​​​​Kotak Mahindra Bank: Gearing up for the future

Bank Profile

Established in 1985, the Kotak Mahindra group is one of India’s leading financial services conglomerates. In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the Group’s flagship company, received a banking license from the Reserve Bank of India (RBI). With this, KMFL became the first non-banking finance company in India to become a bank – Kotak Mahindra Bank Limited.

Business Drivers

In 2009, Kotak Bank decided to transform its Core Banking Solution (CBS). The existing legacy system for retail and corporate banking had not been updated even once in the last 7 years, and was laboring under the load of the bank’s rapid growth. It rested on branch server architecture; had become increasingly expensive to maintain and fix; and presented several performance issues including being unavailable to the bank’s back office during end of day operations. But most importantly, the solution lacked vital functionalities, such as NEFT/RTGS Payments, Flexi Deposits, Sweeps, and so on. Unfortunately, the CBS had been customized over the years to such a large extent that it was a herculean task to migrate to the latest version of the existing legacy system. Under the circumstances, total replacement seemed an easier alternative.

Key Selection Criteria

The bank considered a number of core banking technology vendors, before shortlisting Finacle. Over a period of 4 months, they evaluated each of these vendors through a series of demonstrations, product walkthroughs, functionality mapping exercises and technology reviews. At the end of this process, the Bank reached two conclusions – one, that it was indeed unviable to upgrade to the latest core banking offering from their existing vendor, and two, that Finacle was the best fit, both functionally and technologically, for their requirements.

A key factor, which swung the decision in favor of Infosys and Finacle was their alignment with Kotak Mahindra Bank’s future aspirations. The bank clearly intended the new CBS to support their ambitious growth plans. This was evident even from their RFP, which contrary to most, made little mention of the solution’s current attributes, focusing instead on its future functionalities. Infosys’ response to the RFP indicated that Finacle was best placed to fulfill the bank’s expectations. Also, it was already compliant with Indian regulations, which was an added advantage.

Solution Components

Core Banking

Key Success Factors

  • One of the biggest reasons for this success was the teams’ unrelenting focus on achieving what they had set out to do, which was to eliminate the problems of the existing system and ensure that there was no disruption of business during and after the Finacle “go live”.
  • Accomplished this through an unprecedented amount of testing which saw more than 100 “end of days”, and simulations of operations right through to April 2012 prior to going live
  • The bank’s insistence on testing every offering before giving it the go ahead – as well as its vast test case repository – was a contributing factor in the smooth execution
  • The availability of the production environment at the simulation stage itself, which gave the bank and the implementation team a realistic preview of the results that they could expect after going live on the new system.


  • Agility and short time to market
  • Scalability to support future growth
  • 44% increase in new accounts added in the quarter succeeding implementation
  • Increase in new sales, cross sales and fee income
  • New offerings, such as RTGS Payments, Sweeps and Standing Instructions
  • 24x7 back office
Case Study

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