Kotak Mahindra Bank (KMB), a private sector bank, is now on a “wait and watch” mode and not looking to change strategy for its consumer banking business next fiscal despite the ongoing Russia-Ukraine conflict posing exogenous shocks like global oil price surge on the Indian economy, Shanti Ekambaram, Group President-Consumer Banking Business, has said.

“We are not looking at anything differently right now. We are growing in our trajectory …unless we see any worsening in the environment. We still have a large market. We are still small from a market perspective. What we have to see is if risk changes (due to the war situation).. Risk is now stable post-Covid and things have gotten better in the last nine months. 

“We will wait and watch to see what it does and if economic growth comes down. Right now there is no change in strategy and we will wait and watch and modulate as things move,” Ekambaram told BusinessLine here.

Inflation scare

On the likely inflation scare due to the recent global oil price spike, Ekambaram, who is part of KMB’s Executive Board, expressed confidence that both fiscal and monetary policy (the government and RBI) would work to see if they can buffer the economy from the impact of high inflation. 

“If there is no capacity (to absorb) and they transmit interest rate hikes, banks also will transmit it to customers. You will then see demand impact. Banks have to do business in both low interest and high interest rate scenarios. Banks have done well in high interest rate periods,” she added.

“Policy will try to buffer the impact of inflation and if they have to pass through, it will pass through entire system. The only thing we have to see is what will it do to economic growth and demand.”

Ekambaram said that in the next fiscal, KMB will go with same kind of strategy, deeper execution, wider footprint and deepening of customer engagement. “Environment is important and environment has been stable. We don’t know what will happen in terms of consequences of war. In the current stable environment, we would continue to push our existing strategy,” she said.

Meri Udaan

Ekambaram was in the National Capital Region (NCR) on the eve of International Women’s Day to launch a specially commissioned sculpture — Meri Udaan— to honour the indomitable spirit of the Aatmanirbhar Indian women. KMB runs Kotak Silk, an unique banking programme designed exclusively to partner Indian women in their journey towards financial independence.

Asked about KMB’s strategy for next fiscal as regards its consumer banking business, Ekambaranathar said “Our strategy doesn’t change, but execution does. Our strategy is to continue to grow our customer acquisition base both physically and digitally as we have been doing in the last one and half years where we have been seeing rapid customer acquisition.”

While home loans are expected to continue as primary growth driver for KMB’s Consumer banking business, she highlighted that the bank would continue to focus on business banking (MSME) and unsecured retail products like credit cards and personal loans in equal measure.

“Home loan has been our flagship and this has helped us gain market share in last 18 months. It will continue to be a focus area for us as home loan customer is engaged and sticky customer. 

“The other business are unsecured products where we have laid the railroads and we have seen steady growth. We will also deepen and widen our footprint so that we serve the business banking customer well,” she said.

Asked about the impending transaction of Citi India’s retail business sale and KMB’s interest on the same, she declined to comment on the issue as the transaction has not been completed. “It’s a good business. You will have to wait for the transaction to happen because it is under closure and nothing has been announced,” Ekambaram said.

In the recent years, KMB has been focused on acquiring customers through all acquiring engines. Traditionally, its model was acquiring customers through savings account. “Today, we are acquiring customers through home loan, personal loans, credit cards and investments. All gates for customer acquisition have been opened. Acquire customers, engage with them and cross sell products,” she said.