As banks hit crisis mode, Uday Kotak says rebuilding trust needs 3 players

Billionaire banker Uday Kotak believes that the Indian banking sector is going through its biggest challenge — loss of customer confidence.

It is probably the question on most of our minds: ‘What’s happening in the banking industry? ’ And it was this query that Infosys co-founder Nandan Nilekani put forward to Uday Kotak, executive chairman of Kotak Mahindra Bank, during a recent event.

Kotak, on his part, did not shy away from speaking his mind. “The banking industry is going through one of its most significant challenges even as we talk,” he said. “And it brings me to a very important point, that finally, in the banking business, you must have a focused approach to ensure that the money you give out comes back.”

Vice-Chairperson and Managing Director of Kotak Mahindra Bank Uday Kotak speaks, as Infosys Co-Founder & Non-Executive Chairperson Nandan Nilekani looks on, during a press conference in Mumbai. (Image: AP)

He added, “Banking is one business where errors of commission are far more expensive than errors of omission. And in that kind of a business, you have to have a fundamental quality of prudence, simplicity and humility.”

Kotak even took a query from the audience, about what can be done to bring back faith in the banking industry. “The thing about trust is that it takes a long time to build and even a little mistake takes a lot of it away. Rebuilding trust and confidence requires significant nurturing of the system and the participation of three players — practitioners, regulator and the policy-makers.”