Kotak Mahindra Bank says it is working toward doubling its unified SME business to about ₹2.5 lakh crore over three to three-and-a-half years. That is a management focus, not a guaranteed result. The bank’s FY2025-26 investor presentation separately reports ₹1.2 lakh crore in SME advances, so the two figures should be treated as different reported measures rather than interchangeable starting points.
What Kotak’s doubling target means
Shekhar Bhandari, Kotak Mahindra Bank’s Head-SME, was quoted in a report credited to The Hindu BusinessLine and reproduced by TradingView as saying, “A business of this size doubling in three to three-and-a-half years is the focus we are working towards.” The report puts the unified SME portfolio at around ₹1.25 lakh crore and the implied target at roughly ₹2.5 lakh crore. The original publication date is not shown in the reviewed rendering, so the target should be read as an attributed statement, not as a dated formal forecast. TradingView reproduction of The Hindu BusinessLine report.
Kotak’s official FY2025-26 investor presentation, filed May 2, 2026, reports SME advances of ₹1.2 lakh crore. That measure was up 19% year on year and 5% quarter on quarter, and represented 24% of the bank’s total advances. The presentation’s ₹1.2 lakh crore figure is close to, but not the same as, the interview report’s approximate ₹1.25 lakh crore unified portfolio. The sources do not establish that the definitions or reporting dates are identical, so neither figure should be silently substituted for the other. Kotak FY2025-26 investor presentation.
How Kotak says it will pursue growth
One SME vertical across three businesses
The report says Kotak brought agri, business banking and corporate SME together in a unified vertical. Bhandari said customer-centricity motivated the integration: “We wanted one onboarding process, one underwriting framework, one servicing model and one way of engaging with customers across the SME spectrum.” The intended benefit is a more consistent experience across these businesses, rather than separate processes depending on which part of the bank serves a customer. The report describes the rationale and structure; it does not quantify any resulting improvement in service or growth.
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A broader relationship than a loan
Kotak’s investor presentation describes its SME proposition as relationship-led and lists working capital, term loans, supply-chain finance, trade finance, cash management and foreign exchange. The strategy is to serve multiple business needs, not just provide credit. Bhandari framed the distinction this way: “Funding alone is no longer enough. The real differentiator is whether you can provide funds on time, improve working capital efficiency and help customers run better businesses.”
The bank’s FY2025-26 presentation says SME contributed 17% of total fees and services income for that financial year, with that income growing 14% year on year. Those are bank-reported results, not evidence that every SME customer uses the full set of services or that fee growth will continue at the same rate.
Digital journeys and AI workshops
The report describes investment in digital customer journeys and AI workshops for SME promoters. These are presented as ways to improve engagement and help business owners understand relevant tools; the available sources do not provide a standalone success measure for the workshops. In a separate Moneycontrol interview on May 11, 2026, Bhandari described AI-assisted underwriting as shortening some turnaround stages while retaining physical customer assessment. That is his account of the process, not a published measure of average approval times or outcomes. Moneycontrol interview, May 11, 2026.
The size of the opportunity—and the limits of the estimate
Bhandari cited industry estimates in the BusinessLine report that put the SME credit market at ₹66 lakh crore, with ₹38 lakh crore already addressed by banks and non-bank financial companies (NBFCs) and ₹28 lakh crore unmet. These are estimates attributed to him, not figures independently confirmed by Kotak’s investor presentation. They indicate the market opportunity Kotak’s strategy is intended to address, but they do not mean the bank expects to capture the entire unmet amount.
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The report also attributes to Bhandari an expectation that SME could rise from about 24% to nearly 30% of Kotak’s advances. This is an expectation, not a formal commitment. The bank presentation’s 24% figure is its FY2025-26 reported SME advances mix; the target share is from the separate interview report.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Growth depends on lending discipline and external conditions
In the May 11, 2026 Moneycontrol interview, Bhandari said geopolitical disruption could affect the doubling plan and that the bank would be cautious even if demand were strong. He called the Iran crisis a key risk to the target and said the bank would not be “very exuberant in lending” during such periods. This time-specific warning makes clear that pursuing portfolio growth does not mean lending without regard to risk. The target remains contingent on conditions and the bank’s credit decisions.
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What to watch as the plan develops
- Reported SME advances: Compare updates using the bank’s stated period and definition, rather than assuming the interview’s unified-portfolio estimate is identical to formal SME advances.
- Share of advances: Track whether the reported SME mix moves from the FY2025-26 baseline of 24% toward the nearly 30% expectation attributed to Bhandari.
- Service breadth and income: The bank’s list of lending and transaction services, alongside SME’s reported contribution to fees and services income, provides context on whether the relationship-led strategy extends beyond credit.
- Credit quality and lending discipline: Portfolio expansion is not a complete measure of performance; growth should be considered alongside risk outcomes and the bank’s stated caution during disruption.
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