The Hindu Business Line : Kotak Mahindra bets on investment advice package

WHILE commercial banks look at expanding their network to establish their presence in potential pockets, Kotak Mahindra Bank is extending its reach to offer personalised investment advice to its customers.

"We are not looking at mere banking services alone. Our basic proposition is to go with investment advice and the branch network would serve as distribution points," Mr Uday S. Kotak, Vice Chairman and Managing Director of the bank, said.

The Kotak Group, incidentally, is into offering the complete suite of financial solutions from retail finance, stock broking, mutual funds, life insurance to investment banking. The bank integrates all financial solutions offered by its subsidiaries under a single roof. It is now exploring the possibility of synergising the suite of products and services into a single brand.

Speaking to Business Line after inaugurating the 25th branch of the bank, Mr Uday Kotak said: "technically we have 45 branches, including the asset management branches." The bank has chalked a road map for stretching its reach to 80 to 100 branches over the next five years and the focus would be on tapping the potential in metros and mini-metros.

To a query regarding the size of the bank, he said, our concept is in building relationships, strengthening values over a long-term rather than expanding in size."

When asked how he proposed to take the investment advice strategy forward, Mr Kotak said, "through interaction, dealing and experience." He went on to explain that the average Indian was much too thrifty. "He invests his savings in Government bonds or bank deposits. Due to falling interest rates, he has realised that such savings are not earning enough for him. Our philosophy is that the bank is also a point of advice and, through its network, can offer advisory services."

(An RBI Study indicates that less than 34 per cent of the people actually understood mutual funds and less than 32 per cent understood shares.)

To deal with such issues, the bank is scouting for people who can take on such tasks.

While ruling out the Group's foray into the non-life insurance space, he said, the bank recently introduced the Kotak Premium Return Plan exclusively for its customers.