The Competition Commission of India (CCI) on Tuesday, November 26, approved private lender Kotak Mahindra Bank's proposal to secure Standard Chartered Ltd's personal loan book worth ₹4,100 crore. The CCI announced in an official statement that it has approved the “proposed combination involving the acquisition of a standard unsecured personal loans portfolio of Standard Chartered Bank, India Branch by Kotak Mahindra Bank Limited.”
According to India's antitrust regulator's statement on Tuesday, “The proposed combination is like an acquisition of the target business by Kotak Mahindra Bank Limited (Acquirer) from the Standard Chartered Bank, India Branch (Transferor) (Proposed Combination). The Acquirer is a public limited company, with its equity share capital listed on BSE Limited and NSE Limited."
"The Acquirer is registered with the Reserve Bank of India (RBI) as a banking company and provides a range of banking and financial services, including retail banking, wholesale banking, and treasury operations through various branches in India. The Target Business comprises of unsecured personal loans advanced to various individual borrowers in India,” added CCI in its statement.
In October this year, private sector lender Kotak Mahindra Bank Ltd announced it had agreed to acquire British banking major Standard Chartered's India personal loan book for ₹4,100 crore to further strengthen its position in the retail credit market. The acquisition aligns with Kotak Mahindra Bank Ltd's strategy to transform for scale and focus on customer-centric growth.
The loans Kotak is acquiring are classified as standard assets. This move, the bank said, aligns with its strategy to drive growth, expand market share, and tap into the affluent salaried customer segment. This deal marks the second significant transaction between an Indian private sector bank and a foreign bank in recent years.
“The transaction is expected to be completed over the next three months, subject to regulatory and other approvals and the satisfaction or waiver of customary closing conditions, and Kotak will acquire the loan book, which will be outstanding closer to the completion date,” Kotak Mahindra Bank said in a press release as quoted by news agency Bloomberg earlier this year.
The high-quality loan book from Standard Chartered Bank allows Kotak Mahindra Bank to build on its strength in the affluent customer segment and reinforces its leadership in the retail lending space. Deals beyond a certain threshold require approval from the antitrust regulator, which monitors unfair business practices and promotes fair competition in the marketplace.
Kotak Mahindra Bank Ltd. is a listed private banking major that provides a range of banking and financial services. While Kotak Mahindra Bank has acquired many entities in the past, like ING Vysya Bank, this is the first major deal under the leadership of Ashok Vaswani, who took over as managing director (MD) and chief executive officer (CEO) in early 2024.
"Our decision to divest the personal loan book is in line with the bank's focus to accelerate growth in the wealth, affluent and SME (small and medium enterprises) segment," said Aditya Mandloi, Standard Chartered Bank's head of wealth and retail banking for India and South Asia earlier this year. Mandloi added that India remains a key market for StanChart's network, and the lender will continue to invest and grow in the country.
