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Lifting of RBI Embargo on Kotak Mahindra Bank bodes confidence in the franchise

ICICIdirect Research 14 Feb 2025 DISCLAIMER

Reserve Bank of India (RBI) had imposed restrictions on Kotak Mahindra Bank on April 24, 2024, due to supervisory concerns. Removal of restrictions allows Kotak Bank to restart digital account openings (Kotak 811) and credit card issuance, which will enhance customer acquisition, boost deposit growth, and strengthen its retail banking segment.

Kotak’s credit card business had been contracting since the ban, with its portfolio reducing from 4% to 3.4% of advances. The embargo also affected its digital banking initiatives and customer engagement. Resumption of operations will help regain lost ground, enhancing valuations upward.

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