Kotak Mahindra Bank cuts savings account interest rate; effective from April 20

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Updated: Apr 19, 2020 6:50 PM

Kotak Mahindra Bank, which has revised interest rate on daily balances in savings account multiple times over the past year or so, has again made a change.

Kotak Mahindra Bank, ECA Trading Services, Kotak Mahindra Prime, RBI Regulations, BSEBrokerage firm UBS had reportedly downgraded Kotak Mahindra Bank from ‘neutral’ to ‘sell’.

Fourth largest private sector lender in India Kotak Mahindra Bank, which has revised interest rates on daily balances in its savings account multiple times over the past year or so, has again made a change. Effective April 20, daily balances above Rs 1 lakh in savings account will now earn 4.5 per cent interest per annum. For daily balances up to Rs 1 lakh, the bank has now revised the rate to 3.75 per cent per annum. “The interest rates mentioned are applicable for Resident Accounts only,” the bank said in a notification on its website.

This comes days after the bank had decided to pass on the relief of the three-month moratorium announced by the Reserve Bank of India last month to borrowers, account holders and credit cardholders. Kotak Bank had extended all credit facilities outstanding as on March 31, 2020, by three months even though it wouldn’t be applicable to loan disbursements to be made in April 2020 and ahead. Importantly, brokerage firm UBS had reportedly downgraded Kotak Mahindra Bank from ‘neutral’ to ‘sell’ even as it has cut the bank’s 12-month target price from Rs 1,500 to Rs 1,050.

Also read: Moratorium: 10 per cent provisioning may shave Rs 35,000 crore off bank profits

Meanwhile, other banks had also revised the interest rates for its savings account. For instance, earlier this month, India’s largest lender State Bank of India had announced cut of 25 basis points in interest rates of its savings account from 3 per cent earlier to 2.75 per cent effective April 15, 2020. ICICI bank as well had cut the same by 25 bps effective April 9, 2020. For below Rs 50 lakh balance, savings account will earn 3.25 per cent annually while for balance above that amount, the earning would 3.75 per cent a year.

Kotak Mahindra Bank will be holding a board meeting on Wednesday (April 22) to “consider raising of equity capital through private placement, follow-on public offering (FPO), Qualified Institutions Placement (QIP) or through a combination thereof, as may be considered appropriate, subject to shareholders’ approval and governmental/regulatory/statutory approvals and requirements, as applicable,” it informed the exchanges. The fundraising follows the RBI’s permission in February this year for the bank to cut promoters’ stake in it from 29.96 per cent to 26 per cent.

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