My fiduciary role in the transition is over: Uday Kotak

Uday Kotak, founder, Kotak Mahindra Bank.  (Mint)
Uday Kotak, founder, Kotak Mahindra Bank. (Mint)


In an interview, Uday Kotak said Indian institutions must prioritize value creation for local investors, emphasizing the importance of having banks that are majority-owned by domestic investors

MUMBAI : Billionaire Uday Kotak, who stepped down as the chief executive of Kotak Mahindra Bank Ltd on 1 September, believes he has fulfilled his fiduciary duty in ensuring leadership transition in the bank he founded.

The onus to approve the name of a CEO for the bank now lies with the Reserve Bank of India (RBI) after Kotak, 64, surprised everyone by stepping down from the role of managing director and CEO four months before his term was to end on 31 December.

Graphic: Mint
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Graphic: Mint

Joint managing director Dipak Gupta will take charge as interim managing director and CEO until 31 December, subject to the approval of RBI. Kotak will, however, continue his association with the bank as a non-executive director.

In an interview, Kotak said Indian institutions must prioritize value creation for local investors, emphasizing the importance of having banks that are majority-owned by domestic investors. While Kotak discussed several topics, he remained tight-lipped about his future plans and questions related to the banking regulator. Edited excerpts:

Why did you decide to step down well ahead of your term?

It was the right thing to do. It was a voluntary decision taken by me to step down. If you go back, we were all in transition. Transition meant three people stepping down at the same time. This is just sequencing out. The board has appointed Dipak Gupta as the interim managing director and CEO, which is permitted for a period of four months under the Banking Regulation Act. Then there is this new CEO and chairman’s application we made well in time. All the work from the bank’s side, we have completed. My fiduciary responsibilities for transition and sequencing are done. I didn’t want to hang around till the last day.

I spent 38 years. A few months here or there doesn’t matter. There is this whole overhang in the market over the transition. So, I have taken the first step towards that. There is an interim CEO, subject to regulatory approval.

What is your message to investors?

An individual should not become more important than the institution. I have had the pleasure of dealing with the best names in the world. But finally, charting our own destiny. I have dealt with Goldman Sachs, Old Mutual and ING. Finally, we did what was in the best interest of our firm. We need to keep the entrepreneurial spirit alive.

Do you think the entrepreneurial spirit can survive at Kotak Mahindra Bank without you at the helm?

Kotak’s entrepreneurial spirit is deep in the DNA of the bank, and I have no doubt it will flourish in the years ahead.

How important is it to have majority-owned Indian banks?

There is only one Indian-owned majority bank among the top five banks, and that is Kotak. If Indian savers and investors have to get a return over time, Indian institutions must be run well and must create value for Indian savers. Global investors are welcome. But Indian investors are crucial for Indians at heart.

While the succession plan has been in place, it has not crystallized yet without RBI approval. How should the market deal with this uncertainty?

It’s not in the hands of the institution. What is in our hands, we have done.

Any regrets you have had over the last 38 years?

There was a time in 2008-09 I may have made the mistake of reading The Wall Street Journal too much. I should have read the Indian papers. Post 2008, I slowed the speed at which we were growing because the world was looking bad.

How will you keep yourself busy after retirement?

Let’s see where destiny takes us. But it’s a plain piece of paper—no predetermined agenda.

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