Uday Kotak, the founder of Kotak Mahindra Bank, who stepped down as the bank’s managing director and chief executive officer in September, has shared his perspective on taking financial risks. According to the veteran banker, financial risks should only be undertaken when one fully comprehends the subject.
In an interview with the Financial Times, Kotak emphasized the principle that has guided Kotak Mahindra Bank for the past 40 years: “If you do not understand something, do not do it.” He highlighted the importance of humility in acknowledging when a concept is not understood, stating, “Very often finance professionals will give you very complex structures. I think it requires humility to say ‘I do not understand it, therefore I will not do it.’ It is better to be stupid now than sorry later.”
Uday Kotak, aged 64, retains a 26 percent stake in Kotak Mahindra Bank, one of India’s leading private sector banks. Last month, the bank announced the appointment of industry veteran Ashok Vaswani as Kotak’s successor. While Vaswani brings extensive experience from top banks like Citigroup and Barclays, there are concerns among analysts about whether he can effectively fill the void left by Kotak’s departure as the MD and CEO.
Despite these concerns, Kotak expressed confidence in Vaswani, describing him as a “world-class leader and banker with digital and customer focus” in a social media post on October 21.
In the trading session on November 13, Kotak Mahindra Bank’s shares settled at ₹1,748.35 on the BSE, experiencing a 0.22 percent decrease compared to the previous day’s close.
