In response to the Reserve Bank of India’s restrictions, Kotak Mahindra Bank plans to accelerate its branch expansion efforts, aiming to add between 175 to 200 new branches in the fiscal year 2024-25.
This strategic move comes after the RBI prohibited the bank from digitally acquiring new customers and issuing new credit cards due to IT-related deficiencies earlier in April.
“We have been adding roughly 150 odd branches for several years now. This year too, the momentum is going to continue,” Virat Diwanji, group president and head – consumer bank, told on Monday.
Following the RBI’s restrictions on digital customer acquisition, Kotak Mahindra Bank intends to focus on areas with ample deposit availability by expanding its branch network. Previously, the bank heavily relied on digital channels for client acquisition.
For instance, a significant majority of new personal loans and credit cards were issued digitally in recent quarters.
Despite the immediate limitations in sourcing new customers, the bank’s strategy to increase its branch presence is seen as a medium-to-long-term advantage by Kranthi Baithini, director of equity strategy at WealthMills Securities.
He noted that while this expansion could enhance reach over time, it may also lead to higher overhead costs for the bank.
Kotak Mahindra Bank is about to expand it’s branches by next year
Kotak Mahindra Bank is actively addressing the RBI’s requirements to resume normal operations, focusing on bolstering its IT systems and digital payment security measures.
According to Diwanji, the bank has significantly invested in these areas to meet stringent regulatory cybersecurity standards.
Over the past year, Kotak has recruited more than 530 employees, predominantly with technical expertise, reflecting its commitment to strengthening its technological capabilities.
Despite recent challenges, Diwanji affirmed that the bank remains committed to its core lending activities, maintaining its focus on personal and business loans going forward.
