Life is not a template and neither is mine. Like several who have worked as journalists, I am a generalist in my over two decade experience across print, global news wires and dotcom firms. But there has been one underlying theme in each phase; life gave me the chance to observe and tell a story -- from early days tracking a securities scam to terror attacks and some of India's most significant court trials. Besides writing, I have jumped fences to become an entrepreneur, as an investment advisor -- and also taught the finer aspects of business journalism to young minds. At Forbes India, I also keep an eye on some of its proprietary specials like the Rich list, GenNext and Celebrity lists. An alumnus of Xavier Institute of Communications and H.R College of Commerce and Economics in Mumbai, I have worked for organisations such as Agence France-Presse, Business Standard, The Financial Express and The Times of India prior to this.
Uday Kotak, founder, managing director and CEO of private sector Kotak Mahindra Bank has stepped down from his post with effect from September 1, the bank announced in a corporate filing to the exchanges. This comes as an unexpected move, as Kotak was anyway scheduled to resign from his post on December 31 this year.
Dipak Gupta, the joint managing director at Kotak Mahindra Bank, has taken charge as an interim arrangement. Gupta’s own term is also set to expire in December.
Kotak will now continue to be associated with the bank as a non-executive director.
Gupta, a Kotak Mahindra Bank veteran since 1992 and a full time director of the bank since 1999 will continue as interim chief, subject to approval from the RBI and the Bank’s board. He has overseen various functions at the bank including internal audit and IT including cyber security and digital initiatives, at the Bank.
After stepping down, billionaire banker Uday Kotak took to X (formerly Twitter) to upload a hand-written letter to Prakash Apte, chairman of the bank and the board of directors, saying, “It is now time to move on. Although I still have a few months to go, I tender my resignation…” the note says.
“With a view to sequencing this process from a transition and stability perspective, I have decided to take this action, after completion of the financial year and the AGM for FY23.”
Not shying to put his family name to an institution, on the lines of JP Morgan, Goldman Sachs and Morgan Stanley, Uday Kotak had done the same with NBFC Kotak Mahindra Finance, which in 2003 got a banking licence to then be converted into a bank, Kotak Mahindra Bank. It is the only Indian private sector lender which retains the family names of its promoters.
Building an institution and a legacy
Kotak has been admired for building an institution nearly four decades ago, which has become a byword for credibility and growth in the Indian banking industry. Today, Kotak is India’s tenth richest Indian – and 132nd in the world -- according to the Forbes 2023 Billionaires list, with a net worth of $13.3 billion.
Kotak’s ability to grow the bank was already well recognised in the 2000s. Much of the credit should also go to his long-standing ‘team-mates’ including Gupta, Jaimin Shroff, Shankti Ekambaram, C. Jayaram and KVS Manian, most of whom have been associated with Uday Kotak for decades.
But Uday’s masterstroke was after he successfully completed a $2.4 billion all-stock acquisition of ING Vysya Bank in 2015.
Kotak’s leadership has also been well recognised when he lead a newly structured board of debt-ridden IL&FS, which, in 2018, heightened the risk of a systemic crisis of the country’s financial sector, after it went bankrupt for failing to honour debt it owed to banks and other lenders.
Kotak had been parachuted by the government to help clean up the books of IL&FS. In 2022, about Rs 56,000 crore (or 55 percent) of the IL&FS Group’s outstanding debt of Rs 99,000 crore had been resolved. In June 2023, reports said IL&FS had paid a total debt of Rs 28,848 crore as of FY23.
Kotak has also held a leadership position with the Confederation of Indian Industry (CII) in 2020-21.
Battle over promoter’s stake
But the veteran banker has had a rather frosty relationship with the regulator RBI, over matters relating to promoter shareholding in a bank. In the ten years to 2018, there were several emails and had escalated when Kotak moved the Bombay High Court in December 2018 against an RBI’s diktat on promoter holding in banks.
The RBI had always wanted promoters to reduce their stake in the institutions they led, while Kotak felt otherwise. The matter was finally settled in 2020, and Kotak reduced his stake in the bank in phases. Uday Kotak and the promoter group holds a 25.7 percent stake in the bank, as of June 2023, just under the mandated 26 percent level.
In his exit note, Kotak said the bank has taken the necessary steps for the proper transition and it awaits the Reserve Bank of India’s approval for the new leader.
He said that personal matters including his elder son’s marriage was on the cards, which would keep him pre-occupied in coming months.
Kotak had a tinge of emotion in his exit note. “I stand in a lonely place of being a founder, promoter and significant shareholder of this great institution. It also bears our family name and carries that as its brand. I am committed as a stakeholder to see this institution sustain and grow.”