Kotak Mahindra Bank forays into healthcare lending; not to use RBI's liquidity window

Kotak Mahindra Bank on Tuesday announced its foray into the healthcare lending space, where it will be taking exposures of up to Rs 15 crore apiece. The private sector lender, however, will not be seeking funds from the Reserve Bank's on-tap liquidity scheme for the sector, as its cost of funds is very low, its President and Head of Business Banking Assets, Sunil Daga, said.
In May this year, the RBI had announced an on-tap liquidity window of Rs 50,000 crore for on-lending by banks to the healthcare sector, where they can take exposures of up to three years and access funding at the repo rate.

Daga said the bank's cost of funds is "very competitive" and hence, it will not be accessing the RBI window. Even without the central bank's special window, the business is exciting, he added.

Till now, Kotak Mahindra Bank had been providing funds to the healthcare sector but now it has a focused offering, Daga said, adding that the business will be part of its consumer segment.

Daga declined to specify the size of its current healthcare book, but added that it was miniscule. Now, the bank has created a dedicated pan-India team to cater to this business.

It will take exposures ranging from healthcare-related loans for an individual, to long-term project lending for doctors building healthcare infrastructure, he said, adding that single exposure can go up to Rs 15 crore.

The bank is targeting to start with signing up 100 customers a month and will be aiming to take it up to 500 a month, Daga said.

The loans will be both secured as well as unsecured, and also include a quick approval for exposures up to Rs 50 lakh, the bank said in a statement.

The loan tenure will be between 12 to 84 months, while the loan to value ratio can go up to 85 per cent, as per its website.