Asia’s richest banker Uday Kotak loses $1.3 billion after RBI’s ban
Uday Kotak built his Kotak Mahindra Bank Ltd. over decades to become Asia’s richest banker. After India’s regulator slapped his bank with a surprise ban, he’s facing one of his biggest tests yet — and a dip in wealth.
The lender’s shares tumbled as much as 13% on Thursday after it was barred from adding new customers through its digital channels and from issuing fresh credit cards. As the largest shareholder with a stake of almost 26%, the billionaire founder bore the heaviest brunt from the selldown, the most in four years.
That saw his wealth decline by $1.3 billion, according to the Bloomberg Billionaires Index. He was worth $14.4 billion as of April 24.
To add salt to the wound, rival Axis Bank Ltd. overtook Kotak’s market capitalization for the first time since Sept. 2016. Axis’ shares had surged after its earnings beat analysts’ estimates.
The Reserve Bank of India cited governance and risk issues about Kotak’s technology systems as reasons behind its ban. It found deficiencies and non-compliance in various processes over two years — from a lack of data security and leak prevention strategies to vendor risk management — according to a statement late Wednesday.
Kotak said in response that it has taken measures for “adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest.”
It’s not Kotak’s first run-in with the regulator. The billionaire previously took India’s central bank to court over the size of his stake in the
