The bank's asset base is shrinking continuously...

The economic environment has conditioned our strategy. While we have disbursed loans, there have been repayments in the normal course. We are focusing on growing our retail liabilities and strengthening our distribution strategy.

So, are you seeing the results of more deposits flowing in?

Our Casa (current account savings bank account) base has increased by over 250 basis points to 28.7 per cent (at March-end). Net interest margin has also improved by around 20 basis points. The focus is on increasing the share of Casa and the results should be positive.

Are there any signs of improvement in the demand for loans?

We see an improvement in the overall environment, be it in terms of business confidence or capacity utilisation. While there are some positive signals, for it to translate into higher demand for loans will take time.

The share of retail loan in your loan book has dropped below 50 per cent, but in terms of bad debt, the retail sector accounts for over 70 per cent of the gross non-performing assets�

The proportion of retail assets is higher, so NPAs from that part would be higher. It is in line with our expectations and we have had a similar situation in the past as well. So, there is nothing unusual. The ratios will be different for different segments. For instance, within retail, housing will have a different ratio.

Can you tell us about the provisions made on account of your UK operations where profits have fallen from $38.63 million to $6.8 million?

It is lower due to MTM (mark-to-market) provisioning. There are no issues with our loan portfolio. A small part of the investment portfolio had to be marked-to-market. It was due to the credit spreads. Also, it has only been marked-to-market and we have not realised any losses. We have around $3 billion in bonds issued to various banks and there has been a marginal decrease. We have sold the credit-linked note and collateralised debt obligation portfolio of $600 million.