RBI bans Kotak Mahindra Bank from on boarding new online customers
However, the RBI (Reserve Bank of India) said the bank shall continue to provide services to its existing customers, including its credit card customers.
Shares of Kotak Mahindra Bank gained over 2 per cent in morning trade on Tuesday after the company reported a 35 per cent jump in its consolidated net profit for the January-March quarter.
The stock jumped 2.13 per cent to Rs 1,761.20 on the BSE.
At the NSE, it rose by 2 per cent to Rs 1,761.
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Kotak Mahindra Bank on Monday reported a 35 per cent jump in its consolidated net profit for the January-March quarter to Rs 2,589.32 crore on core income growth, and pointed out that lending exposure to the lower end of the spectrum in consumer loans is a challenging segment amid the raging COVID-19 pandemic.
On a standalone basis, the private sector lender reported a 32.82 per cent jump in net profit to Rs 1,682.37 crore for the quarter, while the yearly profit for FY21 rose by 17 per cent to Rs 6,965 crore.
Its net interest income for the reporting quarter moved up to Rs 3,843 crore from the year-ago period’s Rs 3,560 crore, on the back of a 1.8 per cent increase in overall loan book and also narrowing of margins to 4.39 per cent from the 4.72 per cent level in the year-ago period.
The non-interest income increased to Rs 1,950 crore.
Its executive vice chairman and managing director Uday Kotak told reporters that the lower end of the spectrum in consumer loans was a challenging area to operate in, which includes personal loans, credit cards and also micro lending.
Keeping the same in mind, the bank has consciously reduced its exposure to retail unsecured lending over FY21, and it now contributes only 5.8 per cent of the overall book as against 7.5 per cent in the year-ago period.
Uday Kotak said the bank will fly through the clouds over the next few months, and lend only when it feels comfortable. He said it is very bullish on the home loans space, where it lends against very strong security of the house, and does not have any plans of hiking its competitive interest rate on the same despite an increase by competition.
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