Kotak Mahindra Bank's profit-before-tax (PBT) for FY25 will be impacted by ₹300 crore to ₹450 crore in the wake of Reserve Bank of India's (RBI) recent regulatory action against the Mumbai-based lender, according to a top Kotak Mahindra official.
Ashok Vaswani, MD and CEO, Kotak Mahindra, asserted this in a post-earnings analyst conference call on Saturday, Moneycontrol reported.
“We remain fully focused to mitigate the current challenges imposed on our digital lending business. Our focus for the fiscal year will be to deepen existing customer relations through cross-selling, instead of new acquisitions,” Vaswani was quoted as saying.
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He also emphasised that the financial impact of the RBI's action on the private lender's business was “minimum,” as the central bank had only banned onboarding of new customers by Kotak Mahindra, while allowing existing customers to continue to take loans or make new deposits.
“Also, the onboarding of new customers is not entirely online, as there are physical processes that involve assisted journeys, which would not be impacted,” the MD and CEO added.
{{/usCountry}}“Also, the onboarding of new customers is not entirely online, as there are physical processes that involve assisted journeys, which would not be impacted,” the MD and CEO added.
{{/usCountry}}The effect of RBI's order was such that on April 25, a day after the sanctions were announced, Kotak Mahindra's shares crashed as much as 12% on the Bombay Stock Exchange (BSE). Brokerages, too, slashed target prices, viewing the development as “structurally negative” for the financial services provider.
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Meanwhile, in the conference all, Vaswani also addressed the exit of KVS Manian, the bank's now-former Joint MD who stepped down on April 30, with his resignation being effective immediately.
“To the best of my knowledge, Manian doesn't have anything in his hand right now. Obviously, you'll have to ask him that question, but I'm not aware of anything like that,” Vaswani said.
“Manian wanted to pursue other opportunities in the financial sector... the timing made things a little difficult,” he further stated.