RBI Rate Cuts and Their Impact on FD Rates

After 35 years abroad at Citibank and Barclays, Ashok Vaswani, now MD & CEO of Kotak Mahindra Bank, shares insights on the current financial landscape. Despite recent RBI rate cuts, Vaswani notes that deposit rates have remained stable, with most banks absorbing the initial 25-basis-point cut. However, he anticipates changes if total cuts reach 50-75 basis points, affecting term deposit pricing in the coming months.

The Challenge of Deposits and Private Investment

Vaswani discusses the ongoing challenge of securing deposits at competitive prices, emphasizing innovation and digital expansion through platforms like 811. On private investment, he observes a muted response, attributing it to global uncertainties and potential opportunities arising from disruptions like US tariff threats.

Customer Service and Bank Growth

Addressing the balance between enhancing customer service and positioning Kotak among the top three valuable banks, Vaswani asserts there's no trade-off. His focus is on building a sustainable franchise, with customer satisfaction metrics showing positive trends through reduced complaints and enhanced services.

Future Strategies

With RBI lifting restrictions on digital and credit card acquisitions, Kotak aims to not only return to previous customer onboarding levels but exceed them. Vaswani also outlines a cautious yet aggressive approach to unsecured lending and consumer loans, targeting growth in specific sectors while exploring inorganic opportunities in asset management and insurance.