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Kotak Mahindra Bank forays into healthcare lending; not to use RBI’s liquidity window, BFSI News, ET BFSI

September 22, 2021 root Banking & Finance

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Kotak Mahindra Bank on Tuesday announced its foray into the healthcare lending space, where it will be taking exposures of up to Rs 15 crore apiece. The private sector lender, however, will not be seeking funds from the Reserve Bank’s on-tap liquidity scheme for the sector, as its cost of funds is very low, its President and Head of Business Banking Assets, Sunil Daga, said.

In May this year, the RBI had announced an on-tap liquidity window of Rs 50,000 crore for on-lending by banks to the healthcare sector, where they can take exposures of up to three years and access funding at the repo rate.

Daga said the bank’s cost of funds is “very competitive” and hence, it will not be accessing the RBI window. Even without the central bank’s special window, the business is exciting, he added.

Till now, Kotak Mahindra Bank had been providing funds to the healthcare sector but now it has a focused offering, Daga said, adding that the business will be part of its consumer segment.

Daga declined to specify the size of its current healthcare book, but added that it was miniscule. Now, the bank has created a dedicated pan-India team to cater to this business.

It will take exposures ranging from healthcare-related loans for an individual, to long-term project lending for doctors building healthcare infrastructure, he said, adding that single exposure can go up to Rs 15 crore.

The bank is targeting to start with signing up 100 customers a month and will be aiming to take it up to 500 a month, Daga said.

The loans will be both secured as well as unsecured, and also include a quick approval for exposures up to Rs 50 lakh, the bank said in a statement.

The loan tenure will be between 12 to 84 months, while the loan to value ratio can go up to 85 per cent, as per its website.

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Kotak Mahindra Bank inks MoU with National Small Industries Corporation to offer loans to MSMEs, BFSI News, ET BFSI

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Kotak Mahindra Bank announced that it has entered into a Memorandum of Understanding (MoU) with the National Small Industries Corporation (NSIC), a Government of India enterprise, to facilitate credit to Micro, Small and Medium Enterprises (MSMEs). Under the tie-up, MSME units registered with NSIC can now avail business loans and working capital finance tailored to suit the specific needs of each business at attractive interest rates.

This further would initiate digital submission of loan-related documents, quick loan sanctions, and access to KMBL’s full range of cash management services that will help MSMEs in the efficient utilisation of cash. Providing a wide range of business loans and working capital solutions at attractive interest rates with a Seamless documentation journey and quick loan sanction process. This collaboration will further facilities such as online/mobile banking, cash management services, e-tax, and KMBL’s Forex Live platform to book foreign currency.

Sunil Daga, President & Head – Business Loans and Working Capital Solutions, Kotak Mahindra Bank said, “The MSME sector is critical for the revival and growth of the Indian economy. Through this tie-up with NSIC, we want to partner small businesses across the country by providing a range of attractive financing options, customised to meet the requirements of small business owners and backed by digital-first solutions. This will help them tide over the current crisis and contribute to their growth going forward.”

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