Mahindra and Mahindra Financial is in focus on the back of the earnings, which saw a massive deterioration in terms of asset quality. To discuss the quarter gone by and the outlook from here on CNBC-TV18 spoke to Ramesh Iyer, Managing Director of the company.

Restructuring as a percentage of total loan book for the company was roughly 2.5 percent in the quarter. Talking about restructuring for the upcoming quarters, Iyer said, “We are in absolute retail assets in rural and I don't think there will be a substantial jump to the restructuring even, going forward. And the reason I say that is because these are all earn and pay customers, and they say as earnings begin to happen, the market condition starts to improve, we will start repaying and we don't need a long term, and they don't want to incur a higher interest.”

“Moratorium was something they grabbed because it gave them three, four months for settling down. But restructuring is something they believe gets extended unnecessarily for longer, and they don't want it. So we don't see a very high book percentage coming into restructuring,” he added.

So the request for restructuring is a very small number but nothing substantial, he reiterated.

The NPAs in the quarter gone by jumped 15.5 percent. Explaining the reason for the higher NPAs and outlook for the coming quarter, Iyer said, “It is important to understand what is this 15.5 percent or whatever, that's a regulatory need to call them an NPA and provide for it, but these are very temporary moment into that bucket and cost by the liquidity pressure on the customer front where their earnings -- out of 90 days, if you work for 20 days, this what would happen to certain segment of customers who are in that market. So, they are not bad customers, they are not creditors customers, but they are temporary blip and you will start seeing the reversal right from this quarter itself.”

On GNPAs, he said, “If you look at collection, efficiency is one matrix we clearly monitor and in June, we had close to 95 percent plus going, and we already seeing July showing that trend. If that is going to be the trend, I don't want to honestly put out a number on where the GNP would be but at least by March, whatever increase in GNP that you saw in this quarter are likely to substantially get reversed.”

For the entire interview, watch video

(Edited by : Bivekananda Biswas)