Kotak International secures UAE licence to offer retail investors access to India-focused funds, marking a milestone in India-UAE financial ties (Freepik)
Kotak International, ready to open its doors to global markets, is the arm of Kotak Mahindra Bank that allows the bank to penetrate international markets. The company has achieved a significant milestone being the first Indian bank to receive a license from the United Arab Emirates Securities & Commodities Authority (SCA).
It would now qualify Kotak to directly market investment funds and portfolios to onshore retail investors in the UAE a big stride towards establishing Indian financial reach abroad.
Until now, Kotak's UAE presence mostly comprised serving high net-worth clients through intermediaries like wealth managers and insurance platforms, but with this new regulatory approval, ordinary investors can be attracted directly for participation in its funds that require a minimum entry point of about $500.
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Kotak International President Shyam Kumar described the approval as a game-changer-altering, widening the scope of the company greatly.
According to Kumar, UAE steadily develops appetite for Indian markets driven further by the strong demographics of India together with resilient economy. "India has a very young and dynamic workforce, which makes its growth story very exciting for global investors," he noted.
With India-focused retail funds in the Gulf region expected to be launched by late 2025, fresh resources will flow into Indian equities and debt instruments.
The attractive feature of the country for investors is the absence of personal income tax and tax on profits from capital gains on fund returns-the hallmark of the UAE that makes it an attractive hub for investing in international markets, enhancing investment into India.
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Approximately 35 percent of the entire UAE population consists of Indians, and they dominate Dubai's property market by investing somewhere in the neighborhood of over $9.5 billion last year into real estate. Hence, Kotak is suitably placed to benefit both from demand by diaspora and general retail interest.
Kotak's entry into the UAE retail segment coincides with this increased economic integration between the two countries. Key commitments such as those linking India's digital payment systems with the UAE and facilitating bilateral transfers were added to the smorgasbord of agreements signed during Prime Minister Narendra Modi's visit to this Gulf region in July.
In all these occurrences, Kotak's expansion not only strengthens its global footprint but is also bolstered by the increasing financial presence of India in the Gulf region.
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