Uday Kotak wants you to move away from banks, keep Japan at the back of mind
Uday Kotak, the founder and director of Kotak Mahindra Bank, wants you to move away from banks in a bid to create sustained growth story. You heard that right.
In so called year-end musings, Kotak highlighted a changing landscape where savers are transforming into investors, presenting challenges for the banking sector regarding deposits and funding costs.
«As savers become investors the banking sector faces challenges on its deposits and cost of funds. The large corporate sector has to meaningfully move to capital markets (debt and equity) and away from banks,» Kotak wrote on a Twitter post.
«Banks will become distributors of corporate debt rather than storage houses. They will need to penetrate mid sized corporates, MSMEs and consumers,» he added.
He also said that we need to keep Japan of the 80s at the back of our mind.
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Kotak urged vigilance against market bubbles. Referring to the prolonged stagnation of Japan's Nikkei Index even after 34 years, he stressed the importance of policies, regulations, education, and the supply of high-quality investments to prevent similar situations.
Addressing taxation issues, Kotak pointed out the need for a relook at double taxation on dividends, drawing a parallel between shareholders and partners regarding taxation principles. He also stressed the necessity of bridging the gap between debt and equity tax rates to encourage market growth.
Expressing concerns over the potential distortion caused by low-cost leverage through derivatives, Kotak highlighted the importance of attention to prevent market imbalances.
Moreover, Kotak
