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The Kotak group acquires the car loan business of Volkswagen Finance

MUMBAI: The Kotak Mahindra Group announced on Thursday that it has acquired the vehicle finance loan portfolio of Volkswagen Finance Pvt Ltd (VWFPL), the Indian captive finance arm of the Volkswagen Group.

Under the agreement, Kotak Mahindra Prime Ltd will acquire the passenger car and two-wheeler portfolio, and Kotak Mahindra Bank Ltd will acquire the commercial vehicle portfolio from VWFPL. Kotak Mahindra Prime is a subsidiary of Kotak Mahindra Bank and specializes in the financing of passenger vehicles and two-wheelers.

With this acquisition, Kotak said it would have access to over 30,000 high quality customers with a total outstanding loan with VWFPL of around Rs 1,340 crore. All of these acquired loans are classified as standard loans according to the current guidelines of the Reserve Bank of India (RBI). In addition to standard loans, Kotak also acquired VWFPL’s portfolio of non-performing assets.

“The strategic intention behind this acquisition is to further strengthen Kotak’s vehicle finance loan portfolio and expand our market share. VWFPL has been operating in the country since 2009 and during this period has built a strong portfolio of customers. The long-term growth outlook for the Indian automotive market is very attractive, and this acquisition strengthens Kotak’s position as a leading player in automotive finance, ”said Dr. Kannan, Group President (Commercial Bank) at Kotak Mahindra Bank and director of Kotak. Mahindra Prime.

Aashish Deshpande, Managing Director and Managing Director of Volkswagen Finance, said the sale of its retail portfolio aligns with its new strategic focus on a digital strategy refined through its subsidiary, the KUWY digital platform.

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