In a letter to shareholders, Kotak Mahindra Bank’s Managing Director (MD) and Chief Executive Officer (CEO) Uday Kotak on Saturday warned against ‘bureaucratisation’ of financial services.
“I feel the financial sector players risk becoming more robotic, curbing the entrepreneurial flair since the fear of making a mistake overrides the joy of creation and development. While we need ‘Arjuna’s eye’ on risk management, we must prevent bureaucratisation of financial services,” Kotak said.
Speaking on the Indian economy, the CEO said the country’s macro and micro factors are in good shape, and a virtuous cycle is on the cards.
The turbulent period post-2008 saw the Indian financial sector experiencing many crises till about 2020 which created a certain backdrop, he said.
“We must avoid a mindset that we want accident-free roads hence we will restrict cars. Instead, to take this analogy further, we need more roads, more cars and better signals and traffic regulation,” he said, adding that accidents have to be minimised and managed, and cannot be eliminated without having a significant impact on growth aspirations.
Geo-politics dominates world economics and India has indeed played its cards well. From oil diplomacy which has given India access to cheaper oil to a strategic positioning among the US, Russia and China, India has pivoted herself to be a key player for Europe, the Middle East, Japan, and Australia .
“I would like us to pursue the Indian dream of a $30 trillion economy and unshackle the financial sector in a nuanced manner towards optimum regulation,” Kotak added.
As per the RBI’s mandate, the veteran banker is required to step down from the post of MD and CEO by the end of this year. Kotak said after stepping down from his whole-time role soon, he will be on the bank’s board as non-executive director and strategic shareholder.
“Going forward, I see my role as a non-executive board governance member and a strategic shareholder with a long-term perspective of nurturing a world class institution,” he said.
Kotak said it is unusual in today’s world of banking anywhere to have an individual with around 26 per cent skin in the game with disproportionate family assets in one stock, emotionally attached to living his dream of making India proud.
Kotak wrote to shareholders that he has spent most of his life here, starting from scratch with very little capital in 1985, three people and a 300 sq. foot office.
“We have created value for stakeholders and now provide nearly 100,000 direct jobs and a multiple of that in indirect jobs. An investor who invested Rs 10,000 with us in 1985 would be worth around Rs 300 crore today,” he said.