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Kotak Mahindra Bank plans to take unsecured loans to 15%
August 18, 2023
Kotak Mahindra Bank has recently made a strategic move by hiring an ex-Citi executive to drive their credit card business. This move aligns with their focus on expanding their credit card offerings. The bank’s credit card business has been steadily growing, accounting for 11 percent of unsecured loans.
Their ambition is to scale this to 15 percent, which includes an emphasis on credit cards and presence in 11 states, including through microfinance institutions (MFIs), said lender’s management at the Spark Conference.
In the first quarter of FY24, the lender noted an increase of 18 percent in customer assets, including advances and credit substitutes. The bank’s unsecured retail advances (including Retail Micro Finance) accounted for 10.7 percent of net advances as of June 30, up from 7.9 percent a year ago, with growth across segments such as credit cards, personal and business loans and MFI.
Notably, Kotak Mahindra Bank has also tapped into the younger demographic with its 811 accounts, with 81 percent of these customers being below the age of 35. This has been facilitated by offering products such as secured credit cards and personalised debit cards featuring visuals of their own IPL team, resulting in higher uptake from these account holders, the bank said.
Furthermore, the bank’s emphasis on liability products, such as savings accounts and active money, has been gaining traction. They have managed to maintain a saving accounts rate of 6 percent for a decade and have reduced the SA rate differential to 50 bps compared to peers.
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