Private sector lender Kotak Mahindra Bank on Wednesday announced a strategy to double its existing customer base to 16 million in the next 18 months. A key component of this strategy would be a purely digitally-enabled savings account feature, which the bank calls ‘811’ in a nod to the government’s November 8 decision to demonetise high-value currency notes and push for a less-cash economy. At the end of December, the bank had R34,691 crore in savings accounts and R20,406 crore in current accounts.
Uday Kotak, executive vice chairman and managing director, said the new product, which will be available as a feature on the bank’s existing mobile application, will cost the bank 80-90% less in terms of customer acquisition than its regular accounts. The product will enable people to open an account with the bank without visiting a branch or producing physical documents. An individual will need an Aadhaar number and a permanent account number to open an account.
The product, which retains Kotak’s 6% interest rate for savings accounts, will have no minimum-balance requirement. The bank will also activate Aadhaar-based one-time password (OTP) on the product, with the account holder having the option of using either their fingerprint or an OTP for carrying out digital transactions. There will be no charges on such transactions. 811 will be in the form of a downloadable mobile application and will be available to customers.
Kotak said, “811 is Kotak’s symbol of constructive, creative disruption in banking and financial services. While my colleagues, as I mentioned, tell me 18 months, I would like to have the opportunity to say they’ll do it better, bolder, faster, sooner to double the bank on an effectively organic basis, as we talk.”
The app will allow users to make payments using a virtual debit card and BharatQR, money transfers using Unified Payments Interface, manage investments in fixed deposits and mutual funds, access credit cards and apply for personal loans. It will have partnerships with PVR, Flipkart and Goibibo, whose services account holders will be able to avail of directly through the app.