S&P upgrades Kotak Mahindra Bank to ‘BBB’ after RBI lifts curbs
The Hindu
S&P Global upgrades Kotak Mahindra Bank's credit rating to 'BBB' after RBI lifts operational curbs, positioning bank for growth.
S&P Global upgraded Kotak Mahindra Bank’s credit rating to ‘BBB’ from ‘BBB-’ on Friday (February 21, 2025) after the Reserve Bank of India (RBI) recently lifted operational curbs.
“We believe Kotak Mahindra Bank is well positioned for growth over the next 24 months. This is after India’s central bank lifted restrictions on the bank onboarding new customers or issuing fresh credit cards.
“We have therefore removed the negative comparable rating analysis adjustment under our comparative rating analysis on the private sector bank. This leads to a higher SACP assessment of ‘BBB’, from ‘BBB-’ earlier,” said the rating agency in a statement.
The Kotak Mahindra Bank controversy | Explained
The banking regulator had directed Kotak Mahindra to stop digital customer onboarding and cease credit card issuance in April 2024. Following this the bank took corrective action and submitted compliance reports to the RBI. The central bank then lifted the curbs on February 12.
“Kotak Mahindra Bank’s funding profile will continue to remain healthy, in our view. The resumption of digital onboarding will help the bank to ramp up low-cost digital deposits, improve granularity of deposits, and enhance its deposit franchise.
Kotak Mahindra Bank continues to have one of the highest current and savings account (CASA) deposit ratios in the industry. CASA deposits accounted for 42.3% of the bank’s total deposits as of Dec. 31, 2024” S&P said.
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