Mumbai: Veteran banker Uday Kotak Tuesday said even though non-bank lenders have received a breather since the crisis late last year, the sector is more “fragile" than it was a year ago.Kotak, who has been tasked to lead the efforts of saving the debt-ridden infra lender IL&FS, said we need to carefully watch the space going forward.

“Hopefully, the NBFC sector which saw significant pressure in October-November last year is beginning to breathe a little better now. However, I do believe that the sector is more fragile than what it was one year ago," Kotak said in an annual message to employees at Kotak Mahindra Bank.

He attributed the stress in the (NBFC) space to liquidity concerns emanating out of the rise in interest rates as the high growth in financial savings post-demonetisation began to go back as currency in circulation.

IL&FS, which has a debt of over 94,000 crore, was the “first major default" and led to questions over whether the nation would have a “Lehman-like mini crisis", he said.

Kotak, the executive vice chairman and managing director of Kotak Mahindra Bank, said he took up the task of heading IL&FS on a request from the government as a “national duty".

He exuded confidence that the financial sector will weather the current storm with corrective actions like consolidations in bank balance sheets and steps taken at ensuring stability.

Kotak said all the businesses he heads are in very good shape fundamentally and very well positioned for growth but expressed disappointment over the bank scrip rising only 20%, exhorting the employees its biggest strengths to ensure for a faster growth in 2019.

Going ahead, the challenge for the economy is to accelerate growth to beyond the 7%, he said, adding this is essential given the large population.

(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed)

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