Private-sector lender Federal Bank saw a loan growth of 25% in the first half of FY18 and expects to clock a similar rate of growth for the full year, managing director and chief executive officer Shyam Srinivasan told Shritama Bose. The rise in the bank\u2019s non-performing assets (NPAs) in its retail and agri books is the tail effect of the demonetisation dispensation for small-value loans, he added. Edited excerpts: You\u2019ve seen fairly healthy credit growth. Which segment is this led by? The good news is that all the four segments that we actively focus on \u2014 whether it\u2019s corporate, retail, SME or agri \u2014 have all grown sequentially between 5-7%. So, we think the broad-basing is a good outcome. Second, as we have grown into many branches in states like Maharashtra, Karnataka and Tamil Nadu, we are seeing that those are beginning to yield good outcomes. So the rate of growth of credit in these geographies is now almost 3x of our past run rate. The focus of more distribution led by geography, more distribution led by our RM (relationship manager) model, along with branches maturing, has led to activity levels increasing. It is a diversified and distributed effort, which is what we have focused on. Your NPAs in the retail and agri books have inched up 20% and 14.6% respectively. What would be the reason for that? The increase is explained by some sectoral implications in agriculture in one or two geographies; likewise in retail. These were the tail effects of the demonetisation dispensation that was there. People who could not meet their commitments had to be recognised as NPA, but I am thinking that\u2019s more or less tapering off. Which geographies would this impact have been in? A large part of our book of that profile is in Kerala. So they\u2019ve had challenges. What were slippages for the quarter like? The total slippage for the quarter was Rs 284 crore. Rs 106 crore was in SME, Rs 107 crore is in retail, Rs 19 crore is in corporate and Rs 50 crore is in agri. Are retail and agri slippages typically higher for you than corporate slippages? No, corporate tends to be volatile because in many quarters we\u2019ve had zero. The odd quarter where we have Rs 100-150 crore, one account goes back and we see that impact. Otherwise, retail typically is about Rs 70 crore and SME is about Rs 130 crore. Put together, retail, SME and agri is about Rs 220-Rs 225 crore. This quarter is about Rs 250 crore. What would your full-year guidance for the net interest margin (NIM) be? In the first half, blended (NIM) is now at 3.25%. I think that\u2019s the full-year margin that we are expecting to work with. What share of your book is now linked to the marginal cost of funds-based lending rate (MCLR)? Almost 80% of the book is on MCLR right now. The remaining are fixed-rate loans which may not dramatically change. Twenty percent is of the book is between fixed-rate and base rate-linked. What would your full-year credit growth forecast be? Our first-half growth is 25%. We would like to see it at that or in that zone. Full-year credit growth of 25% would be a great outcome.