Asia’s richest banker Uday Kotak believes robust corporate governance and integrity would help the Kotak Group cement its credentials as a banking powerhouse in the current decade, even as he anticipates consolidation in India’s financial and corporate landscape.
“It is a great opportunity for Kotak to grow in an environment which is consolidating,” the billionaire Kotak, who is the chief executive of Kotak Mahindra BankNSE -0.86 %, said in his two-page address to Kotak Group employees.
“As the financial sector goes through its throes, Kotak must meet the challenges and take this opportunity to strengthen its position as a credible, high-quality, high on integrity, and value-based player in the system,” he said in the note. “I would encourage all of us to focus on a Kotak of the future, which stands by its deep values and commitment.”
Kotak also likened the state of Indian finance to Charles Darwin’s Theory of Evolution and said that going ahead, only the fit would survive. Good governance and accountability were crucial for businesses to succeed and sustain, he said.
“Good governance matters — whether it is a country or a company,” he said. “We are, therefore, very committed to building our company in the 20s on the back of good governance. The world in general believes that it needs empowerment and freedom. But along with freedom comes accountability. Freedom is not the right to do what one wants to do — it is the responsibility to do what one ought to do.”
In its latest edition of the financial stability report, the Reserve Bank of India (RBI) said that the Indian banking system was not yet out of the woods, and that there was a likelihood of bad loans increasing as a percentage of advances after the first annual decline in eight years.
The gross non-performing ratio of banks may increase to 9.9% by September 2020, the central bank said, from 9.3% in September 2019. The gross NPA ratio of banks was at 9.3% in March.