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In August, Kotak Mahindra Bank (KMB) held an internal review meeting at its headquarters in India’s financial capital, Mumbai. The meeting began with a presentation by managing director and chief executive Uday Kotak’s son, Jay Kotak, on Kotak811—the bank’s digital avatar. The message was clear: the unit envisioned as a customer-acquisition tool had now taken centre stage at the bank.

The bank’s annual report for the year ended March 2022 refers to Kotak811, which started in March 2017 as a small team meant to pitch zero-balance savings accounts and cross-sell products to customers, as a semi-autonomous unit focused on exponential growth. The unit now has a separate website that describes it as a “completely digital, in-your-phone, mobile bank”.

But KMB has even bigger plans for the neobank. “Uday Kotak spoke about the Reserve Bank of India’s (RBI’s) plans to sanction digital-banking licenses in 2023. It gave us a peek into the bank’s plans for Kotak811,” said a former employee who didn’t want to comment on his erstwhile employer publicly.

These lofty dreams are a natural consequence of Kotak811 hitting its stride in the fifth year of its operations. In the quarter ended March 2022, the neobank incubated within KMB opened five accounts for every 10 by HDFC Bank. It also issued four credit cards against every 10 by the country’s largest private bank.

Not just banks, Kotak811 is also taking aim at India’s fintechs. It disbursed nearly three-quarters of loans by value as Paytm*.

While over a dozen neobanks or digital-bank intermediaries digital-bank intermediaries The Ken The RBI and BFO check out neobanks 👀 Read more such as Fi Money, Jupiter, Open, and Razorpay operate in India in partnership with traditional banks, the concept of digital-only banks is still taking shape. A digital bank offers the full suite of services online without any physical branches.

In July, government think-tank Niti Aayog pitched for pitched for Niti Aayog Digital Banks: A Proposal for Licensing & Regulatory Regime for India Read more full-stack digital banks in its report that offered a roadmap for licensing and regulatory regimes for digital banks in the country. If the banking regulator were to allow digital banks, Kotak811 could be one of the foremost contenders to apply for the license.

Earlier in an investor meeting on 24 May at the Sofitel hotel in Mumbai’s Bandra-Kurla Complex (BKC) also, Uday Kotak handed over the baton to Jay for showcasing the surprisingly good figures Kotak811 had clocked in the year ended March 2022. This was when Jay had first compared the neobank with India’s largest private-sector bank and the largest listed fintech. Before this, Kotak811 was largely an acquisition engine.

AUTHOR

Rounak Kumar Gunjan

Starting out as a business journalist in 2016, Rounak has written about energy, politics, social justice and financial services. He has worked with BQ Prime, CNN-News18, Outlook Money and NewsCorp VCCircle.

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