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HDFC Bank Limited (NYSE:HDB)
Q4 2021 Earnings Call
Apr 17, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, good evening, and welcome to HDFC Bank Limited Q4 FY '21 Earnings Conference Call on the financial results presented by the Management of HDFC Bank. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after a brief commentary by the management. [Operator Instructions]

I now hand the conference over to Mr. Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank. Thank you, and over to you, sir.

Srinivasan Vaidyanathan -- Chief Financial Officer

Okay. Thank you, Stephen. Appreciate all of you calling in today. Apologize there is five minutes delay, people are still getting in. But we will get going. I do want to start -- use this time to start with some environmental context of how we operated in the recent quarter, that gives you a good backdrop of what some of those results are.

You know that the in 4Q, the high frequency data remained robust. It's almost -- certainly for the early part, it was quite robust, as we saw, particularly the consumer durables, production, good growth 12% [Phonetic], which was reflecting that the consumption demand was holding up. The PMI 57.5 in February. rate 57.7 in January, more or less similar kind of levels, right. While the tractor sales was slower in February, the overall auto sales recorded quite a good growth at 6.5% year-on-year. Both the two wheeler and passenger vehicles contributed to that. Double digit exports and power generation, augurs well. Record GST collection, INR1.2 trillion, that's also great. Those were all case for building a positive growth rate. So that's why our house view has been and is that the GDP growth in the quarter that ended, is perhaps at 1.5% year-on-year growth, which will make the full year at about contract by [Indecipherable]. Right.

Then getting to the RBI policy, the [Indecipherable] was more dovish than expected, recognizing the risk associated with the rising infection cases in the country, and continuing to support the growth, several measures to keep the liquidity in surplus, extension measures like, on tax TLTRO etc. Those were supportive measures that are helping. While the pandemic situation and vaccination drive are expected to be critical factors for economic recovery, we do expect our house view that India will be one of the fastest growing economies in the world in FY '22 and reach the pre-pandemic level, which is 2019 levels by end of the current calendar year. Of course, we need to watch out for anything to do with the pandemic and the vaccination, how it progresses, but assuming they're all progressing, that's where the growth is coming from. The resurgence of COVID cases across the country presents some uncertainty, but we'll talk more as we go along in selective micro segments, more than broad based.

Coming to the Q4, equity capital markets,, we saw trends driven by -- positive trends driven by global liquidity. Compared to the prior quarter, private issuers raised approximately INR25,900 crores, mix of IPOs, rights and QIPs. And approximately INR44,000 crores via blocked deals. Retail participation and IPOs have been strong during this quarter. The equity fund-raising pipeline, both in public and private market continues to be robust.

During the quarter, we mandated four IPOs, including two IPOs where we were appointed as lead merchant banker. On the debt capital market, Indian debt capital markets had a slow start in Q4, as the market took a breather after heavy issuances in the year till date. Market deals showed some sign of hardening. Q4 saw a fund raise of about 2INR2.24 lakh crores, which is marginally lower than prior year and prior quarter, right. About 1% -- 3.1% and 3% was lower. Our bank improved its ranking in second place among the ranges for INR bonds in FY 2021 from third place in in FY 2020. Our market share during Q4 was about 15.5% or so.

Now talking about our partnership in the PSC, in the semi-urban and rural strategy. As of March 31st, we signed up approximately 1.67 lacks village level entrepreneurs, of which 1.12 lakhs are onboarded as business facilitators, and about 15,565 as business correspondents, as well as expanding our distribution in some form, right, non-branch form, as business correspondents. The BCs are not only executing financial transactions through the use of AADHAR enabled payment systems, which works on biometric authentication, but are also enabled to sell multiple products, including CASA fixed deposit, different type of loans. We have recently enabled our VCs with the EMI collection facility in selected cases.

On the healthcare initiative, which we have talked over the last quarter and a half or so, we started reaching out to 500 large hospitals in the country to provide patient finance from their counters, including providing EMI facility on credit card and debit card. We have activated 37 hospitals and customers are appreciating access to funding at hospitals.

On the retail branch front, during the quarter, we have opened about 2 million new liability relationship, and about 7 million liability relationships during the year, FY '21. The bank has successfully acquired through a little more than 2.5 million corporate salary customers during this year. Personalized link for account opening has been started for each corporate, which is yielding good results. Also a unique bulk account opening process has been launched for large corporates, which make it very easy to open a large number of accounts, thereby reducing manual intervention. A new approach toward customer engagement was put in place in Q4. The concept was that before every customer engagement, the RM is checking about service led next best action for a meaningful engagement and furtherance of business.

On the digital, to ensure seamless KYC process complementing the digital CASA acquisition, the video KYC delivered good results. The highlight of this process, is the seamless, less than five minute journey for the customer to fulfill the entire KYC. The video KYC will serve both the liability and asset acquisition of the Bank.

On the payment side, issuance spend continued to show progress that we made in the previous quarter. Previous quarter, as you remember is a big fiscal quarter. Now coming to January-March -- January to March, it continued to progress. There was some revival in the previously dormant merchant category costs like the air travel, etc, that was coming back, but that pushed some spends up. We are also seeing good spend growth in categories like business cards for SME, where digitization has helped in awareness building and more spends on cards.

We are working on Summer Treats, which is currently the program is on, which is our platform to bring consumers and merchants together to motivate spends on key customer segments. Spend such as electronics, daily grocery needs, online spends will be the key focus in the summer treat program. We are showing the trends in the acquiring business with increased digitalization, prompting merchants to accept more spends across cards, UPI and wallets. Bank strategy of offering one box acquiring solution, coupled with business value add, such as customer marketing tools for merchants. The CASA facility, merchant loyalty digitization for home delivery, etc, have helped to target the entire business. 1

Operator

2 the entire business merchant coupled with current account balances.

On the retail asset front, the momentum picked up during -- picked up what we observed in Q3, continued its stride in Q4 as well, with disbursals registering a 21% year-on-year growth and the 6% growth sequentially. As we go along, Arvind will give more color on what's happening on the ground, on the retail assets front.

Wholesale business across large mid and SME performed at pre COVID level. Growth in mid-sized corporates and SME was particularly robust, aided by new to bank customer acquisition, deeper geographical penetration, and higher utilization. Corporate Banking saw lower year-on-year on growth due to higher base effect, large prepayments as a result of surplus corporate cash flows. General deleveraging sentiments, reduction in corporate liquidity buffers, that was built up in the first half. The bank continued its progress in gaining market share, due to diligent adherence of sales process and we'll have Rahul give more color exactly a little more detail on what's going on, on those fronts right.

Collection at The Bank continued to remain sensitive to customers' needs, providing customers clarity on their options under the lease packages announced by RBI, and supporting them through the processes to avail the same. The Bank resolution rates, both in the front-end and mid-buckets will be discussed in detail by Jimmy in a short while.

On the society and community, The Bank spent 2% of the average profit after tax for the past three years toward the various projects undertaken as part of our community initiatives under CSR. While we continue to support areas of financial literacy and inclusion, health and sanitation, education and rural development, we plan to substantially increase our focus on livelihood and skills. We have initiated a multi-year project impacting the livelihoods of close to 3 lakh farmers. Additionally, we'll be creating over 42,000 skilled entrepreneurs, promoting education, our intervention expansion is to include additional 25 lakh children, in an endeavor to improve learning level outcomes, reduce dropout rates, enhance retention, and enrollment rates in formal education.

Now let's talk about certain balance sheet strength, before we dive into the P&L. Branches building continue, as I mentioned in terms of bringing the customers in, persistent focus on deposits, bringing new customer relationships, gaining market share across the board. Liquidity is consistently strong reflected in our average LCR ratio for the quarter at approximately 138%, little more than 80,000 crores of surplus, approximately $11 billion considering 110% LCR as a floor.

Capital adequacy at 18.8%. We have 7.7 percentage points more capital than regulatory minimum of 11.075. Our CET1 at 16.9 is 9.3 percentage points more than the regulatory minimum of 7.57. The balance sheet remains resilient. The floating and contingent provisions totaling to INR7,300 crores built over a period of time, helps in derisking the balance sheet. We continue to originate loans in conformity with proven credit models. As I said, we will cover more on credit as we go. So I wouldn't cover here now.

Now getting on to net revenues, which grew by 16.4% to INR24,714 crores, driven by advances growth of 14% and deposit growth of 16%. Net interest income for the quarter was at INR17,120 crores, up 12.6% over previous year and grew by 4.9% over previous quarter. For the quarter, the core net interest margin was at 4.2%, prior year was a 4.3%, and prior quarter was also at 4.2%. As mentioned earlier, the Bank's average liquidity coverage ratio was 138%. The excess liquidity position of the bank impacts current NIM, call it 10 to 15 basis points or so. This drag was offset by monetizing some of the investments in the form of trading gains, which we have described in the past quarters too, that's always part of the ALCO strategy we have managed that.

Moving on to other income; total other income at INR7,594 crore, was up 25.9% versus prior year, and 2% versus prior quarter. Fees and commission income constituting about two-thirds of other income, was at INR5,023 crore, grew by 19.6% compared to prior year and 1% compared to prior quarter. Retail constitutes approximately 94% and wholesale constitutes 6% of the fees and commission income. FX and derivatives income at INR879 crore was higher than prior year and prior quarter of INR501 crores and INR562 crores respectively, reflecting pickup in activities both sequentially and year-on-year. Trading income was at INR655 crores for the quarter, some of the gains from excess security investments were monetized, in line with our ICO strategy. Other miscellaneous income, INR1,036 crores includes recoveries and dividends from subsidiaries.

On the operating expenses for the quarter, which is at INR9,181 crores, an increase of 11% or so versus prior year. During the year, we added 354 branches, which is approximately one branch per day, and added 123 branches during the quarter. Since last year, we have added 1,100 new ATMs, cash deposit and withdrawal machines, and 546 during the quarter. We have 15,556 business correspondents managed by common service centers, including 2,054 open during the quarter. During the financial year 2021, we added 10,177 business correspondents.

The staff count increased by 3,100 during the last 12 months and is at 1,20,093. Our cost to income ratio for the quarter was a 37%. We anticipate the spend levels to increase, driven by sales, promotional activities, discretionary spends and investments. As we have said in the past, the cost income ratio will be reverting to a recent trend of 38%, 39%, in the short run as the activity -- as the volume picks up and we make some investments. While our goal remains to bring it down in the medium term to longer-term.

Moving on to PPOP, the pre-pre-provision operating profit at INR15,533 crores grew by 19.9% over prior year. Coming to asset quality, last quarter we mentioned about the Supreme Court passing an interim order, stating that those accounts that have not been declared NPA till August 31, should not be declared as an NPA until further orders. The interim order granted not to declare, was vacated on March 23. Further to that, RBI on April 7 issued a circular in this connection, thereby directing the banks to continue with asset classification of borrower accounts, as per extant RBI instructions and IRAC norms. The bank has completed this directive of asset classification. The Bank had estimated potential NPAs, which were identified and reported during the previous two quarters on a pro forma basis. These pro forma basis NPAs have now being reported as NPAs, as we have mentioned the created contingent provisions of approximately INR3,600 crores toward those pro forma NPAs, that is now being utilized and specific -- against the specific provisions for these NPAs. The bank holds provisions as of 31st March, '21, against the potential impact of COVID-19, based on the information available at this point in time.

The core annualized slippage ratio for the current quarter is at 1.66 as against 1.86 on a pro forma basis in the prior quarter, and 1.2 in the prior year. GNPA ratio was at 1.32 of gross advances compared to 1.38 in the prior quarter and 1.26 in the prior year. GNP ratio, excluding NPAs in the agricultural segment was at 1.2. Prior quarter was also at 1.2 on a pro forma basis, and prior year was at 1.1. Net NPA ratio at 0.4% of net advances, preceding quarter was also at 0.4 on a pro forma basis, and prior year was at 0.36. Restructuring under the RBI resolution framework for COVID-19 was approximately 60 basis points.

Provision; the core specific loan loss provisions for the quarter were INR3,153 crore, as against INR3,170 crores on a pro forma basis during the prior quarter and INR1,918 crore for prior year. The specific loan loss provisions reported were INR6,762 crore for the quarter. As mentioned earlier, this includes approximately INR3,600 crores of pro forma specific provisions of prior quarters, which has no effect on P&L, as the contingent provisions that were created against this pro forma, was just adjusted to that. Total provisions reported were INR4,694 crores against INR3,414 crores during the prior quarter, and INR3,784 crores for the prior year. Total provisions in the current quarter included, additional contingent provisions of approximately INR1,300 crores. Included here is approximately INR500 crores for interest on interest provisions, which is being worked with IBA to standardize the computation across the system. Before this, specific provision coverage ratio was 70% as against 71% pro forma in the prior quarter, and 72% in prior year. There are no technical write offs. Head office branch books are integrated. At the end of current quarter, contingent provision toward loans were approximately INR5,900 crores. The bank's floating provisions remained at INR1,450 crores. As of March end 2 3 As of March quarter end general provisions were INR5,300 crores. As on March quarter end, the total provisions comprising specific floating contingent and general, were 153% of gross, non-performing loans. This is an addition to the security held as collateral in several of the cases. Coming to the credit cost ratios, core credit cost ratios, that is the specific loss ratio, is at 1.10 for the quarter, as against 1.16 on a pro forma basis for prior quarter, and 0.77 for the prior year. As you are aware, recoveries are in miscellaneous income. The recoveries amounted to 25 basis points of growth of the advances for the quarter, against 24 basis points that we recovered prior quarter, and 21 basis points in the prior year. The total credit cost ratio for the quarter annualized, including contingent provision created was at 1.64 as against 1.51 in prior year and 1.25 in prior quarter. The reported profit before tax at INR10,839 crores, growth grew by 18.1% over prior year. Net profit for the quarter at INR8,187 crore grew by 18.2% over prior year. Net profit for the year ended March 31, the full year, was INR31,117 crores, up 18.5% over prior year. Some balance sheet items, total deposits amounted to INR13,35,060 crores, an increase of 16.3% over prior year, and up 5% over prior quarter, which is an addition of approximately INR64,000 crores in the quarter and approximately INR1,88,000 crores since prior year. Retail constituted about 80% of total deposits. CASA deposits grew by 27%, ending the quarter at INR6,15,682 crores with savings account deposits at INR4,03,500 crore and current account deposits at INR2,12,182 crores, growth stemming from our enduring focus on granular deposits. CASA deposits also registered a robust sequential growth at about 12%, 12.6%. Time deposits at INR7,19,378 crore grew by 8.5% over previous year and marginally declined minus 0.7% rate over prior quarters. CASA deposits comprised 46% of total deposits. Credit deposit ratio was at 85% for the current quarter against 87% in the prior year. Now advances, INR11,32,837 crores, an increase of 14% over prior year and a sequential growth of 4.7%. This is an addition of approximately INR51,000 crore in the quarter and about INR1,39,000 crores since prior year. Retail advances on a Basel basis grew by 6.8% year-on-year and sequentially grew by 4.5%, and wholesale advances, again on a Basel basis, grew by 21% year-on-year and 5.2% sequentially. Getting on to capital ratios, capital adequacy, the total capital adequacy ratio as per Basel III guidelines stood at 18.8%, as against regulatory requirement of 11.075. Prior year was at 18.5%. Tier 1 capital adequacy was 17.6%, as compared to 17.2% in prior year. CET1 capital stood at 16.9% compared to 16.4% in prior year. So now let's get on some highlights on HDB Financial Services and I guess which I made for consolidation in the bank. The supply side shocks have impacted the livelihood of self-employed segment that HDB assets caters to. Throughout the past year, HDB Financial Services has made provisions and taken elevated credit costs, while ensuring the new business written was through tighter credit filters. The company has seen its business in collection reach pre-COVID level in Q4. Disbursements for Q4 were up 15% over Q3, and 32% over Q4 of last year, which had an impact of -- first impact of the lockdown. All business lines continued their growth momentum with secured business of LAP and vehicle segment, providing the largest contribution to sequential growth. HDB Financial Services will manage growth, depending upon how environment plays going forward and they have large distribution footprint 1,319 branches, will allow to pick and accelerate growth according to opportunities. The AUM reached INR61,358 crores. Net interest income for the quarter at INR1,252 crores, a growth of 15.4% over Q4 last year, while sequential growth was at 23.9%, driven by favorable product mix, lower cost of funds. PPOP for Q4 was at INR989 crores, growing 20% over previous year and 32% sequentially. Provisions for the current quarter were INR613 crores. Core credit costs in Q4 has reached pre-COVID levels and the credit reserves going forward, were warrantied -- is a good opportunity to build, were warrantied, particularly if the outlook remains uncertain then. For the quarter HDFS had profit of INR284 crore and for the full-year profit was INR502 crores. As of March end, the gross NPA as per the NBFC recognition methodology was a 3.9% as against 3.5% as of last year March, and 5.9% on a pro forma basis prior quarter. HDFS has adequate liquidity. LCR is at 265% and is able to borrow at attractive rates, coupled with strong capital position of 19%, and are well positioned for market opportunity. Now coming back to the bank; at the outset, let me talk about the outage. You have some details about the November 18, December 19, November 20 outage incidents. I will not go into detail again. However, a couple of minutes on a recent incident of March 30. It was an intermittent issue on net and mobile banking that occurred due to a server hardware component failure, and has no correlation with any capacity issues. On net banking, mobile banking, quite a few users closed their browsers or quit their app without logging out. The back-end system monitors this and clears the inactive sessions periodically. The hardware failure impacted the session clearance. However, the minute inactive sessions were cleared. First set of users were able to login. Substantial number of customers were able to carry out the transactions, despite impairment on that particular day. While we continue to make good progress on our plans short, medium, long-term, addressing various matters, like many other things we set higher standards. It broadly covers areas of security enhancements, disaster recovery, resiliency, optimizing both recovery time and the recovery point, automation of orchestration, obsolescence management including consolidation of data centers, infrastructure scalability like the cloud strategy, application network monitoring tools, right. These are some of the focus areas that we are working on. The audit by independent third party is in the final stages, and we'll update further as we get to know more from the regulators. In the meantime, we continue to focus on the design and development. It's an ongoing process, as you know, working with various partners. We continue to build capabilities in the area of core systems, to keep it stable always on and scalable, by partnering with OEMs like Oracle as an example, and draw their expertise, given our landscape of applications. We are also working on migration to cloud for resiliency. Exports of functions and data services from core through APIs, micro-services, and Data exchanges, by partnering with major tech companies. Building customer friendly experience on cloud-native engagement platforms, leveraging data and AML for personalization underwriting risk and fraud control and analytics. We are also building new muscle and infusing new talent, to execute these strategies to establishing a digital factory. Now on another front, which is the cost front, right. All of you know that the cost lifecycle management to mature takes a couple of years. The stages on cost management sourcing, on-boarding, activation, engagement, deepening etc. Investments are continuously made in increasing spend depth and width that, evolve behaviors, product updates, line enhancements, loan on cards, etc. The impact of the non-issuance of cards is on new employees in corporates, new corporates on-boarding etc. This loss of new customers can normally be made up within a few quarters of stoppage being lifted, since the bank continues to source liability customers, who will be pre-approved. About three-fourths of our sourcing comes from existing customers of the bank. In the meantime, the focus of all the channels and feet on street is on engaging with the existing card customers, which is government or inactive to resuscitate them. This way portfolio activations and card dynamics are up, improving portfolio quality and increasing downstream activity. In summary, we are proud of our staff, who have intensely managed customer relationship in executing our strategy, by delivering products and services, despite the complex environment, pandemic situation throughout the year. Our results reflect robustness across various parameters, deposit growth of 16%, advances growth 14%, operating profit growth 20% profit after tax, increased by 18%, delivering the return on asset of about 2%. With that, Jimmy, you want to give some color on some of those credit and market dynamics? 3 Those credit and market dynamics?

Jimmy Tata -- Chief Risk Officer

Sure. Hi everyone Good evening. I'll first just take up the wholesale and SME for four years from the risk perspective. Then I'll just hand over to Rahul, who will take you through the forward looking business vision on that front. And I'll come back a little later to talk on the retail, before handing it over to Arvind for his [Technical Issues].

So on the wholesale businesses, frankly rather boring report from my side. It's all pretty much the same and no changes in any way. So we once again -- I think I have mentioned enough about our HDB rating scale which we trust in and has served us very well. It's a 1 to 10 scale, one is best 10 is worst 7 is the threshold for investment grade.

So I'm just looking at the incremental portfolio initially, and the average rating of the incremental portfolio is 4.24, and we have -- I must say when I put all these in, that there is -- none of it sounds right, this was a very considerable scope for deterioration in this score, before we even get below a AA kind of average portfolio rating. So just to put that in perspective. The externally rated portfolio, and this will probably give all of you all, a better idea. So from the incremental portfolio, the externally rated portion of it, 62% of that is rated AA and above and that is weighted much more in favor of AAA than AA.

And if I move now into the static portfolio; the static portfolio has an average rating of 4.33. If you look at the outstanding advances and a 4.22. If you look at the actual exposure sanctioned, but it's better to look at the outstanding advances, because that's the real gist [Phonetic] on the book at that point of time. So I take the conservative number. The weighted average rating of the top 20 borrowers of the Bank is 2.92. So the large exposures are definitely better rated than the average portfolio. The unsecured exposure, because this is often a question that you ask has an average rating of 3.36, if you compare that to the secured book, which has an average rating of 4.57. This just reflects the extreme caution that we exercise, before we take any unsecured exposure, because we do understand and recognize the incipient risk in such an exposure.

So that's pretty much where we stand. We had a pretty good quarter, when it comes to the wholesale bank. NPAs were really small, and good chunk of the NPAs actually booked right now, because they are part of the COVID resolution, which as soon as the resolution is put into effect, will be upgraded [Technical Issues].

If I move on to -- is there anything more for me to tell you here? No except that the higher grades the HDB wants to force, has been better growth, but I think that is kind of obvious, if you looked at the incremental lenders, stock portfolios.

So I'll just move into the SME book right now, which is of interest to many more. In the December to March period, and let me add December into this, because it has been a four months of the return of cash flows into our accounts. As you know, we run the book on a very holistic basis. We don't just give loans, we look at holistic banking. We rely a lot on the cash flows of the companies, and those cash flows are coming back in a reasonably good and healthy way. So that's something that we have seen across the account. The resumption in these cash flows has also been beneficiary to the 30 plus book of the bank, which has come down. The bulk of the 30 plus reduction has been through repayments. A very small part has been through the COVID restructuring.

On the restructured accounts, the COVID restructured accounts, not very large. There was around INR550 crores odd. But I must mention that of this INR550 crores odd, a little over INR200 crores -- somewhere between INR200 crores and INR250 crores, were actually in some form of delinquency at the time of restructuring. So a lot of it was precautionary. The approach we had to the restructuring was given the circumstances in which we find ourselves in all of -- in these circumstances. So then there was a requirement earlier on, that someone had to demonstrate that he needed it, and he was in distress, etc. We were obviously following that. But as soon as it got opened up and it was allowed on request, we were much more forthcoming in permitting the restructuring, and that's pretty much reflected in the fact, that very large chunk of it is not delinquent at this point in time.

I must also mention, to the credit of a lot of our clients, that several of them who did optimize [Technical Issues] actually refused and assured us that they will be paying us back, because they did not want the bag of being restructured. So rather heartening in a way.

Moving on to industry granularity. Again, nothing to report, pretty mundane. It's pretty much where we've always been. Apart from agriculture, which is directed lending, everyone is below 5%. By the time you hit the 10th odd industry, you are at around 3.5% or so. So the portfolio is genuinely very-very granular and it has always been that way. It remains that way.

If I look on the delinquency trend, we are now -- either if you look at very early, which is a 7 plus premeasure [Phonetic] or a 15, 30 or 60, all these levels are virtually back to where they were, pre-COVID. So the 7 plus is maybe around 10 to 15 basis points away from that level, and the 60 plus is barely 5, it's less than 5 basis points away from that level. So we are pretty much back to where we were, in that front.

Moving on to the -- I'm not getting into the numbers of nonperforming assets. But we have frankly had a good quarter. I think Srini looked at the numbers on that front. So it has gone better for us than it was previously. If you look on a Y-o-Y position as well.

The two, three metrics that I always mention to you, which we rely on those indicators. The self-funding ratio of the promoters, which again I emphasize, is not security, but it is reflective of their wealth and liquidity. That has held up now for well over the year. The entire year of COVID has not had any appreciable change. It has been a couple of percent this way, that way, and not much more to say on that front frankly, the wealth of the promoters holding up, I mean, this segment, in the SME segment, it is demonstrated and we always expect that they will bring that money in to fund the business, whenever the need arises. So that is a comfort to us.

The collateral coverage, again at a portfolio level, holding up very well, we are between 80% to 85% odd covered with collateral. This is over and above the current asset security that we anyway hold. The current asset covers the portfolio completely. I'm here talking of incremental real estate collateral, which is usually, the office, the residence of the promoter in question. This 86% is again on a conservative basis, assuming full drawdowns. If you look at it basically, outstanding the coverage is actually in excess of 100% at this point of time.

Just to put out, that the flows have come back. They actually started coming back in around October, which is -- actually if you look at it, as soon as the moratoriums etc got lifted, that's when they started coming back, and they have been coming back in good measures since then.

One more thing that we have done recently, just to corroborate that our views on the flows are all right and genuine, is we -- then the increase or decrease in flows, along with the GST collections of the country and we found that there is a considerable correlation between the two, only I would say maybe in the quarter from Jan to now, maybe our collections have little bit bucked the trend in the positive direction, the GST collections dipped a bit, but collections pretty much held up at the same level. But that's not much to talk about. I think, the correlation is great comfort to us, that the flows that are coming in are genuine revenue generation by these people, and they are not some capital inflows or something like that. So I meant, they are not off track.

So all this is good. While I'm saying all this, one has to now consider that we are into a second wave, when we look at the medical condition. It has not yet impacted the financial system, the way one may expect. Let us -- if you look at it, the medical condition versus the financial condition in the first wave and the second wave, I think the gap is much wider in the second wave, the financial condition is not yet deteriorated to that extent. Lockdowns have been sporadic, localized. Most restrictions are in benign times for economic activity, like weekends and night time. Manufacturing has been allowed to continue. Logistics and transportation has been allowed to continue. So it has been muted -- it has been a muted level of structure. Up till this point in time. This can change. We don't at this point of time, is all I can speak about. I think we should also mention that, wherever restrictions have been enforced, the observance as well as the enforcement has not been as strict as it was the last time around.

So I think we should put this caveat out basis, everything that we are seeing at this moment in time. That said, at this point in time, our behavioral scores on our SME portfolio, also show that we have higher level of the portfolio and the better scores than we previously had etc, etc. So this has one caveat -- things at this point in time moving around.

Quick thing on the ECLGS. ECLGS-1, as all of you know, we were among the prominent banks to be disbursing this amount. I must emphasize once more, because I think, some confusion arose a couple of quarters back, as to whether ECLGS disbursements should be equated with stress. At least ECLGS-1 they should not, because it was universally available to anybody who met certain criteria, or having a particular level exposure, being an SME and not being delinquent beyond a particular level, prior to the February date. So in ECLGS-I, it does not count. ECLGS-2, and ECLGS-3, one might say that it was explicitly for the Kamath Committee stress that ECLGS-3 further for certain steps, that does become liberalization very recently. I think yesterday or day before, allowing a higher level of DPD to avail the ECLGS-2. But frankly we have not done very much over there, because we don't have very much in these sectors. So it has been quite low for us. And will remain so, if you don't have the exposure in the stress sectors, we won't be giving the ECLGS of those sectors.

So that's about this on the ECLGS and I think that's pretty much what I have to say. So Rahul, why don't you comment?

Rahul Shukla -- Group Head-Corporate Banking & Business Banking

Sure. Thank you, Jimmy and I'm going to talk about basically -- commentary in terms of our performance, and at least what is basically the big learning or the big story for me, that I came through seeing this time around.

Wholesale Banking between large, mega and SME corporates closed at approximately INR600,000 crores in customer assets. To clarify, customer assets include advances as well as investments. This was a 26.4% Y-o-Y and 5.8% Q-o-Q growth. I would like to thank our people who have worked very hard to serve customers during very difficult personal circumstances, amid the pandemic.

In terms of averages, the Y-o-Y asset growth for the quarter was 31.1%, which is even higher than the EOP growth rate, which just points to the earnings momentum, and in terms of the large corporates out of the wholesale bank, that number was 41.8%, providing a strong earnings momentum.

Between the businesses, wholesale SME that I mean grew at approximately 10% quarter-on-quarter. The mid corporate grew at 9.2% quarter-on-quarter, while the large corporates grew between 3.5% to 4%. Now we have to keep in context, that this growth came in large corporates, despite unscheduled prepayments and non-drawals and large corporates, to the tune of 8% to 10% of our overall customer assets in that segment. Large corporates also had a high base effect, given borrowings by clients a year ago during end of March to shore up liquidity as a safety measure. So the overall performance has been satisfactory.

Given that the book is high quality, yields did move with market. If it didn't, one would have to question the quality of the portfolio. However, NIMs expanded or were stable in different customer groups, due to a reduction in funding cost, but also due to a careful yield management through a combination of asset tenures, loans versus bond opportunities and early identification and execution on those opportunities.

We also released recently, that our MSME book had crossed INR200,000 crore in advances as of December 31, 2020. Now, this is the -- why is this is significant? Of course, when we released it, it is under the old MSME definition. This size is about a fifth of the overall advances of The Bank. The context of this is very simple. For every rupee of lending in wholesale SME, for example, the earnings is 2.2 times of equivalent lending to large corporates, which is understandable, given different risk profiles. To the extent that opex and credit quality is managed well, this is a significant earnings stream, and today it is a very large critical mass for The Bank. At the current rate of growth, the MSME book is poised to surpass the private sector large corporate book in 12 to 18 months timeframe, It adds a new third solid earnings pillar for the bank, in addition to just looking at it from the perspective of retail and wholesale.

In wholesale SME segment, the bank has seen very strong growth in terms of regions and geographies, our credit book has seen 25% to 30% growth across. We are still not getting requests for enhancement in working capital limit, compared to say a couple of years ago, if you were to discuss it with the activity. It did saw a pickup in third quarter, but is relatively muted presently. We stopped credit demand in pockets like agri processors, ready to eat food processing units, tiles and ceramic exports, textile exporters, pharma players, chemical players auto ancillaries, paper industry who are looking for capex and additional funding. We have seen capex formation in exporters, agri processors, packaged products, packaging, consumer durable and some demand from the PLI identified segments also. Those clients, who have formalized, are in pretty good shape.

For large corporates, economic activity has started gaining momentum across the country, given the budget announcement and prevailing economic environment, while all the sectors are likely to witness growth, some sectors stand out, for example infrastructure, pharma, metals and commodities, cement and materials, food processing, auto etc.

Reported credit flow in the sector is a lower number, which is what a lot of people always ask me, but it is impacted due to corporates borrowing in the bonds and CP markets, as well as a dramatic deleveraging trend that we have observed. The Bank has continued to extend credit flow across sectors. Capex is largely from the PSU sector, as corporates are working at 65% to 70% capacity utilization, which is much lower than 75% peak levels in recent times in pre-pandemic, given strong corporate financial performance, earned profits have gone in foreclosing term loan and paying down working capital utilization. As we mentioned before, we expect private corporate capex picking up in second half. Of course, second corona wave is something that is to be looked at.

The big heartening point for me, is that in the last one year we've gone through the pandemic, we've gone through the state of the economy and as Srini mentioned, outages. But the biggest thing is that, you know the support of our customers, both old and new, who continue to gravitate to us, for our physical as well as digital platform, and so the pull of the brand continues to get stronger.

Now, let me just give you some data to say, why I made the statement. Let's look at the large and mid corporates. In the last three working days in March 2020, when the number of transactions had increased quite dramatically, we had executed certain fresh limit releases, as well as limit enhancements, between large and mid-corporate segment. This year if I take the same last three days Monday, Tuesday and Wednesday, and Monday was a Holi, and so it was a holiday in the North, it was working in the South. The number of transactions that we effected, saw a 93% increase, reflecting a significantly strengthened market position. You would recollect that number of transactions had increased last year-end, which had come immediately post the lockdown. And for this. I would like to give a special call out and thank our operations people, who have just been very diligent in terms of even in the difficult conditions going out and executing transactions.

The second is just the CASA for Wholesale Banking, which was up 15.2% Y-o-Y and 30.8% Q-o-Q. Customers come out and continue to use as transaction bank of choice and the CASA effectively, what I shared with you, the EOP growth rate, go out and reflect that. But flip it on, an average basis for the quarter end right, it was up 25.4% Y-o-Y, which was even higher than the EOP growth rate. So that remains very strong. This came around the strength of the brand, our market share and also some initial impact of the current account circular.

Let's turn our attention to wholesale SME. In this particular quarter, we acquired roughly about 2,500 new customers during the quarter, and that is a 60% Y-o-Y increase, a large proportion of those in SURU. A lot of them preparing, given the pandemic, as well as the waves that are hitting them. Getting on to more digital platform, and which is where clients continue to gravitate toward us. So despite a difficult customer acquisition environment in the first half of the year, when nothing much happened, number of new clients acquired during the full year was 6% higher than prior-year, because the prior year, we had a significant addition of new client base.

Let me move to an area where the wholesale intersects with retail, which is the corporate salary acquisition. In this quarter, the Jan to March, number of new salary accounts that we acquired was 34% higher than comparable period last year. Which again I think to my mind is a very strong endorsement of just the client voting with their feet, and coming out and doing more business with us, for which we are very grateful and you know, thank them.

ECLGS, Jimmy touched on it. As of 5th April, to give you an overall position, we have disbursed across 1,20,311 cases, and both 1.0 and 2.0, largely toward 1.0, and aggregate amount of INR26,534 crores. That puts us toward, basically the top of across all the banks, and we continue to go out and support the government's initiative to support a segment that needs support. So we are in sync with where the political and government leadership is taking the country, and we continue to do our bit.

Lastly to round it up, we remain confident about continuing to gain market share at our historical trend line.

And with that, I will stop and hand it back to Jimmy. Thank you.

Jimmy Tata -- Chief Risk Officer

Thanks Rahul. So just to talk a little bit on the retail portfolio. I'll of course, talk about the [Technical Issues] and Arvind will little bit take over for the business part of it. So the demand resolution, since around October or so was improving steadily, continues to have improved steadily up till the point in March. So where has it reached? I think across all products, barring one or two like SLI, which is not very big for us, but as you will understand, as a product, will be very hard hit by such circumstances. You are within a whisker of where you were pre-COVID on the demand resolution.

Check bounces also looked at the same way. That said, while we are covering in the March quarter and the year-end, I should make a mention here, that the check bounces in April, where -- like halfway through April, so I can't really comment on the demand resolution for April. But the check bounces in the April have taken a bit of an upward blip. Probably some panic due to the medical condition worsening of late, etc, we don't know what it is, can't say whether this is a blip or whether it is a trend, but check bounces in April have been slightly higher than they were in March. Some sort of a trend reversal.

How much, if you want to know? Probably, as I said, from October to March, there was a clear improvement in the check bounce, as well as the demand resolution across products. Maybe back to a January kind of level, they are varying from product to product, but around that much. It's not that the whole thing has been reversed, only a little part of it. Whether it stays doesn't stay, just remains to be seen. It's just too early. We've been -- we've only come across this, as you will understand in the last five or six days, because that's when the check depositions typically starts. They don't start on the first of the month.

So that's to be said. Three, four states to point out, so Maharashtra, MP, Punjab, and Telangana is -- what has little bit pulled us back on the demand resolutions, or we probably would have crossed our pre-COVID levels. So if we get these states tightened up a bit, we will probably pass it.

Recoveries have been rather good, if I may say. We are around 30% over pre-COVID levels on recovery. That said, I must point out that the accounts on which the recoveries take place, are obviously those who were delinquent -- a large part of them at least, will have been delinquent before COVID stuck, because the late period collections.

When it comes to the restructured book, I think numbers, Srini covered along with you. And I think whether it is the retail products or the SME, I think are pretty much the same thing to stay, how we handled it, the approach the bank took was the same, whether it was SME or retail, and we also here had several customers tell us that they didn't want the tag, and that they will definitely pay, even if they are little bit behind us now, and they will not turn nonperforming, and they just refused to take it.

The policy dispensation remains cautious. We are cautiously optimistic on how things are, but we continue to remain very cautious on this. Disbursements in the last quarter, across many products have almost hit pre-COVID. I'll let Arvind talk about all this a little later on. Good demand in the auto and two wheeler sector etc. Credit card spends are up naturally, and understandably, because the e-commerce world has taken a boost, because of the physical world being slowed down. Just personal loans I would say, has had zero inquiries are not up to scratch that they were before the -- so the sourcing for us has been very high quality. As I had mentioned last time as well, the entire team is on the ground. The entire team is looking out. We never let anybody go. We never, we kept the entire sales channel motivated. There were no salary cuts or anything of the sort in the bank. There was no action taken at all. In fact people were -- spirits are frankly quite high, credit to everyone.

We have measured in terms of our internal analytical metrics to sourcing quality. The recent book obviously going to be much better than the historical book was, because there was, if you remember the conversations I've had with you a few quarters ago, we had already started tightening before COVID hit, and then we tightened even more after COVID hit. So the recent book is definitely going to be of a high quality. And now, in addition to that constitutes around 35% to 40% of most product clients in retail assets. So it's now a significant part of the book that has this quality.

For the salaried customers, we focused on the higher income, on the AAAs, on the government sector, all the usual ones, obviously focused even more there. And I must say that, even if there is an economic impact of the second wave, we are not expecting in this segment at least, to see salary cuts and job losses again this time around.

On self-employed, the policy liberalization has been even less than what it has been for the salaried segment products, and we would continue that way, till we see things getting better. The bounce resolution now, if we come a little separate from the demand resolution. So what we managed to cure within 30 days of what bounce is, is actually back on track with the pre-COVID levels across products. So that is again a little bit heartening. That said, the bounce in April has taken a bit of a blip and we're hopeful, but jury's out now whether the demand resolution will not be affected by this.

If we look on -- I'll just take a minute on the sale of assets, because last time we had a couple of questions on that. So this quarter as well, we sold assets approximately INR1,000 crores odd. As we always said, this is going to continue. It's a policy now. We examine the portfolio, and wherever we believe that there is economic value in disposing the asset at this point of time, versus the cost and effort and recovery that we would get through our own efforts over time, including present value, we take the decision to dispose the assets. So that's a continuing factor.

Let me just now move into anything else I need to put out for you. Yeah, let me just get into the asset quality versus the market. So if you look at -- and we have got this from the bureaus. So this data, I must say actually reflect around a two, three month lag, because of the data coming out. It always does. But once again, the higher bureau scores, our shares has a proportion in every product either steady or increasing versus the rest of the industry, our sharing higher scores always more than the rest of the industry. Thanks to our marketing efforts. Thanks to our cost of funds as well. So we have a -- this is reflected both in the bureau inquiries, which you might be able to see yourself, as well as in the monthly disbursements [Technical Issues] so in both respects, it gets corroborated.

Further, if you look at how things have progressed. I think the delinquency differential between HDFC Bank and the rest of the industry, pretty much remains. So the portfolio holding up on a comparative basis quite well. Despite of course, our high market shares in several of these products, the differential remains. In several cases it is perhaps half the market and even lower than that.

I think that's about all. I think not much to say on agri, but held up pretty well. The agricultural sector fortunately was largely unaffected by this. We had a good harvest. We had a good drop. We have good clients. So we have done relatively well on the agri front.

Nothing else to put out over here. Is there anything else I need to say, let me just see my notes. No, I think that's about it. Thanks. Arvind, could you take over?

Operator

So should we start with the Q&A?

Srinivasan Vaidyanathan -- Chief Financial Officer

Arvind Kapil is on the line. He is going to talk.

Operator

Okay.

Arvind Kapil -- Country Head-Retail Assets

Thanks Jimmy. Okay. Retail Assets, I think both on secured, unsecured, retail, working gap between SLI. I think the industry, in our assessments is getting back to the pre-COVID levels, and in some cases actually exceeding it. I can clearly see that the resilience of the middle class is coming back, and we see good growth opportunities, if I were to look at quarter four, and even the first two weeks.

We are witnessing a healthy trend in auto-housing segment. We also see robust growth in personal loan and business loan. We see that the ground-level, retail SME business environment, if I look at the quarter four, is showing pretty robust and we are -- whether it's the hosiery, sports, wellness, bicycle, the trends that we keep at the ground level, the demand remained intact and keeping the quarter four in mind, and even the first two weeks.

Wheat arrival on the agri side, if you take a feel of the ground level. I think wheat arrival has seen a positive upward trend. If you look at the sowing, itself is also on upward, the price is up. So that gives you a sense of the rural ag, the supply chains thereafter.

If you look at the pharmaceutical industry at the ground level and I'm talking more of the smaller retail businesses, they continue to show a good demand. Actually even if you look at down south or up north, you're seeing almost 25% to 30% growth. Chemical industry, even places like Gujarat, imports stopped right now, the certain demand is looking pretty intact.

I think specific to our bank, if you look at the last -- 2021, a quick sense, every quarter we've had sequential growth. Whether it is quarter two to quarter three, quarter three to quarter four, and we -- as we move into the quarter and the financial year, in the new financial year we are prepared -- if you look at -- like I mentioned, if you look at the first two weeks and even if I were to compare with 2019, is looking very robust growth right now.

I guess having said that, we are closely watching the COVID situation. How it pans out and the plans are to beef our sources, to ensure that this financial year stays on course for a solid growth. And we're going to fight our way through, to make sure this does happens. Yes, one has run these kinds of extra micro management in business plan. Whether it's going to be the internal customer franchise that we are going to leverage, or it's going to be the external distribution strength, where we have a first right of refusal and all such points, we are beefing ourselves up, keeping the present external environment in mind.

I think looking at the resilience that I see and the demand opportunity I see, I think we're going to focus on expansion in couple of businesses, and we're going to focus on segmental expansion for market share. That's going to be our strong strategy for robust growth this year. And we do expect solid robust growth this year. Thank you.

Srinivasan Vaidyanathan -- Chief Financial Officer

Okay. Steve, can you please open it up please for Q&A.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]. First question is from the line of Mahrukh Adajania from Elara Capital. Please go ahead.

Mahrukh Adajania -- Elara Capital -- Analyst

Yeah, hi. Congratulations. My first question is on the movement of NPAs during the quarter. So slippages are around INR47 billion. Could you give us the breakdown of upgrades and write-off recovery?

Srinivasan Vaidyanathan -- Chief Financial Officer

Okay. You've got that 1.66% annualized. That's how you got the 4.6 something like that. The write-offs for 3.5, that means INR3,500 crores or so approximately the balance is upgrades and recoveries.

Mahrukh Adajania -- Elara Capital -- Analyst

Okay, thank you. And my question on slippage is that this INR47 billion or 1.66% would include pro forma of the previous quarters, right? So what would be the slippage for the quarter, excluding pro forma of the previous quarter?

Srinivasan Vaidyanathan -- Chief Financial Officer

We reported pharma. In the prior quarter, we gave you 1.86.

Mahrukh Adajania -- Elara Capital -- Analyst

Correct.

Srinivasan Vaidyanathan -- Chief Financial Officer

That includes that included pro forma slippage.

Mahrukh Adajania -- Elara Capital -- Analyst

Correct. So this is the slippage for the quarter?

Srinivasan Vaidyanathan -- Chief Financial Officer

This is the pro forma slippage. For the quarter, similar basis, in the sense that, it will not include certain things that we included in the last quarter and 1.86.

Mahrukh Adajania -- Elara Capital -- Analyst

Okay. Got it. My last question is on technology. So to address all issues that RBI would have waived, how long do you think will it take you? I mean, obviously would have already started work. But how long will the total upgrade take you? How many months? And would RBI's removal of the ban we contingent on completion of the upgrades, or will it happen in the interim only?

Srinivasan Vaidyanathan -- Chief Financial Officer

So I can answer the first part. The second part is for the discussion with the regulator, right. So I can't talk on this now. But I'll tell you, in terms of the plans or what we are doing, I tried to describe some of those action plans that we have. We had demarcated the actions between certain things that are short term. Certain things that are medium and long-term. Long-term keep it to the side, it could be 12, 18 months, cloud strategy as an example, is one such thing right, this is the long term.

In the short-term, it is about the DR resiliency, where we tune recovery time and the recovery point and so on, and some enhancements in security, some kind of -- in the medium term, some more security enhancements or in terms of automation of the whole process in terms of orchestration. And both in the short and medium term, we will have application network monitoring tools coming through. So this is how we address it as short, medium, and long. And some of these are frankly items that are new standards, which means that to -- that's why I give a preamble saying that we have set some higher standard in some of these processes that we are implementing. I do not have visibility what are contingent upon regulatory discussion, but that -- that's our conversation with the regulator more than here.

Mahrukh Adajania -- Elara Capital -- Analyst

Got it. And medium-term would mean six months from now or...

Srinivasan Vaidyanathan -- Chief Financial Officer

Medium-term would be about six months or so.

Mahrukh Adajania -- Elara Capital -- Analyst

From now. Okay. Okay, thank you so much.

Operator

Thank you. The next question is from the line of Manish Shukla from Citigroup. Please go ahead.

Manish Shukla -- Citigroup -- Analyst

Yeah, good evening and thank you for the opportunity. At one point of time, Rahul mentioned about yield management on the corporate book. Just wanted to get more color on that, because considering that you lend more to the larger corporates, they were borrowing more bonds than loans, which would probably be lower yield. So how does the overall corporate book work?

Rahul Shukla -- Group Head-Corporate Banking & Business Banking

So Manish, when I talk about yield management, you can go out and give three-month money, which goes even 12 months money in large public sector, that's up 4%. We don't need to do that. Secondly, you basically do a tenure with a put call, you might as well get a slightly better position. So we have to pick our spots and we have to execute early the transactions that were executed early, maybe in January or maybe sometime in October, November. Those -- the yields are better compared to anything else. I understand that the bond yields have gone down quite significantly, but we don't need to participate in all of those. So we did what made sense for us, given our ALCO RBP framework. What was not palatable, you know, that was something that we were not looking to go out and do. And as I said, on the alternate side, the MSME was a pretty good progress that we continue to make, where we don't have these sort of issues.

Manish Shukla -- Citigroup -- Analyst

Sure. On the MSME, did I get the number right that its now roughly about 20% of the overall balance sheet?

Rahul Shukla -- Group Head-Corporate Banking & Business Banking

So if you go back last quarter, we went out and disclosed the advances number. I don't have that. I think it was INR10,87,000 crores or so. Out of that, I think when we said MSME book that was about INR2 lakh crore and odd, roughly about 18% is what it was as of December 31.

Manish Shukla -- Citigroup -- Analyst

Sure. And on the wholesale book, what would be the approximate split between, let's say, less than one year, and more than one year kind of loans? Overall wholesale book?

Rahul Shukla -- Group Head-Corporate Banking & Business Banking

Manish. We don't share that detail...

Manish Shukla -- Citigroup -- Analyst

Or working capital term finance, if you want to put it that way?

Rahul Shukla -- Group Head-Corporate Banking & Business Banking

We don't even do that. But I think in a large book if I continue to basically keep 100% working capital, that would be running a lot of risk on the earnings momentum of the bank, because you could get paid down. So we normally like to basically say that about a third in term, and the rest in short term. But this keeps changing from environment to environment.

Manish Shukla -- Citigroup -- Analyst

Sure. A question to Jimmy, I know the situation is evolving, but you rightly mentioned that at the moment, the financial or economic impact of this second wave seems to be less than what we had then gone through last year as a country. But based on the current situation, do you think this impacts between growth and asset quality, what would be more worried about, depending upon the situation right now?

Jimmy Tata -- Chief Risk Officer

Based on the current situation, should a financial impact manifest, we are currently in the process of finalizing various stress tests, which we have already completed. But I don't want to put those results out just now, because they might be unnecessarily overly conservative, as were -- when we did it the last time round. If you remember, we had to actually revise our stress test numbers, because we were excessively conservative. So don't want to do that now. But I think there is a lot of learning between last time and this time. The reason perhaps for our initial conservatism last time, was that we didn't know what the government and the Reserve Bank are going to do. And as everyone knows, now they did a hell of a lot. So we would expect that if there is the medical condition, which is quite grave, manifesting into an economic condition, we would expect that there will be similar levels of assistance coming in from the government. And then, if you look at our portfolio and client selection, the way it stands and the way it took the first wave, we would hope not to have any -- very serious consequences ourselves.

Manish Shukla -- Citigroup -- Analyst

Sure. Those were my questions. Thank you.

Operator

Thank you. The next question is from the line of Suresh from Macquarie. Please go ahead.

Suresh Ganapathy -- Macquarie -- Analyst

Yeah. Srini, just two questions. One is on the contingent provisions which have been dipped into. There is some reconciliation of INR400 crores, in the sense that you had INR8,600 crores of contingent outstanding. You made INR1,300 crores, so it is INR9,900 crores and you dipped to INR3,600 crores, right but the account -- the eventual number you have got is 5,800. So there is some INR300 crores, INR400 crores of difference, what is that?

Srinivasan Vaidyanathan -- Chief Financial Officer

That is the interest on interest that we have set aside, which is going to give you the 5.8 or 5.9, I didn't use that number.

Suresh Ganapathy -- Macquarie -- Analyst

Okay. So the interest on interest, there was a totally INR500 crores right, roughly?

Srinivasan Vaidyanathan -- Chief Financial Officer

Correct. Correct.

Suresh Ganapathy -- Macquarie -- Analyst

Yeah. Okay and just from a better understanding perspective, we can assume that these INR3,600 crore are basically on the INR10,000 crores of the pro forma slippages that you reported in the previous two quarters. So that is how we look at it Right?

Srinivasan Vaidyanathan -- Chief Financial Officer

Correct.

Suresh Ganapathy -- Macquarie -- Analyst

Yeah. Correct. Okay. That's one thing. Second thing is, I want to deliberate a bit more on technology for the benefit of everybody else in the call. I mean, how much of this has got to do with your scale; because you are 40%, 45% payments, market share and stuff. So clearly your loan market share is 10%. So there is clearly an issue with respect something or the other which is hampering, right? So it could be volume two, three years ago, now it is some server issue, disaster recovery. So do you really think this has got to do, with the fact that you cannot digest more, because of the fact that the volumes are really plenty? Or has there been an under-investment in technology, underinvestment in some of the other things, because the constant feedback that we're getting from the ground is that, some of your peers have a better app, better user interface, better experience. Have you benchmarked against those and then come out with any reports? Something that you can add for the benefit of everybody in the call, please? Thanks, Srini.

Srinivasan Vaidyanathan -- Chief Financial Officer

Okay, thanks Suresh for asking that. See on the technology front, the three previous ones or even the latest ones, that's why I took some time to describe, had nothing to do with capacity as such, right. They were very disparate events. We learned from these events, what these are. Continuously we learned and they are not repeating. So it's nothing to do with -- from that sense of capacity. Certainly, there are inconveniences which -- for which we have apologized. There is a customer experience predominant on whatever we do, right. We have to be humble and modest in how we approach, and that is why we take this as -- something is trying to set new standards in what we do, and I described some of those actions that we are trying to say, that how this will set new standards right.

From a transaction point of view, from a customer preference point of view, we gave you a few details to see what customers think. Like, for example, we had 2 million liability relationships in this quarter, lot through digital approach, video KYC approach, right, and we did add two -- and for the year, we added 7 million customers, the last 12 months, 6.5 in the previous year, and the year before that was 3.5 million customers. So we've added customers. Customers prefer us for a reason, right. I'll leave it at that. And the second thing is that, Rahul Shukla spoke to you about, why SME or corporates prefer us, and what sort of transactions they put through. Our capacity was in the constraints, where all quoted 93% higher transaction volumes in the last three days of the year compared to prior year. So there was no capacity constraint, when 93% increase in the throughput that came through, right.

If you think about the card for example, right, well the customers prefer us, in terms of the spends, right. If you think about the spend market share on the issuance. Last year, February, we have data for February, '20 and '21 as an example. The issuance spend share was 29%, now 30%. Our customers do prefer us and they use us more and they spend more on our card, right. The same as the receivables right, little bit of market share. Last year since [Indecipherable], we were at 53%. Now we have a market share of 56%. Again there is a reason why customer prefer us, and it is our digital approach, it is our technology they prefer us.

Let's look at the acquiring spend, right, the cards acquiring, merchant acquiring. Last year, we have January to January data, I don't have February or March yet, but January -- last January '20 pre-COVID, we had a market share of 47%, and the current January '21 market share is 50%. Right? So there is a reason why merchants prefer us just and there is a reason why customers prefer us, and certainly they like our digital. They like our approach. They like our products, they like to use our products. In terms of -- that is the first part of what you asked in terms of the capacity or what, and I tried to describe what they are.

In terms of whether we benchmark with the rest of the players in the industry. We do, right. And each one -- that is why the five fingers in the hand are slightly different, and each one has got a purpose to serve, and that is how we approach it. There are certain applications we have, it serves some purpose. There are certain other applications and features somebody else has, it serves their purpose. And whether we could we could look at it to improve, that is a continuous process we do, and that parts of various versions and upgrades that we do, that is part of that. And there is always, that is why I prefer to say, that we have to be humble and modest in our approach, because we do learn and we want to learn. We continuously take it. Cussing from others is not something that we should be shy. We can take the good things and we'll put it in. And that is a continuous process. It's not an event that happens periodically it continuously happens.

Suresh Ganapathy -- Macquarie -- Analyst

Okay, thanks. And what are the backup options, if there is a delay in RBI approval, what are the contingent plans you have in mind, to ensure that the business is good?

Srinivasan Vaidyanathan -- Chief Financial Officer

I described that the nearly three-fourths of our card sourcing is our existing customers of the bank, three-fourths almost, right, that's how it comes. And they all have debit cards. They use and we offer instalment loan on debit cards, right. And at some possible time, we may have revolving facility on debit cards revolving facility on salary accounts. There are several choices which are there, but then we always look optimistic and kind of a positive in terms of how we approach it. And we feel confident that some of our work that we are putting through, should bear good results.

Suresh Ganapathy -- Macquarie -- Analyst

Thanks Srini.

Srinivasan Vaidyanathan -- Chief Financial Officer

Thank you Suresh for asking.

Operator

Thank you. The next question is from the line of Kunal Shah from ICICI Securities. Please go ahead.

Kunal Shah -- ICICI Securities -- Analyst

Yeah, thanks for taking my question. So on this second wave and the contingency buffer if you look at it, the incremental INR800 crores, which we would have created outside of interest on interest reversal. So this is somewhat also the outcome of the initial results of the stress test which we are doing, or maybe stress test is still outside of it, and there will be more kind of a contingency buffer, given the environment, that will continue even in the first half. What is the sense, looking at the cumulative buffer which we have current?

Srinivasan Vaidyanathan -- Chief Financial Officer

As you know, we built a large every quarter -- at least, last four, five quarters we have given how much we have built and we haven't utilized other than the pro forma, which because there was a court directed, so we couldn't declare it and put it directly. So everything you said, we have done otherwise [Indecipherable]. Again part of the whole thing is that, we want to keep the balance sheet resilient, quite strong, and for any kind of shock that it can take, and that is purely the strength, and at any point in time, if there is a justification, we will continue to build. If it warrants, the situation warrants, we will take. But as of now, the assessments that we have done, yes there is -- if there is something that we could build, we will build.

Jimmy Tata -- Chief Risk Officer

We have built nothing to add there, as we always said our contingent provisions are precautionary, not anticipatory. They remain precautionary at this point in time. There is not enough information on the economic impact of a second wave right now, to sit dimension exactly what we have. But in a sense, we do think over the last several quarters, we have developed a more than adequate buffer. And of course, given the learnings of the first wave itself, one would feel a little more reassured of that.

Kunal Shah -- ICICI Securities -- Analyst

Sure. And the second question is on cost side. So we have highlighted that we would get toward 38%, 39%. But when we look at in terms of cost to asset, we are back to where we were almost the pre-COVID level. So is there any line item, wherein maybe with this COVID, the efficiency would have set in and we would have completely shaved it off from our cost to asset, and we could see it stabilizing at a lower level, because that was not visible in Q4? Not sure if it was because of the branch additions, which were 123. So is that the reason, or maybe there is not much to look into the cost efficiency during the COVID period?

Srinivasan Vaidyanathan -- Chief Financial Officer

The COVID side -- what the COVID did is, there are some kind of retail asset origination type of costs that are lower, that would come back as we build more assets on books, it would come, right? If you look at the -- on a Dupont basis if you look at the -- not the efficiency basis, but on a Dupont basis, when you look at the expenses, operating expenses, 2.25, right. When you look at it pre-COVID, almost 2.4 or so. That is why we said -- and then it went all the way to 1.8 something in first quarter, when hardly there were any activities happening out in the field from a sales and promotion point of view. And we have gradually gone up, right, then it was 2 and something, 2.1 and something, now 2.2 and something right, in terms of costs, on the Dupont analysis cost, if you see.

That is why we say that we will make investments. We will not shy, when there is a market opportunity. We will not be shy to run programs, promotions or bring in more salesforce, activated to begin. So that is why we said, in the short run, that the cost -- the efficiency can go up to 38 or 39, and then -- but our medium-term commitment, long-term commitment remains that how do we bring it back down to 35. Once scaled to the reengineering process and straight through a digital approach, should bring the costs back down, right. Naturally when we have adjusted [Phonetic], revenue growing more than costs, that there is a natural process of scale that brings it down. Then there are other kind of an additive action that also works on to bring the costs down. So that is over a medium-term, long-term.

Kunal Shah -- ICICI Securities -- Analyst

Sure, sure. Thanks a lot.

Operator

Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I now hand over the conference to Mr. Srinivasan Vaidyanathan for closing comments.

Srinivasan Vaidyanathan -- Chief Financial Officer

Okay, thank you. Thank you, Stephen for orchestrating and taking us through this. I want to thank the participants, and if we missed anybody, I know we ran five, 10 minutes late. If we missed anybody, feel free to call, get in touch with our Investor Relations, Ajit Shetty. We'll do our best to clarify anything that you have on our results. Thank you again.

Operator

[Operator Closing Remarks].

Duration: 88 minutes

Call participants:

Srinivasan Vaidyanathan -- Chief Financial Officer

Jimmy Tata -- Chief Risk Officer

Rahul Shukla -- Group Head-Corporate Banking & Business Banking

Arvind Kapil -- Country Head-Retail Assets

Mahrukh Adajania -- Elara Capital -- Analyst

Manish Shukla -- Citigroup -- Analyst

Suresh Ganapathy -- Macquarie -- Analyst

Kunal Shah -- ICICI Securities -- Analyst

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