Kotak Mahindra Bank Q2 Results: Profit Up 29% to ₹4,212 Crore as NRI Dollar Deposits Swell Books

Kotak Mahindra Bank raised ₹55,344 crore in foreign-currency deposits from NRIs in three months, and that one number explains most of its September-quarter story. The bank’s Kotak Mahindra Bank Q2 results, approved by its board on Saturday, 24 October 2026, show standalone profit up 29% to ₹4,212 crore, cleaner loan books, and a lower interest margin that the bank puts down to those deposits.

Kotak Mahindra Bank Q2 results: key numbers

All figures are from the bank’s media release filed with BSE. Consolidated profit, which includes its broking, insurance, asset management and other arms, was ₹5,645 crore, up 26%.

The FCNR(B) effect

FCNR(B) deposits are fixed deposits that NRIs keep in foreign currency, such as US dollars, with an Indian bank. In June 2026 RBI opened a swap window that lets banks swap these dollars with RBI, and the RBI Bulletin released on 23 October noted that “strong inflows under the FCNR(B) swap window augmented reserves”.

Kotak used the window heavily. It mobilised about ₹55,344 crore of FCNR(B) deposits and lent about ₹16,110 crore through its international branches. That had three visible effects:

• Deposits jumped: total deposits rose 23% to ₹6,51,491 crore. Excluding FCNR(B), growth was 13%.
• Loans jumped: net advances rose 25% to ₹5,77,295 crore. Excluding FCNR(B)-backed loans and a portfolio bought from group company Kotak Mahindra Investments, growth was 19%.
• Margin fell: NIM slipped to 4.31% from 4.53% in the June quarter. The bank said the moderation “was largely on account of FCNR(B) mobilisation”.

The CASA ratio, the share of low-cost current and savings deposits, fell to 38.2% from 42.3% a year ago, again because term deposits swelled. Excluding FCNR(B), it was 41.8%.

Asset quality

Fresh bad loans (slippages) fell 24% year on year to ₹1,230 crore. Annualised credit cost dropped to 0.35% from 0.79%. Provision coverage was 78%. Capital adequacy was 21.9%, well above the regulatory minimum.

What it means for customers

• Depositors: the bank is well capitalised, with 21.9% capital adequacy. Deposit rates depend on the bank’s funding needs and RBI policy, and a lender flush with NRI money has less need to raise domestic FD rates. That is our reading, not the bank’s statement. Compare rates before renewing; our FD ladder guide helps when rates are moving.
• Borrowers: many retail loans are linked to an external benchmark such as the repo rate, so EMIs follow RBI policy more than any one bank’s results. See our note on how a repo hike affects EMIs.
• NRIs: the quarter shows banks are keen on FCNR(B) money. Our report on NRI deposit flows shows how much has come in this year.

When will the market react?

Markets were closed on Saturday, so the shares will respond on Monday, 26 October. We do not give buy or sell views on individual stocks.

FAQs

What was Kotak Mahindra Bank’s Q2 FY27 profit?

₹4,212 crore standalone, up 29% year on year; ₹5,645 crore consolidated, up 26%.

Why did the margin fall?

The bank says it was largely due to the large FCNR(B) deposits raised in the quarter.

Takeaway: Kotak Mahindra Bank Q2 results show strong profit growth and better asset quality, with headline deposit and loan growth inflated by NRI dollar deposits that also trimmed the margin. Strip those out and growth was a steadier 13% in deposits and 19% in loans.