CEO, Kotak Mahindra Bank
Managing India Awards: Interview with Uday Kotak, Executive Vice Chairman & MD, Kotak Mahindra Bank
CNBC TV18 Interview Uday Kotak, Executive Vice Chairman & Managing Director, Kotak Mahindra Bank.
About Uday Kotak
At the CII Annual Business Summit 2026 and other recent events, Uday Kotak warned that India has not yet felt the full economic impact of the West Asia conflict, stating that higher energy prices are "coming big" and that consumers have not yet felt the pressure. He said that existing fuel inventories and oil companies acting as shock absorbers have delayed the transmission, but argued that a shock is imminent unless the conflict stops. Kotak also described the global order as shifting toward a "tribal" mindset focused on territory and control over assets, citing remarks by Donald Trump about war spoils and charging rent for the Strait of Hormuz as evidence of a return to "true colonialism." Kotak argued that India has "financialized too early," with companies overly focused on short-term stock prices and quarterly results rather than long-term investment. He contrasted this with Chinese companies, which he said prioritize R&D and long-term strategic dominance. He also called for a national debate on the role of state-owned enterprises, noting that much of China's growth has come from such companies and that they are "not necessarily the wrong thing." Kotak urged businesses and policymakers to "prepare for paranoia" and be ready for tough times rather than waiting for a shock.
Transcript (27 segments)
✨ AI-enhanced transcript with speaker attribution
R
Reporter0:00
So, Uday Kotak expects the central bank to ease rates by the start of next year. Speaking to me at the sidelines at the same event, Kotak also had a word of caution: he believes the markets are not factoring in the geopolitical risk. He also spoke about his game plan for MCX. Listen.
U
Uday Kotak0:14
In my view, the politics of a number of state elections and other things have also to be recognized in India, and therefore I am more of the view that economic growth will be upwards but slow.
R
Reporter0:30
But, Shoren, but do you really believe that big-bang reforms will happen only post the state elections?
U
Uday Kotak0:38
I would like to believe so, and I think post November, December, we should see quicker action leading on to the budget, which is February.
R
Reporter0:49
Okay, in terms of what we're seeing in the markets, and today we've actually seen the Lok Sabha clear the SEBI Act — the Stevie Bill — giving more powers to the market regulator. Our last conversation, you said how you anticipate this revival and recovery to be led by the capital market. But even from that point of view, the policy action that's been taken by the government so far is disappointing.
U
Uday Kotak1:08
Don't expect too much. Expect steady progress. And frankly, my view is the cyclical recovery is on the way. I see a cyclical recovery in the economy starting sometime end September, early October, and markets will lead the way. Markets are still leading the way, and they will continue to. I think the action for markets is ahead of the action for the economy, which will follow.
R
Reporter1:33
But do you believe that the uptrend is likely to continue, or do you see that there will be fluctuations because of global volatility and global risk?
U
Uday Kotak1:40
I think, Shar, the thing which is not being covered a lot is global geopolitics, and that's an area of concern. Whether it is Syria, Iraq, Libya, Gaza, Ukraine, I don't think that is being covered by global markets. Global markets are more complacent than they should be on geopolitics. That will have some impact on flows into India, depending on how it goes. But the macro India story... If you and I talked a few weeks ago, you would have asked me questions on the monsoons and oil. Both of them are looking better. Monsoons and oil are looking better.
R
Reporter2:15
We just have the credit policy. Mr. Rajan just a short while ago said that he believes that we could perhaps see a rate cut by the end of the year. What's your own assessment?
U
Uday Kotak2:25
First quarter calendar 2015. That's what I would feel, subject to all the caveats between now and then.
R
Reporter2:36
But do you see more action as far as the SLR is concerned?
U
Uday Kotak2:38
That is what Mr. Rajan's view was: that even if repo is left unchanged, there will be perhaps more tweaking of the SLR changes, along with the liquidity coverage ratio for banks which the RBI is imposing from January 1. If you look at global reserves, they're much lower on banks, but they maintain a high government securities portfolio because of liquidity coverage. Therefore, the RBI has a pretty tight liquidity coverage ratio which it is planning to impose on banks from January 1. So reduction of SLR does not necessarily mean significantly lower SLR holdings by banks.
R
Reporter3:14
So you're expecting a rate cut only in Q1 of next financial year? Let me ask you in terms of GDP growth. You said what will that translate to as far as the GDP numbers are concerned?
U
Uday Kotak3:26
I see this year at around 5.4 to 5.5% GDP growth, and my five-year average continues to be 6.5% plus.
R
Reporter3:39
Financial inclusion is likely to be the big theme, and the government is expected to announce a financial inclusion mission on the 15th of August. In that context, what is it that you would like them to say?
U
Uday Kotak3:49
First of all, Shoren, if you just think about it on a plain piece of paper, the single biggest opportunity on planet Earth is a country called India, where 800 million people out of a 1.2 billion population do not have a bank account. Where else do you get this opportunity? And that is right here at our doorsteps. We as banks need to use technology and go out there and get accounts. I think the future is technology solutions to get banking accounts.
R
Reporter4:20
Let me ask you about the divestment program. The Finance Minister, in a conversation with us just the day before yesterday, said that the divestment process is going to kickstart very, very shortly. Do you believe that there is enough appetite given where the markets are? Do you believe foreign investors are going to be watching the government paper very closely?
U
Uday Kotak4:35
I think there is enough appetite. And I also respect the Finance Minister for the comment he made that he would like to see greater retail participation. I hope the government focuses, in addition to institutional investors—both global and domestic—on making sure more and more Indian savers come into financial savings by participating in government divestment.
R
Reporter4:57
But do you think it'll be a good idea to do mega issues like ONGC and Coal India together? Diversify them?
U
Uday Kotak5:03
Do them with a gap of about a month each, and I think the markets will take them.
R
Reporter5:08
What are foreign investors telling you about the India story? What do they like and what do they not like today?
U
Uday Kotak5:14
I think foreign investors are confident about the India story and feel more comfortable over the next 5 years. Yes, some of them expect the pace of change and reform faster than what the Indian political economy will give, and therefore you will see that having an impact on volatility on markets. But foreign investors, frankly, at this stage are much more concerned about many other places in the world, and on a relative basis India looks better.
R
Reporter5:40
But has there been a reality check, especially given what we've seen happen with the insurance bill? Have expectations now been tempered in terms of what can actually be done by this government, both in terms of executive action and legislative action?
U
Uday Kotak5:53
Which is why I say my final question to you. There on the transaction with FT as far as MCX is concerned, how soon do you expect regulatory approvals and what is the strategic rationale, given the controversy surrounding it, for you to want to do this?
R
Reporter6:09
We have taken a 15% financial stake. We are not allowed to buy more than 15% as per regulation. So we think it's a financial stake at this stage. And at this stage, which means that it could turn into something more. You never say never to anything more strategic later. That depends on how the events pan out, how the situation pans out. But we do believe the financial infrastructure space in India has tremendous potential, and we see both the government and the regulator wanting to make sure MCX as an asset is protected long term and it's a part of core Indian financial infrastructure.
U
Uday Kotak6:47
So when could that financial investment turn into a strategic investment for you?
R
Reporter6:53
Really, at this stage it is early. Right now we've just taken a financial call. As you know, we are putting in 459 crores into that, and we hope to close that sooner as soon as we can, subject to all the approvals. And we really think the Indian financial infrastructure space is in for a growth over a long period of time. Of course, it is subject to transaction taxes, subject to a whole host of macro factors particularly for the commodity markets. But all in all, we are confident that this is a marathon long-term play in the financial infrastructure space, and we are not trading investors. We want to hold the stake for the long term.