Kotak Mahindra Bank Ltd, which aims 35 per cent growth in the current fiscal, has said its new segment of government business would contribute the most in profit escalation.
"It would be premature to talk about revenue from government business for the current fiscal. But we hope, this new segment would help us grow by 30 to 35 per cent this year,” said Mahesh Balasubramanian, executive vice president of the bank on the sidelines of its campaign launching event here.
In 2011-12, the bank had posted 32.61 per cent growth , at Rs 1,085.05 crore on standalone basis.
The Reserve Bank of India (RBI) in February this year had allowed private banks to handle government money. Kotak Mahindra Bank, which posted lower profit growth than its own estimate in the April-June quarter, said it is in discussions with various state governments to bring in more revenue.
"We are in talks with five state governments to handle their businesses, which are mainly tax receipts,” he added.
Banks earn a fee while working as an agent of RBI for collecting revenues as well as disbursing the payments under various schemes. The move by the central bank earlier this year was aimed at enhancing the quality of customer service in government business through more competition, improving customer convenience by increasing the number of customer service outlets and broad basing the revenue collection and payments mechanism of governments.
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Car loan segment contribute a significant proportion to Kotak's profit after its banking arm. However, profit from the passenger vehicle segment dropped in the first quarter due to various factors such as competition and rising fuel prices. After the recent price hike announcement in diesel amid poor industrial growth, the company said it hopes to at least match the growth it achieved during the previous fiscal.
"Being one of the largest player in car loan market we have gone through many challenges. We hope to match at least last year's growth percentage by improving penetration,” said Balasubramanian, who co-heads the branching business of Kotak.
In 2011-12, the company's auto loan arm had posted 21 per cent growth in profit.
The bank has plans to increase its customer base by a third every year and has targeted 500 branches across the country by end of 2013, from 375 at present. In Odisha, Kotak expects to open two more branches in 2012-13, in addition to its existing six branches, he informed.