Pain in microfinance will linger for at least 3-4 quarters: DCB Bank MD

Following DCB Bank's 2025-26 first quarter (Q1FY26) earnings, Praveen Kutty, managing director and chief executive officer (MD & CEO) of the bank, spoke to Subrata Panda on the lender's performance, growth strategy going forward, and plans for raising capital. Edited excerpts:

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Q. Your provisions increased in Q1FY26...

We have a top-line growth of 20 per cent, in line with what we have been doing consistently for the last four quarters. And we are keeping the bottom line also in sync, with the top-line growth. Despite a rate cut of 100 basis points (bps), we have managed net interest margins (NIMs) well. We have also managed the cost to a degree where our cost-to-income ratio is 59:97. The big story, going forward, clearly is clamping down on the cost of deposit, and ensuring that the cost to average assets works out more in our favour. On the provision, we have taken a conservative stance. And, even after doing that, we are able to grow the bottom line by 20 per cent. Our guidance has always been to keep the credit cost between 45 bps and 55 bps. Having said that, over the next three quarters, the credit cost probably will be lower than 45 bps.

Q. Has stress in the microfinance book peaked?