In the world of finance, few names resonate as powerfully as that of Uday Kotak. For over three decades, he has been the force behind Kotak Mahindra Bank, transforming it from a fledgling institution into the third-largest private sector bank in India. This is the tale of a man who started with a 300 sqft office and a handful of employees in the mid-eighties, venturing into the finance world in an era when India's economy was still finding its stride.
On September 2, 2023, Asia's wealthiest banker, aged 64, announced his resignation in a heartfelt handwritten letter addressed to the bank's chairman, Prakash Apte.As reported by CNBV-TV18, the bank has submitted two names to the RBI as potential successors for Uday Kotak without specifying whether they are internal or external candidates. As the leadership baton passed, Joint Managing Director Dipak Gupta assumed the role of Chief Executive Officer until December 31.
Uday noted, sharing the news on X, "Succession at Kotak Mahindra Bank has been foremost on my mind, …and I am committed to ensuring a smooth transition. … I initiate this process now and voluntarily step down as CEO."
Reflecting on the journey, Uday recalled when global financial giants like JP Morgan and Goldman Sachs inspired his dream of establishing a similar financial institution in India. He remarked, "It is with this dream that I started Kotak Mahindra 38 years ago, with just three employees in a 300 sqft office in Fort, Mumbai."
Uday Kotak's journey in the world of finance began in 1985 as an aspiring entrepreneur, during a period when India's economy remained largely closed. He obtained a banking license in 2003, becoming one of the early private entrants into India's banking sector, traditionally dominated by government-owned banks. Over the years, he diversified the bank's portfolio, delving into various financial services, including bill discounting, stockbroking, investment banking, car finance, life insurance, and mutual funds.
During 2014, Kotak's fortunes soared as shares of Kotak Mahindra Bank reached an all-time high following his $2.4 billion acquisition of rival ING Vysya Bank in November 2014. By August 2019, he had become one of the highest-paid CEOs in the Indian banking sector.
Over the years, Kotak has played roles in various government initiatives, serving on the government's high-level committee on financing infrastructure and the market advisory committee of SEBI.
Uday’s vision for the future of Kodak
Outlining his vision for the future of Kotak Mahindra Bank in the 2023 annual report, Uday mentioned three priorities: product excellence, customer obsession and trust “We, at Kotak, are in the midst of this mindset shift for these priorities." He also expressed his aspiration to contribute to the Indian dream of achieving a USD 30 trillion economy while advocating for a nuanced approach to financial sector regulation.
Kotak noted that the bank is actively working to attract and nurture talent, both from within and outside the organisation, to better serve its stakeholders. He mentioned that he can see positive changes in how people think and act within the bank. He also pointed out that the bank had not only created substantial value for stakeholders but had also become a cornerstone employer, providing approximately 100,000 direct jobs and a multitude of indirect employment opportunities.
The journey taken in the name of environmental, social, and governance (ESG) responsibility, Uday added in the report, has resulted in higher ESG ratings and recognition through various awards.
He discussed how the company is working to increase the gender diversity of its workforce and how, beginning in April 2023, it will support single parents and new mothers by providing infant daycare services.
As of March 31, 2023, the total Assets Under Management (AUM) for the Kotak Group had soared to over ₹4,20,800 crore, with remarkable growth of approximately 125% year-on-year in its alternate assets book, reaching ₹46,077 crore (inclusive of undrawn commitments, where applicable).
What’s next for Uday?
As the news of Uday’s departure reverberated, accolades —and speculations about his next phase started pouring in. Co-founder of BharatPe, Ashneer Grover, expressed, "Few people have created wealth in the last three decades for shareholders and employees like you have, Uday. And given many more bankers and founders to India!".
Investor and startup mentor Ajay Bagga offered his admiration, stating, "You have created a rich legacy for future Indian enterprises and future Indian leaders to follow. ...I hope there is a second inning for you in the service of the nation."
Swapnil Srivastav, founder of Kidbea, a bamboo-based Kid's Fashion-Tech Brand, hailed Kotak's indomitable spirit. "Your legacy is a testament to what can be achieved with passion and perseverance."
"What a legacy you are leaving behind. India actually needs more visionary and great leaders like you," wrote Private Banker Saurabh Saraswat.
Investor and social worker Girish Arora, acknowledging Kotak's commitment to ethical banking, stated, "...appreciate your fantastic track record as a great banker, particularly with so many scams and wrongdoings happening in banking. You have remained a role model for millions."