Kotak Mahindra Bank plans to push its unsecured retail book to the mid-teens from the current 10.7 percent, said Shanti Ekambaram, President, Consumer Banking, Kotak Mahindra Bank.
“We are very clear on the unsecured retail book and mid-teens is what we look to keep the portfolio. These include our microfinance and credit card business,” Ekambaram said.
In an exclusive interaction with Moneycontrol, Ekambaram highlighted that the bank will have a balanced approach where it would manage risks efficiently in the segment.
“During the pandemic and as COVID-19 was nearing its end, our unsecured portfolio was around 3.5-5 percent of the total portfolio and all other banks had around 15-20 percent,” Ekambaram said.
“After the pandemic, the economy rebounded and risky and loss-making customers were out of the system, which presented a great time to build the unsecured portfolio,” Ekambaram said. At the same time, Ekambaram highlighted that consumption in the economy returned.
“With this, our strategy was and is to keep a cleaner environment. Also, deep investments in data analytics helps,” Ekambaram said.
“During bad times, it is important to look at who you are doing business with. The biggest risk of the unsecured segment are economic risks like loss of jobs, and shrinking economy. Here, managing risks is important. Our bank and all banks have strong recovery mechanisms,” Ekambaram said.