Uday Kotak’s success mantra: These 2 qualities help Asia’s richest banker stand apart

According to reports, the government is mulling a re-introduction of the Financial Resolution and Deposit Insurance Bill, which may address such issues. (Reuters)

Asia’s richest banker Uday Kotak says that common sense and and middle-class values have propelled his career to great heights. “I think the most important thing that I learnt in life is common sense and middle-class values. That’s the bedrock of all of us,” Uday Kotak MD and CEO of Kotak Mahindra Bank said at the India Economic Conlave 2019 aired on ET Now. According to the ace banker, the bank for the future should have three important qualities– prudence, simplicity and humility. “The first is prudence, which implies no excessive leverage. Post financial crisis, the banks were levered at 50:1. The second is to have no complex products or simplicity. Thirdly, the bankers need humility as they are managing other people’s money. So, these three qualities are useful for banks as well as individuals in our daily life,” Kotak said at the event.

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Interestingly, Uday Kotak’s net worth has multiplied by more than 4 times in the last 10-years. With a net worth of nearly $15.3 billion, Uday Kotak remains Asia’s richest banker. Spurning his family’s trading business, Uday Kotak started a finance firm in 1985 then went on convert it into a bank 2003, noted Forbes. Interestingly, Kotak Mahindra Bank is now among India’s top four banks in the private sector, boosted by its 2014 acquisition of ING Bank’s Indian operations.

Taking stock of the current business landscape in India, Uday Kotak noted that Indian businesses are moving towards survival of the fittest. “If there are excesses and issues they will come out in this cleaning and purging process. Indian policy is taking a shift of not throwing good money after bad,” he said.

After the successful resolution of Essar Steel under the Insolvency and Bankruptcy Code, Kotak said that it is a path-breaking case in jurisprudence and law. While it has taken long, the IBC is a success he added. Going into the details of the Essar Steel case, Kotak observed that for more than a year, the buyer was there, but there was no distribution framework in place. “So you really need two legs for a solution. The first is the buyer, and the second a distribution framework available to lenders. In these cases, even more than asset monetisation, the distribution is the challenge,” he said.

India’s banks are set for a Rs 54,000 crore earnings windfall this month as the country’s bankruptcy court has made sudden progress in clearing a backlog of large cases including Essar Steel India Ltd., Prayagraj Power Generation Co., Ruchi Soya Industries Ltd. and RattanIndia Power Ltd. — which should be completed in December, Bloomberg reported citing sources as saying.