Uday Kotak stresses on banking independence, raises concerns over corporate house involvement

Analysts from Macquarie earlier expressed concerns over the potential uncertainty stemming from Mahindra's intentions to further invest in RBL Bank. Given Mahindra's primary focus on the automobile industry, the move to acquire stakes in the banking sector raised eyebrows. The acquisition's implications for Mahindra's core business and its capital allocation approach prompted discussions among financial experts.

Kotak's address sheds light on the historical backdrop of large banks formed from institutions backed by corporate houses, resulting in inherent conflicts of interest even without direct corporate lending. These concerns become even more pertinent considering the risks associated with contagion within the banking system.

At the banking summit, Uday Kotak also emphasised the current robustness of India's financial sector and recommended a strategic focus on developing fresh capacities and capabilities, while prudently handling risks. He said that he believes that India can become a $30 trillion economy by 2047 led by the financial sector.