Kotak neobank operates as a fintech services organization with headquarters in Mumbai, India. The bank delivers finance and banking solutions to business and retail customers through personal finance services, wealth management, plus insurance and investment banking. 

History

Uday Kotak launched Kotak Capital Management Finance Limited in 1985, starting from 30,000 rupees, which he borrowed from his family members and friends. In 1986, Anand Mahindra and his father Harish Mahindra invested ₹1 lakh into Kotak Mahindra Finance when they changed its name. The company started as a bill discounting business with leasing and hire purchase services. During the 1990s, the company extended into car financing and investment banking, plus opened new offices overseas. In 1996 Ford Credit International and Kotak Mahindra Finance united to form Kotak Mahindra Primus as a car financing company.  During 1996, Kotak Mahindra Finance split its investment banking operations and created Kotak Mahindra Capital together with Goldman Sachs.

The company Kotak Mahindra Finance launched its first mutual fund branch named Kotak Mahindra AMC in 1998. OM Kotak Mahindra Life Insurance launched in 2001 through a 74:26 joint venture between Kotak Mahindra Finance and Old Mutual.

A Kotak Mahindra Bank ATM

The Reserve Bank of India issued a banking license to Kotak Mahindra Finance in February 2003, making it the first non-banking finance company to transition to a banking institution in India. The company was renamed as Kotak Mahindra Bank after receiving its banking license from the Reserve Bank of India. The company shares were split 56% to Uday Kotak and 5% to Anand Mahindra at the time.

During 2005 Kotak Mahindra Bank bought all remaining shares of Ford Credit in Kotak Mahindra Primus to become its sole owner. Following the acquisition, Kotak Mahindra Prime became known as Kotak Mahindra Prime. During 2006 Kotak Mahindra Bank purchased Goldman Sachs’ entire 50% ownership of both Kotak Mahindra Capital and Kotak Securities for ₹333 crore (US$73.5 million). These two businesses became exclusively owned subsidiaries of the group. In 2014 Kotak Mahindra Bank invested ₹459 crore (US$75.21 million) to take a 15% stake in Multi Commodity Exchange (MCX) from Financial Technologies Group, making the company its largest shareholder.

Merger

During 2014 Kotak Mahindra Bank bought ING Vysya Bank through a transaction worth ₹15,000 crore (US$2.34 billion). The 2015 merger between Kotak Mahindra Bank and ING Vysya Bank resulted in a workforce of almost 40,000 people and 1,261 branches. The new holding company ING Group gained 6.5% share ownership in Kotak Mahindra Bank through its control of ING Vysya Bank.

Kotak Mahindra General Insurance opened for business in 2015 following approval from IRDAI as a wholly-owned subsidiary of Kotak Mahindra Bank.  Bharti Airtel and Kotak Mahindra Bank formed Airtel Payments Bank in 2016 through an 80:20 joint venture.

During 2016 Kotak Mahindra Bank bought BSS Microfinance for an investment amount of ₹139.2 crore, which equals US$20.72 million.

By launching Kotak 811 savings accounts in March 2017, Kotak Mahindra Bank doubled its number of customers by September 2018.

In April 2017 Kotak Mahindra Bank purchased all remaining shares of Kotak Mahindra Old Mutual Life Insurance from Old Mutual for 1,292 crore rupees.

During 2021 Kotak Mahindra Bank sold its Airtel Payments Bank investment to Bharti Enterprises for ₹295 crore, which is US$39.81 million. Kotak Mahindra Group bought DLL India’s agricultural and medical equipment financing portfolio during the year 2022.

Kotak Mahindra Bank acquired Sonata Finance as a microfinance business in 2023 through a deal worth ₹537 crore.

In February 2024,, Zurich Insurance Group announced plans to buy 70% of Kotak Mahindra General Insurance for 5,560 crore (US$640 million).

Philanthropy

In 2020 Kotak committed to give 50 crore rupees to PM CARES Fund to help India fight against the COVID-19 pandemic.

Controversies

During April 2024, the Reserve Bank of India stopped Kotak Mahindra Bank from adding new customers to its digital channels and preventing it from giving out new credit cards. Existing customers were not affected. The RBI took action against Kotak Mahindra Bank because its IT platforms failed to meet proper standards.

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