Tag: Kotak Mahindra Bank

Ahead of festive season, banks slash interest rate on home loans. Get the details here, BFSI News, ET BFSI

Banking & Finance

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Festive season has commenced and banks as well as non-banking financial institutions have already rolled out a plethora of festival offers like lower interest rates on loans and waiver of processing fees.

Ahead of the festive season, many top banks have announced offers and discounts on home loans.

State Bank of India (SBI), ICICI Bank, Punjab National Bank (PNB), Kotak Mahindra, Bank of Baroda (BoB) and Yes Bank are among the banks offering home loans at attractive rates.

The offer is for a limited time period.

Bank Women Others Effective Rate of Interest
SBI – – 6.70% onwards
ICICI Bank – – 6.70% onwards
Yes Bank 6.65% onwards (salaried) – 6.70% onwards
Kotak Mahindra Bank – – 6.50% onwards
Punjab National Bank – – 6.60% onwards

Source: Official Websites

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Kotak Mahindra Bank becomes 1st scheduled private sector bank to collect direct, indirect taxes, BFSI News, ET BFSI

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Kotak Mahindra Bank Ltd (KMBL) has received approval from the government for collection of direct and indirect taxes, such as income tax, Goods and Services Tax (GST) etc, through its banking network.

With this, the bank becomes the first scheduled private sector bank to receive approval after the announcement by Finance Minister Nirmala Sitharaman allowing all banks to participate in government-related business.

After technical integration, KMBL customers will be able to pay their direct and indirect taxes straight from KMBL’s mobile banking or net banking platforms as well as through KMBL’s branch banking network, resulting in immense ease and convenience for customers, the bank said in a statement.

Kotak Mahindra Bank’s Joint Managing Director, Dipak Gupta said: “We are delighted to receive the necessary approvals permitting Kotak to collect direct and indirect taxes on behalf of the government, making tax payments more simple, convenient and efficient for our customers. We look forward to a long-standing relationship with the government, providing a wide range of services, backed by our strong technology platform, digital capabilities and customer-first approach.”



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Kotak Mahindra Bank gets nod to collect direct, indirect taxes, BFSI News, ET BFSI

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Mumbai, Kotak Mahindra Bank Ltd (KMBL) has received approval from the government for collection of direct and indirect taxes, such as income tax, Goods and Services Tax (GST) etc, through its banking network.

With this, the bank becomes the first scheduled private sector bank to receive approval after the announcement by Finance Minister Nirmala Sitharaman allowing all banks to participate in government-related business.

After technical integration, KMBL customers will be able to pay their direct and indirect taxes straight from KMBL’s mobile banking or net banking platforms as well as through KMBL’s branch banking network, resulting in immense ease and convenience for customers, the bank said in a statement.

Kotak Mahindra Bank’s Joint Managing Director, Dipak Gupta said: “We are delighted to receive the necessary approvals permitting Kotak to collect direct and indirect taxes on behalf of the government, making tax payments more simple, convenient and efficient for our customers. We look forward to a long-standing relationship with the government, providing a wide range of services, backed by our strong technology platform, digital capabilities and customer-first approach.”

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Top banks face up to Rs 800 crore hit on GST on FD insurance premiums, BFSI News, ET BFSI

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Major banks face increased costs of Rs 250 to Rs 800 crore on input tax credit on insurance paid to Deposit Insurance and Credit Guarantee Corporation (DICGC) by them on fixed deposits after the hike in insurance of deposits to Rs 5 lakh from Rs 1 lakh

The indirect tax department is questioning banks on the status of input tax credit (ITC) on the insurance paid to the DICGC.

All banks are required to insure this amount with the DICGC and pay a premium on that sum, for which an 18% GST rate is applicable.

Most banks consider GST as a cost and add it towards the available input tax credit.

Input tax credit

Input tax credit is GST paid on input services or raw materials that can be set off against a certain kind of future tax liability.

The indirect tax department is contesting the availability of input tax credit on insurance premiums.

Banks may have to shell out not only higher premiums and also incur higher tax costs due to credit disputes.

The indirect tax department claims the insurance premium paid by banks is not towards taxable output services and so they cannot input tax credit. As per the GST framework, banks can only avail half of the input tax credit available to them. The tax department claims the insurance premium is not towards the “core” function of banks.

Services free

Since most services provided by banks to fixed deposit holders are free, the tax credit cannot be used against any outgoing GST as well, it says.

SBI, Bank of Baroda, Punjab National Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IndusInd Bank are the major banks that may be affected.

Under the existing tax laws, there is an ongoing debate as to whether any cost that a company or a financial institution incurs due to a regulatory requirement should be considered crucial, and whether input tax credit hould be available on that.



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HSBC, Yes Bank join rate cut war; foreign lender to offer mortgage from 6.45%, BFSI News, ET BFSI

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Mumbai, HSBC on Friday reduced rates on its home loan products, offering mortgages at 6.45 per cent – one of the lowest in the industry – for balance transfers. For fresh loans, the British lender’s local branches will offer lending at 6.70 per cent, which is at par with sector leaders like SBI and HDFC.

Yes Bank also cut its rate to the same level in a review and is aiming for doubling the book size during the limited period offer.

Last month, private sector lender Kotak Mahindra Bank cut its interest rates to offer home loans from 6.50 per cent onwards, forcing others to also review their rates. Credit growth is at low levels amid a flush of liquidity which is leading to the rate cuts.

HSBC India said its rate has been reduced by 0.10 per cent to 6.45 per cent for balance transfers, wherein existing borrowers being served by rivals are enticed to switch the remaining loan amounts to a newer lender by aggressive offerings.

Home loans are generally considered safer bets because of the underlying security, and waning of COVID infections has also prompted healthy pick-up in home buys.

In a statement, the bank said it has also waived the processing fee for these loans and added that the rate offering will be applicable only till December 31.

“We believe this reduction in the home loans rates will help reduce the interest burden of customers and make homeownership more affordable,” its head of wealth and personal banking, Raghujit Narula said.

The bank currently offers home loans of up to Rs 30 crore to all customer at 6.70 per cent.

Meanwhile, private sector lender Yes Bank also announce a cut in its offering to 6.70 per cent, as per a statement, which also said salaried women will get credit at 6.65 per cent.

“Given our focus on further building the retail book, home loan is segment we are looking at expanding and envisage growing the book size by 2X over the next three months,” its chief executive and managing director Prashant Kumar said. PTI AA ANU ANU



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Home loans set for a big boost this festive season, BFSI News, ET BFSI

Personal Finance

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Home loans are set to get a boost this festive season as easing Covid curbs give buyers confidence and rates stay rock bottom due to ample liquidity

Buyers confident about the economy are set to cash in on low rates to buy homes.

Housing sales have jumped over two-fold during the July-September period at 62,800 units across seven major cities on better demand driven by low mortgage rates and hiring in IT/ITeS sector, according to property consultant Anarock.

Sales of residential properties stood at 29,520 units in the year-ago period and 24,560 units in the previous quarter.

Housing prices appreciated by 3 per cent across the seven cities to Rs 5,760 per square feet in Q3 of 2021 calendar year from Rs 5,600 per square feet in Q3, 2020.

The ongoing WFH (Work For Home) culture continues to influence residential sentiment on two major fronts – overall housing demand and unit sizes.

About 80 per cent of respondents to a survey by consultant JLL expected to make a purchase in the next three months.

Fierce competition

Competition among lenders in the home loan space is also set to boost home loans.

Kotak Mahindra Bank is offering home loans at a lower rate of 6.50 per cent is a festive period offer available only for two months till November 8, and the lowest offering is for those having the highest credit scores coming from the salaried segment.

In the past, its rivals which include HDFC and SBI, have responded to rate cuts by slashing their own offering. The rate cut comes at a time when demand for home loans is falling in the country and may spark similar offers from rivals.

Large banks like the State Bank of India already offer home loans at as low as 6.65 per cent and 6.75 per cent, respectively, while the interest rates for HFCs is between 7.45 per cent and 10 per cent.

Nirmal Bang Institutional Equities said in a note, “The demand momentum seen in housing loans last year has tapered off and organic growth for the housing finance industry has been softening,” the brokerage house said. The organic growth in the home loan segment for large banks has been slowing over the last 45-50 days.

Home loan AUM growth

Even as lenders jostle for home loan pie, the assets under management of the segment across banks and non-banks are likely to grow by 15% over the next three to five years, according to ICICI Securities.

This would be on the back of the rise in disbursements and improved affordability.

“Factors such as low interest rates, stamp duty cut, benign real estate prices, etc. have improved affordability to own a house. ‘Work from home’ has kindled incremental housing demand. Construction too was not adversely impacted during the second wave,” the brokerage said.

Home loan growth fell to 8% over the previous three financial years as compared to 17-18% earlier while disbursements fell to Rs 5.3-5.5 lakh crore due to the pandemic. However, it has now risen to a run-rate of Rs 7-8 lakh crore.



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Not one PSU bank in the top 5 lenders with lowest NPAs, BFSI News, ET BFSI

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Among Indian banks, HDFC Bank has stayed on top of the list of lenders with the lowest non-performing assets.

However, there is not a single public sector bank in the top five banks with the lowest NPAs.

HDFC Bank, which has reported more than 20 per cent YoY profit growth every quarter for over 40 quarters, has never crossed 0.5 per cent of loans in net non-performing assets. In its latest quarterly results, the bank’s net NPA ratio stood at 0.48%.

For retail loans, the bank relies on the model of wide franchise and low-cost deposit base, which ensures good pricing power and sustainability of above average net interest margins.

IndusInd Bank

The second number is held by IndusInd Bank. In its latest quarterly results, the bank’s gross non-performing assets (GNPAs) stood at 2.88 per cent as it was impacted by the second wave of Covid-19 while the net NPA ratio rose 15 basis points sequentially to 0.84 per cent.

The bank leads in certain retail asset classes with a pan India franchise which gives it strength to manage the asset quality in those segments.

ICICI Bank

The third bank on the list is ICICI Bank, which despite a rise in slippages, saw the net NPAs staying lower at 1.14 per cent as on March 31, 2021, against 1.54 per cent as on March 31, 2020. In its latest quarterly results, the bank reported a net NPA ratio of 1.16 per cent.

Federal Bank

The next on the list is Federal Bank that saw gross NPAs rise to 3.5 per cent and net NPAs increase marginally to 1.23 per cent largely due to the Covid-19 related challenges faced by borrowers in the latest quarterly results.

In fiscal 2021, Federal Bank exhibited a decline in NPAs due to diligent selection of borrowers, while its slippage ratio fell to 1.6%, lower than 1.7% in 2020.

Kotak Mahindra Bank

Kotak Mahindra Bank, the third largest Indian private sector bank by market capitalisation, has seen net NPAs consistently below 1.5 per cent. In its latest quarterly results, the bank’s asset quality weakened as gross NPAs stood at 3.56 per cent. However, net NPAs still came in below 1.5 per cent. The bank’s loan book has grown at a CAGR of over 25% over the past decade, which has been supported by a healthy contribution of low-cost deposits.



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HDFC, Axis Bank and Yes Bank lead as corporates return to offices from WFH, BFSI News, ET BFSI

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Financial organisations, including banks, fintech firms and NBFCs, are leading the return to offices from a long bout of work from home due to the pandemic.

HDFC, Axis Bank and Yes Bank are among the top corporates getting ready to reopen their offices as Covid wave ebbs amid the rise in vaccinations.

While some of the corporates have started operations at pre-Covid levels, others are seeking to get more employees to office.

What banks are doing

In line with the directives issued by governments, HDFC has 100% manpower at offices, while expectant mothers, female employees with children below 1 year of age, employees above 65 years of age, employees with co-morbidities and employees coming from any containment zones as defined by the authorities continue to work from home.

Kotak Mahindra Bank expects that 90% of the employees, who are fully vaccinated, will be back to office by November/December.

In branches and other customer-facing roles, it is close to reaching 100% levels.

At Yes Bank, around 40% of employees at our corporate office and other large offices work in hybrid models. The bank has a ‘Work from Anywhere policy’ in place to enable identified employees to work from alternative locations, in addition to working from their designated workplace.

Global scenario

A recent poll of leading U.S. and European banks found that while there would be a sharp decline in employees working five days a week in the office, the largest group still wants to work there four days. This data turns the consensus on its head, since bank managers are planning for more remote working than employees are demanding.

This view emerged this summer from an Infosys poll of 520 managers and employees at top U.S. and European banks. Seventy-one percent said they worked five days a week from the office pre-pandemic. Now, just 27% say they want that same schedule post-pandemic, although few want to be fully remote.

The largest group of bank employees (36%) say they want to work only one day remotely and the rest in the office. But fewer than half of managers (15%) anticipate that employees will seek this schedule. Also, managers consistently overestimated the number of workers who want to be in the office from one to three days a week.

As early as last September, JPMorgan CEO Jamie Dimon required traders to come back into the office, saying that remote working has slowed decision-making, hampered apprenticeships and reduced spontaneous learning and creativity. Goldman Sachs CEO David Solomon called remote working an aberration that was “not a new normal.”



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HDFC, Axis Bank and Yes Bank lead as corporates return to offices from WFH, BFSI News, ET BFSI

Personal Finance

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Financial organisations, including banks, fintech firms and NBFCs, are leading the return to offices from a long bout of work from home due to the pandemic.

HDFC, Axis Bank and Yes Bank are among the top corporates getting ready to reopen their offices as Covid wave ebbs amid the rise in vaccinations.

While some of the corporates have started operations at pre-Covid levels, others are seeking to get more employees to office.

What banks are doing

In line with the directives issued by governments, HDFC has 100% manpower at offices, while expectant mothers, female employees with children below 1 year of age, employees above 65 years of age, employees with co-morbidities and employees coming from any containment zones as defined by the authorities continue to work from home.

Kotak Mahindra Bank expects that 90% of the employees, who are fully vaccinated, will be back to office by November/December.

In branches and other customer-facing roles, it is close to reaching 100% levels.

At Yes Bank, around 40% of employees at our corporate office and other large offices work in hybrid models. The bank has a ‘Work from Anywhere policy’ in place to enable identified employees to work from alternative locations, in addition to working from their designated workplace.

Global scenario

A recent poll of leading U.S. and European banks found that while there would be a sharp decline in employees working five days a week in the office, the largest group still wants to work there four days. This data turns the consensus on its head, since bank managers are planning for more remote working than employees are demanding.

This view emerged this summer from an Infosys poll of 520 managers and employees at top U.S. and European banks. Seventy-one percent said they worked five days a week from the office pre-pandemic. Now, just 27% say they want that same schedule post-pandemic, although few want to be fully remote.

The largest group of bank employees (36%) say they want to work only one day remotely and the rest in the office. But fewer than half of managers (15%) anticipate that employees will seek this schedule. Also, managers consistently overestimated the number of workers who want to be in the office from one to three days a week.

As early as last September, JPMorgan CEO Jamie Dimon required traders to come back into the office, saying that remote working has slowed decision-making, hampered apprenticeships and reduced spontaneous learning and creativity. Goldman Sachs CEO David Solomon called remote working an aberration that was “not a new normal.”



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Uday Kotak’s tenure at IL&FS helm extended by six months

Banking & Finance

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CS Rajan, managing director of IL& FS, hailed the move and said under Kotak’s continued leadership, IL&FS will accomplish the resolution targets.

The government has extended the term of Kotak Mahindra Bank managing director Uday Kotak as the non-executive chairman of the IL&FS group by six months through April 2, 2022.

In a gazette notification, the Department of Financial Services said: “…whereas the Central government, on the recommendations of the Reserve Bank of India, has considered it necessary to grant said exemption to Kotak Mahindra Bank Limited for a further period of six months with effect from the 3rd day of October, 2021.”

According to the Banking Regulation Act, a bank cannot be managed by any person who is a director of any other company. He can be granted a temporary exception for three months or nine months with the approval of the RBI.

The Centre had appointed Kotak as the head of the lender’s board in 2018 to help the debt-laden firm come out of stress, after the government took over the board. He was initially allowed to be at the helm of IL&FS for three months, which was extended by nine months. Subsequently, he got two extensions of one year each.

CS Rajan, managing director of IL& FS, hailed the move and said under Kotak’s continued leadership, IL&FS will accomplish the resolution targets.

In fact, following the Evergrande crisis in China, Kotak had tweeted on September 21 that the trouble at the property developer seems like China’s Lehman moment and reminds him of IL&FS.

He tweeted: “Indian Government acted swiftly. Provided calm to financial markets. The Government appointed board estimates 61% recovery at IL&FS.”

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