S&P upgrades Kotak Mahindra Financial institution to ‘BBB’ after RBI lifts curbs

Representational picture of Kotak Mahindra Financial institution department in New Delhi
| Picture Credit score: Reuters

S&P World upgraded Kotak Mahindra Financial institution’s credit standing to ‘BBB’ from ‘BBB-’ on Friday (February 21, 2025) after the Reserve Financial institution of India (RBI) just lately lifted operational curbs.

“We imagine Kotak Mahindra Financial institution is properly positioned for progress over the following 24 months. That is after India’s central financial institution lifted restrictions on the financial institution onboarding new prospects or issuing recent bank cards.

“We’ve subsequently eliminated the destructive comparable ranking evaluation adjustment below our comparative ranking evaluation on the non-public sector financial institution. This results in a better SACP evaluation of ‘BBB’, from ‘BBB-’ earlier,” mentioned the ranking company in an announcement.

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The banking regulator had directed Kotak Mahindra to cease digital buyer onboarding and stop bank card issuance in April 2024. Following this the financial institution took corrective motion and submitted compliance studies to the RBI. The central financial institution then lifted the curbs on February 12.

“Kotak Mahindra Financial institution’s funding profile will proceed to stay wholesome, in our view. The resumption of digital onboarding will assist the financial institution to ramp up low-cost digital deposits, enhance granularity of deposits, and improve its deposit franchise.

Kotak Mahindra Financial institution continues to have one of many highest present and financial savings account (CASA) deposit ratios within the business. CASA deposits accounted for 42.3% of the financial institution’s whole deposits as of Dec. 31, 2024” S&P mentioned.