| Kotak Mahindra Bank Limited | ||||||
| Ratings reaffirmed at 'Crisil AAA/Stable/Crisil A1+'; Rated amount enhanced for Certificate of Deposits | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil AAA/Stable/Crisil A1+' ratings on the debt instruments of Kotak Mahindra Bank Limited (KMBL; part of the Kotak Group).
The ratings continue to reflect the Kotak Group’s strong capitalisation, healthy asset quality and comfortable earnings.
The Kotak Group continues to maintain its strong capital position. Absolute networth stood at Rs 175,251 crore at the Group level and Rs 130,566 crore at the Bank level. CET-1 ratio and overall capital adequacy ratios of the Bank were healthy at 21.5% and 22.6% respectively as on December 31, 2025.
As on December 31, 2025, the Bank’s advances stood at Rs 480,673 crore reflecting annualised growth of 16.8% and corresponding gross Non Performing Assets (NPA) and net NNPA stood at 1.3% and 0.3% respectively, while the same stood at 1.3% and 0.4% at the Group level.
The Bank reported Rs 9,981 crore profit after tax with RoA of 1.9% while the Group reported Rs 13,865 crore profit after tax with healthy RoA of 2% for the nine months of fiscal 2026.
On March 21, 2026, Kotak Mahindra Capital Company Limited (“KMCC”), a wholly-owned subsidiary of KMBL, entered into definitive agreements to divest 30.99% of its shareholding in Infina Finance Private Limited (Infina), an associate company of KMBL, for an aggregate consideration of around Rs. 1,294 crore. The transaction was completed on March 24, 2026, resulting in KMCC's stake in Infina decreasing from 49.99% to 19.00%. Consequently, Infina ceases to be an associate company of KMBL.
On March 24, 2026, in compliance with the provisions of the Reserve Bank of India and in the interest of group simplification and to drive operations synergies, the business activities of Kotak Mahindra Investments Limited (KMIL), a wholly-owned subsidiary of KMBL, will be conducted departmentally within the Bank on and from April 1, 2026. Accordingly, KMIL shall not sanction any new loans from April 1, 2026 while continuing to service its existing facilities and honor its obligations under facility agreements executed on or before March 31, 2026. The impact of the above decisions on the consolidated revenue, profit after tax and net-worth of the Bank is not material.
On March 27, 2026, in response to the clarification sought by the stock exchange regarding the Municipal Corporation of Panchkula, KMBL clarified that there is no material impact in terms of the provisions of Regulation 30(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, the Bank is examining the matter and is cooperating fully with the Municipal Corporation, government authorities and law enforcement agencies in this process. Crisil ratings will continue to closely monitor the situation. |
Analytical Approach For arriving at the ratings, Crisil Ratings has combined the financial and business risk profiles of KMBL and its subsidiaries and associates. This is because all the entities, collectively referred to as the Kotak Group, have extensive business and operational linkages, shared senior management and similar brand.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation |
Key Rating Drivers Strong capitalisation The Kotak Group has maintained its strong capital position. Absolute networth (capital and reserves) increased to Rs 175,251 crore on December 31, 2025, as compared to Rs 157,395 crore on March 31, 2025 (Rs 129,892 crore as on March 31, 2024). CET-1 ratio and overall CAR were healthy at 22.4% and 23.3%, respectively as on December 31, 2025; 22.3% and 23.3%, respectively as on March 31, 2025 (20.7% and 21.8%, respectively as on March 31, 2024). Capitalisation is supported by the demonstrated ability to raise capital. Networth (capital and reserves) coverage for net non-performing assets (NPAs) remains comfortable at 87.2 times as on December 31, 2025 (87 times as on March 31, 2025) for the Bank on a standalone basis. Capitalisation of other fund-based Kotak Group entities was also comfortable with gearing of Kotak Mahindra Prime Ltd at 2.6 times as on March 31, 2025 and Kotak Mahindra Investments Ltd at 2.2 times as on March 31, 2025 (as per Indian Accounting Standards).
Crisil Ratings believes the Kotak Group's capitalisation will continue to be backed by steady internal cash accruals and remain strong to support growth initiatives over the medium term.
Healthy asset quality The Kotak Group has demonstrated its ability to maintain asset quality through cycles. The Group's gross NPAs stood at 1.3% as on December 31, 2025, as against 1.4% as on March 31, 2025. The Group has consistently demonstrated robust asset quality, with gross NPAs hovering around 1.5% since the start of fiscal 2024, well within the acceptable threshold. The provisioning cover of the Group is 73% as on December 31, 2025.
The portfolio under special mention account (SMA) 2 (Fund based outstanding for borrowers with exposure > Rs. 5 cr) is Rs. 279 crore as on December 31, 2025. Furthermore, while around 32% of the advances comprise of corporate advances and hence are chunky in nature, these exposures are largely to higher rated corporates thus reducing the risk in that portfolio. Crisil Ratings believes the Kotak Group's stringent underwriting standards, strong risk management systems and processes, and rigorous collection measures will keep asset quality healthy over the medium term. However, delinquencies could inch up due to the challenging current macro environment.
Comfortable earnings The Kotak Group has comfortable earnings with return on assets (RoA) of 2.0% in nine months of fiscal 2026 as compared to ~2.3% for fiscal 2025 (2.6% for fiscal 2024).
The earnings profile of the Bank remains supported by healthy net interest margin (excluding other income) of 4.1% for nine months of fiscal 2026, as compared to 4.4% for fiscal 2025 (4.8% for fiscal 2024). Furthermore, with continued focus on low-cost current and savings accounts (41.3% share in total deposits as on December 31, 2025), the cost of funds remains competitive at 4.54% as on same date. The Group's business is diversified across financial services, ensuring a healthy mix of fund- and fee-based revenue streams. Crisil Ratings believes KMBL will continue to maintain comfortable profitability, given the high interest spreads and healthy fee income. |
Liquidity Superior Liquidity continues to be superior, supported by sizeable retail deposit base that forms a significant part of the total deposits. The daily average liquidity coverage ratio for the quarter ended December 31, 2025, was at 134.8% against the regulatory requirement of 100% on the Group level. The Bank's liquidity also benefits from access to systemic sources of funds such as the liquidity adjustment facility from the RBI, access to the call money market, and refinance limits from sources such as National Bank for Agriculture and Rural Development and Small Industries Development Bank of India. |
ESG Profile Crisil Ratings believes KMBL’s environment, social and governance (ESG) profile supports its strong credit risk profile.
The ESG profile in the banking sector is typically factors in governance as a key differentiator between individual banks. The sector has a reasonable social impact because of its nationwide presence, substantial employee and customer base, and it can play a key role in promoting financial inclusion. While the sector does not have direct adverse environmental impact, the lending decisions may have a bearing on the environment.
KMBL has ongoing focus on strengthening various aspects of its ESG profile.
KMBL’s key ESG highlights:
KMBL maintains a robust governance structure with 50% independent board members, 3 women directors, and a clear separation between the chairman and executive roles. Along with prudent risk management practices and a proactive investor grievance redressal system and the Bank also ensures its disclosures align with global standards, ensuring transparency. |
Outlook Stable Crisil Ratings believes the Kotak Group should continue to report steady growth in its lending business, while maintaining healthy asset quality and strong capitalisation, over the medium term. Earnings will continue to benefit from a diversified business risk profile. |
Rating sensitivity factors Downward factors
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About the Company KMBL is the flagship company of the Kotak Group and has diversified operations covering commercial vehicle financing, consumer loans, corporate finance and asset reconstruction. Through its subsidiaries, the Bank is engaged in investment banking, equity broking, securities-based lending, car finance, insurance and asset management. KMBL was reconstituted as a commercial bank from a non-banking financial company (NBFC) in fiscal 2003 to provide a more comprehensive range of financial services.
Other than KMBL, the key operating companies of the Kotak Group are Kotak Mahindra Prime Ltd (car financing), Kotak Mahindra Capital Company (investment banking), Kotak Securities Ltd (retail and institutional equities broking, and portfolio management services), Kotak Mahindra Investments Ltd (commercial real estate lending) and Kotak Alternate Asset Managers Ltd (alternate assets space). The Group also operates in the life insurance business through Kotak Mahindra Life Insurance Company Ltd and has an associate [Zurich Kotak General Insurance Ltd (formerly known as Kotak Mahindra General Insurance Company Ltd)] through which it carries the general insurance business. It is also present in the asset management business through Kotak Mahindra AMC and Trustee Company Ltd, and in the infrastructure financing space through Kotak Infrastructure Debt Fund. |
Key Financial Indicators
#excluding profits from divestment of KGI &including unaudited profits *as per Crisil Ratings calculation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
# Yet to be issued |
Annexure - List of Entities Consolidated
#Post divestment in March 2026, Infina Finance ceased to be an associate of the Group @With effect from 11th October 2025, Sonata Finance Private Limited merged with BSS Microfinance Limited. The appointed date of the merger is 1st April 2025. |
| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Annexure: List of instruments and names of regulators of the instruments As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
* Includes securitisation transactions involving assignee payout, acquirer's payout. ~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), Crisil Ratings Limited shall separately capture the rated quantum details along with names of respective regulators. ^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. @ These ratings were assigned during regulatory regime prior to introduction of SEBI CRA Circular dated Feb 10, 2026 and the investor side regulators have accordingly been included.
Note: Kindly note that for activities or instruments falling under the purview of FSRs other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
Criteria Details
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