The Competition Commission of India (CCI) on Tuesday approved Kotak Mahindra Bank Ltd’s acquisition of Standard Chartered Bank, India Branch’s standard unsecured personal loan portfolio. In October, Kotak Mahindra Bank Limited announced that it had entered into an agreement to acquire the personal loan book of Standard Chartered Bank, India.
Effective September 30, 2024, the proposed transaction involves total outstanding debt of approximately Rs 4,100 crore (~$490 million). These loans are classified as “Standard Loans” as per the guidelines provided by the Reserve Bank of India (RBI).
The transaction is expected to be finalized within the next three months, subject to receipt of regulatory approvals, satisfaction of other required conditions, and approval or waiver of customary closing requirements. KMBL is set to take over the loan portfolio, which will still be outstanding by the time of completion.
“This acquisition is in line with KMBL’s strategy to shift scale and focus on customer-centric growth. Standard Chartered Bank’s high-quality loan book allows KMBL to build on its strength in the affluent customer segment and retail further strengthens its leadership in the lending space,” the company said in its official release.
This is the second significant transaction between a private sector bank and a foreign bank in the most recent years. In 2022, Axis Bank, the third largest private lender in India, successfully acquired the consumer and wealth management business of Citi India.
The recent acquisition of Kotak Mahindra Bank under the leadership of Ashok Vaswani is an important milestone. As Managing Director and Chief Executive Officer from early 2024, Vaswani has overseen the bank’s strategy to scale up its operations and emphasize customer-centric growth. This acquisition is a reflection of the bank’s larger objectives and strategic direction.
As of June 30, consumer loans comprised 45% of KMBL’s total loan book, at Rs 1.83 lakh crore. Of these, personal loans, unsecured business loans (for non-personal use), and consumer durables loans totaled Rs 20,317 crore, showing a year-on-year growth of 1%.
