Kotak Mahindra Bank Ltd. is recruiting as many as 500 engineers as the billionaire Uday Kotak-backed Indian lender pushes to amp up its technology to lift its long-term competitiveness.

Deutsche Bank AG’s India retail assets and wealth management have drawn binding bids from Kotak Mahindra Bank Ltd. and Federal Bank Ltd., according to people familiar with the matter, as the local lenders pounce on opportunities from foreign players seeking to exit the crowded banking market.