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'Banking like cricket, ball-by-ball'
Once an investment banker at heart, Uday Kotak, vice-chairman, Kotak Mahindra Bank, now loves to be called a banker after having built an empire that has a market cap of over Rs27,800 crore. Having received the banking license in 2003, which he recalls as the single-most turning point in his career, Kotak tells HT he wants to address the challenge of employee behaviour that the industry is grappling with. Excerpts.
Once an investment banker at heart, Uday Kotak, vice-chairman, Kotak Mahindra Bank, now loves to be called a banker after having built an empire that has a market cap of over Rs27,800 crore. Having received the banking license in 2003, which he recalls as the single-most turning point in his career, Kotak tells HT he wants to address the challenge of employee behaviour that the industry is grappling with. Excerpts.
How do you see the last 25 years?
I just feel like yesterday and still remember when we started the company. If you are a realist you recognise that though an individual has a role, what is more important is that the country opened up and gave opportunity.
What is the one factor that you see as the most critical in the group's development?
While there are several of them, I would say that getting the banking license in 2003 and our conversion into a bank was the single-most important turning point.
Do you think that now it is very difficult to achieve something that you achieved?
In life it's a constantly changing world. Think about the entrepreneur who started Facebook, Twitter or Apple. Who knows tomorrow some technology will completely disintermediate the banking industry. So one of the biggest lessons I have learnt is never take anything for granted. It's like cricket where you have to play every ball at its merit.
Your views on branch banking...
Too many branches are a plus or liability is a very big issue. Our branches are less than others and you need critical mass because you need physical visibility. Branch expansion will remain for 3-5 years but for the next 10 years I am not sure. Our view is somewhere around 500 branches by 2012 and the optimum range would be 500-1,000 branches.
What is the biggest challenge for the financial services industry
The human side of financial services is where the biggest challenge is. If you have a short-termism culture among employees of an industry, it's a big challenge to build trust.
But is the pressure to achieve targets not coming from the top?
It is about target and formulas. I am not saying it's not there in my firm but I want to see how can we change this. We have to move away from that and at the same time how do you ensure accountability.
What are your plans for listing other companies?
We have no plans to list any other company because I believe there should be one firm culture.
What about succession planning at Kotak? Will your sons take over?
He is not going to sit in my chair. When you have an institution having 20,000 people, succession is an institutional decision. If they want experience in our firm they can always take it.
