Abhishek Murarka: So there will be no sort of approach to limit the, let’s say, percentage of overall exposure to NBFCs in light of whatever nudges have come from the regulator, or caution, let’s say, that would have come?
Srinivasan Vaidyanathan: Correct. The way to think about it is that where it is to be directed lending, which is priority sector is #1 preference, right? And by the way, some of our NBFCs are government-sponsored NBFCs, right? So — and they’re not into consumer lending at all. And so I do want to distinguish. Of course, the circular does not distinguish between different categories of NBFCs. So our NBFC does not necessarily need to be lending only to consumers or of segmentation, which is lower than the bank-targeted segmentation for lending, no. NBFCs are also government-sponsored, government-linked NBFCs are there, where we have a good relationship with them.
Abhishek Murarka: Okay. And just another one on the cross-sell. At the time of the merger, we were talking about how you benefit from cross-selling your products to the customers who are coming to the fold. How do we track that? And when do we start seeing those cross-sell benefits, either in terms of high retail fee or can you start disclosing some sort of cross-sell metrics? So how do we track whether that’s really accruing or it’s taking time?
Srinivasan Vaidyanathan: Very good. Thanks, you touched upon that. I’ll touch you — I’ll give you one and I’ll tell you 2, 3 things that we will start to publish and show it to you. One is that, we said we want savings accounts. That’s one, because we want to offer the bank not just a mortgage product. So if you look at one month, the last month, the December. In October, we showed to the broader world in terms of how various digital approach that we have taken to offering this bundling of products. Savings account is an important part of the product suite that we offer. Among the disbursals that we had, in 1 month, if you take 40,000-plus disbursals, first disbursals because I’m not counting for the disbursals which are ongoing, right, second installment, third installment, leave that to the side.
On the first disbursals that have happened in the month — in December, roughly half-half existing to bank and new to bank, half-half of that. Among that half, which is the new bank, almost 65% of them we have penetrated with the savings deposit. So we’ve gone with the 65% penetration to start with, right? I’m talking about the December, where we are. And that penetration comes with the deposit balance, at least 1 to 2 months of EMI, which is INR 30,000 to INR 35,000 on an average we have taken from the customer base where we have opened. So we’ll publish this. So one is savings account as a product and what is the penetration on that. That’s number one. And I give you an example of 65% of new to bank, first disbursals, we have had that, and we want to take it to 90, 95, 99.
We will keep tracking and reporting that. The second one is the credit cards. We’re just beginning on that one, we will report on that as a product in terms of how we are offering credit cards. The third is consumer durable. Consumer durable, again, one is the offer. The second one is a drawdown because the customer will not — we will make that offer on the consumer durable, customer will drawdown a month or a quarter or 6 months later as the house is ready for the person to move in and do. So — and then over a period of time, we will bring in the other products. So insurance also is something that we’ll start to disclose to see the penetration of — penetration level of insurance. The things like the demat account and the mutual funds and those sort of things, over a period of time, we will come with that.
But there are 9 products that we will come up with, out of which 3 are digitally enabled. The rest will be soon, and we will start to report them and show it to you.
Abhishek Murarka: Sure. Really had to get some more granularities because that will help us figure out how the cross-sell effort is going.
Srinivasan Vaidyanathan: Thank you. We will put up a page or 2 from next time and we will have that.
Operator: Next question is from the line of Anand Bhavnani from White Oak Capital.
Anand Bhavnani: I have a question on the consumer behavior. This has more to do with seeing revolve rates on credit card being much lower than pre-COVID levels. Similarly, on the current — on the savings account side, the growth rate is weak. So, can one surmise that because of good apps available on mobile devices, consumers are now being very active and not giving in to the inertia on both the asset side, the credit cards, they are not revolving. They are just taking personal loan or something? And similarly on the liability side, the consumers are moving away their deposits to an account where they’re getting 7%, 8%, whereas we are giving, let’s say, 3.5%. So have you done any behavioral analysis on both assets as well as liability side to see how across the broad spectrum of your customers, is there any data to prove through these thesis?
Srinivasan Vaidyanathan: See, in terms of the customers — you touched upon the revolver. Thank you for touching that. See, the revolvers haven’t grown. If anything, actually, in this quarter, we do — we did see a slight reduction in revolver percentage, right? We’re not seeing that. And in some other questions, I would allude to how card bunch of customers. Customers who have credit cards and savings accounts with us and you see their balances are 5x, little more than 5x — 5.4x their balances is what they have in the deposit accounts. So that is also healthy. It was less than 4 3 years ago. Now it is 5.4. So it has grown. That’s the second thing. The third thing in terms of whether some of the digital properties are enabling, less use of card revolving and alternatives.
See, in our customer segment, that’s not something that we are seeing because it is more of — the segment that we have chosen and working on is little more higher rate. That means a little higher score customers. I think we have talked about the revolver 1 to 3 months and 4 to 6 months and 6-plus months — call it, 6-plus months revolvers. Across these 3 revolving categories, we are not seeing pickup happening. So that’s part of the customer base, and that’s part of the cash that they have, or some of them have got impacted through the COVID and come out of it and not survived and come through it and not indulging in any of these things. And some of them who do, take it for a short period of time, right? So that’s the 1 to 3 months category if you see they take for some short personal loan or they don’t want a 2-year or a 3-year or whatever the tenor personal loan, they want it for a short period of time, they don’t mind taking it.
So we do think that the category is very attractive and very nascent because you know that there are only kind of 90 million, 100 million credit cards in this country, and we would expect that to be north of 500 million. So we have enormous room to go. The other aspect is that whether alternative payments UPI or anything, those kind of things or direct debit system, whether those things that would only increase the balances in the savings account. So somebody who is using UPI previously was drawing down cash and paying through. So the cash was going out of the bank. Now the cash is in the bank account and is using UPI. So it only enhances — anybody using UPI only enhances balances in the account. So there are pluses and minuses across all of these.
But at the end of the day, the customer segmentation that we are working with, we’re confident that, that will bring in the balances and grow as the economy grows.
Anand Bhavnani: Sure. But the question is whether the minuses are overwhelming the pluses because the account opening these days is less like an hour’s affair and if a bank is offering 7%, 8%, and we are seeing these banks which are offering 7%, 8% are seeing very high growth rates on their liability side. So is it that the smart customers of yours are now using these properties and it’s a structural change and hence, it will be a headwind to our deposit accretion targets?
