India is adding close to USD 300 bn to the GDP every year, a feat achieved by only three nations! GDP growth of over 7% for two consecutive years is fuelling the investment cycle, backed by domestic demand amid moderating inflation, shared Amit Mohan, President, Logistics & Infrastructure, Kotak Mahindra Bank and Director, Kotak Mahindra Prime in an exclusive interaction with Srajan Agarwal of Elets News Network (ENN).
With India set to double its infrastructure spending to about Rs 143 lakh crore by 2030, how does Kotak Mahindra Bank plan to align its financial products and services to support this tremendous growth? What strategies are in place
to capitalise on this opportunity while managing risks effectively?
At Kotak Mahindra Bank, we welcome the strategic initiatives taken by the finance minister in the interim budget and we are well-placed to participate in the initiatives. The 11% increase in infrastructure capex in the interim budgets outlines the commitment on the part of the Government. Kotak Bank has been quite active in assessing the market dynamics and is focused on the Infrastructure segment. The bank offers flexible funding options, that fit to the needs of diverse customer segments. Kotak Bank is providing construction equipment loans and working capital to MSMEs and large corporates.
The bank’s established business model and robust policy and process adherence have proven its prudence even in the toughest of market conditions in the past.
Given the increase in India’s capital expenditure from 1.7% of GDP in 2014 to 2.9% in 2022-23, how is Kotak Mahindra Bank adapting its financial offerings to cater to the evolving needs of the infrastructure sector? How significant is this shift in capital expenditure for the bank’s portfolio management and investment strategies?
Kotak Mahindra Bank Ltd. (KMBL) has deepened its presence and caters to all the segments of the market. Bank continues to invest in geographical reach in semi-urban and Rural markets in order to reach the retail customers at the bottom of the pyramid.
How is technology transforming Kotak Mahindra Bank’s approach to financing used commercial vehicles? Can you elaborate on the specific technologies being leveraged for data analytics and risk assessment?
KMBL is focusing on the end-to-end digital journey to reduce the turnaround time. UCV customers are “mobile first” customers and hence bringing the entire journey through mobile phones can be a game changer. On the risk assessment front, banks are making the best use of data to build rule-based decision-making and predictive data models to reduce the risk of default & fraud. The transition to the state-of-the- art LMS platform is also helping in scaling up.
How is Kotak Mahindra Bank addressing the increasing focus on sustainable and environmentally friendly infrastructure projects? Are there specific green finance products or initiatives the bank has introduced or plans to introduce?
KMBL is focused on funding customers working in sustainable and environmentally friendly projects like waste management, solar/windmill projects, etc, and will continue its focus in upcoming years. We are also financing customers under Namami Gange and Sewage Treatment Plant (STP) projects.
Forecasting Future Trends in Infrastructure Financing: Based on current market trends and governmental policies, what are Kotak Mahindra Bank’s predictions for the future of infrastructure financing in India? How is the bank preparing to adapt to these anticipated changes?
KMBL is quite bullish on the infrastructure financing segment and strongly believes that infra investments will play a crucial role in achieving the USD 5 Trillion economy goal. India is adding close to USD 300 bn to the GDP every year, a feat achieved by only three nations! GDP growth of over 7% for two consecutive years is fuelling the investment cycle, backed by domestic demand amid moderating inflation. The Government’s adherence to the fiscal consolidation target is worth applauding. The tax collections as a percentage of GDP are expected to be multiple decades high and this will give enough headroom to the Government for investment in physical, digital, and social Infra spending. The financing segment will become more competitive in the coming years and the bank is prepared to be a consistent player in this segment.
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