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India's Best Banks: Decisive Banking

The journey of Kotak Mahindra Bank is the journey of India’s financial sector reform

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In the early 1980s, while India was still a closed economy and economic growth was muted, Uday Kotak decided to start out on his own, refusing a lucrative job option from a multinational. In 1985, he established what became an Indian financial services conglomerate and over the next few years, he diversified his business into various areas of financial services, establishing a prominent presence in bills discounting, stockbroking, investment banking, car finance, life insurance and mutual funds.

In February 2003, Kotak Mahindra Finance (KMFL), the group’s flagship company, received a banking licence from the Reserve Bank of India (RBI). With this, KMFL became the first non-banking finance company in India to be converted into a bank — Kotak Mahindra Bank. Today, the Mumbai-headquartered bank is one of the fastest-growing banks and among the most admired financial institutions in India. It offers a wide range of banking products and financial services for corporate and retail customers through a variety of delivery channels and specialised subsidiaries in the areas of personal finance, investment banking, general insurance, life insurance, and wealth management.

As on April 2019, it is the second largest Indian private sector bank by market capitalisation. Talking to BW Businessworld exclusively, Uday Kotak, stated, “In many ways, the journey of Kotak Mahindra Bank is the journey of India’s financial sector reform. I still remember we started in 1985 when the journey of the reform process in India was in its nascent stages.

Over the last 33 years, India has made significant progress in the financial sector. Kotak Mahindra Bank’s journey demonstrates reforms in this sector and how the process of reform has given opportunities for the creation of institutions and thousands of jobs.”

Anand Mahindra, Chairman, Mahindra Group, who has a minority stake in Kotak Mahindra Bank informs “The journey with Uday has been one of the most enjoyable and rewarding in my professional career. While I was at Mahindra Ugine, I was thinking about getting our Group to incubate a Leasing company since the government had opened up that field for private investment for the first time. However, what I saw in Uday was an individual with enormous energy, drive and competence .”

In 2015, Kotak Bank acquired ING Vysya Bank in a deal valued at Rs. 15,000 crore (US$2.2 billion). With the merger, total employment jumped to almost 40,000, and the count of branches reached 1261. After the merger, ING Group, which controlled ING Vysya Bank, owned a 7 per cent share in Kotak Mahindra Bank.


The banking sector is in the midst of one of the most significant challenges in financial sector as the next few months will be crucial in how the sector shapes up.  Apart from the broader challenges arising from manufacturing and other sectors impacting the financial sector and vice versa, digital revolution is transforming banking in India and globally. For companies like Kotak Mahindra, the focus on risk management would be very crucial tional connect.

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