Kotak Mahindra Bank cuts savings account interest rate for balances under Rs 5 lakh

Kotak Mahindra Bank has recently announced a decrease in the interest rate for savings accounts with balances below Rs 5 lakh. The private lender has implemented a 50 basis-point reduction in the savings account interest rate, bringing it down from 3.5% to 3%. These updated rates will come into effect starting October 17, 2024.

Previously, the private bank offered two different interest rate slabs: 3.5% for balances below Rs 50 lakh and 4% for balances exceeding Rs 50 lakh. It is important to note that the interest rates for balances above Rs 5 lakh will remain unchanged. 

The bank has introduced a tiered interest rate system with three levels:

Balances up to Rs. 5 lakhs will earn an interest rate of 3% per annum
Balances above Rs. 5 lakhs and up to Rs. 50 lakhs will yield an interest rate of 3.5%
Balances exceeding Rs. 50 lakhs will receive an interest rate of 4% per annum.

Savings accounts represent approximately 28% of Kotak Mahindra Bank's total deposits.

Here are the new rates:

For balances up to Rs. 5 lakhs

A. Domestic (w.e.f. October 17, 2024): 3% p.a.
B. Non Resident (NRE/NRO) (w.e.f. October 17, 2024): 3% p.a

For balances above Rs.5 lakhs and up to Rs.50 lakhs

A. Domestic (w.e.f. October 17, 2024): 3.5% p.a.
B. Non Resident (NRE/NRO) (w.e.f. October 17, 2024): 3.5% p.a

For balances above Rs. 50 lakhs

A. Domestic (w.e.f. October 17, 2024): 4% p.a.
B. Non Resident (NRE/NRO) (w.e.f. October 17, 2024): 3.5% p.a

Kotak Mahindra Bank to acquire Standard Chartered's personal loan book

Kotak Mahindra Bank Limited (KMBL) has announced its plans to acquire Standard Chartered Bank India's personal loan book. The proposed transaction, expected to be completed by September 30, 2024, involves a total outstanding loan amount of approximately Rs 4,100 crore (roughly $490 million). These loans fall under the category of "Standard Loans" as per the guidelines set by the Reserve Bank of India (RBI).

The personal loan market has become increasingly competitive due to growing consumer demand. A directive issued by the central bank last November required lenders to allocate additional capital for personal loans, citing concerns about the elevated risk posed by the surge in demand.