which sets us apart compared to any other payments bank and other SFB in this in the same 56:17 56 minutes, 17 seconds uh domain. our our SMB as we explained and lot of it is there in the in the presentation we would encourage if there 56:25 56 minutes, 25 seconds are more questions please uh uh we'll be more than happy to answer that uh on onetoone basis to explain the entire 56:33 56 minutes, 33 seconds thinking of our business model on the SFB side on technology we have migrated to the new platform uh hope hope and we 56:42 56 minutes, 42 seconds are expecting that the benefits of migration to a new gen next generation platform form will start coming in from 56:49 56 minutes, 49 seconds the next quarter onwards as as we move into uh this uh in a more stable and uh complete our other pending jobs on the 56:58 56 minutes, 58 seconds on the entire platform as such. So lot of lot of activities have happened. Uh 57:04 57 minutes, 4 seconds there has been a slight drop as we saw in our business uh and the profitability. uh there's a one-off item 57:12 57 minutes, 12 seconds on the labor cost also uh which uh which which also affected our bottom line but in the long-term point of view we expect 57:20 57 minutes, 20 seconds that with this big achieve big two transitions which we are now done with this will take us to a different level 57:27 57 minutes, 27 seconds in the next one or two years and we continue to uh uh remain focused on what we want to build over the next 12 to 18 57:36 57 minutes, 36 seconds months and uh hopefully we'll build up a very differentiated State Bank uh according to the things which we are 57:44 57 minutes, 44 seconds contemp which we have contemplated and we are building on it and we continue to look forward to your continued support. 57:50 57 minutes, 50 seconds Uh thank you very much and uh have a nice day. Thank you. 57:57 57 minutes, 57 seconds Thank you very much on behalf of Feno Payments Bank and Go India Advis that concludes this conference. Thank you for joining with us today.