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PNB Scam Fallout: We Need An Efficient Financial System, Says Banker Uday Kotak

Kotak also said there is a case for trimming the number of state-run lenders.

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PNB Scam Fallout: We Need An Efficient Financial System, Says Banker Uday Kotak

At present, there are 20 public sector financial entities, Uday Kotak said.


Mumbai: The Indian banking system is in "stasis" and we need an efficient financial system which does not get impacted frequently, banker Uday Kotak said today.

In the remarks that come amid the discovery of the nearly Rs 13,000-crore scam at Punjab National Bank scam, one of the biggest in the Indian banking history, Kotak also said there is a case for trimming the number of state-run lenders.

"We can't be bogged down every few years, from time-to-time, where the system gets into a stasis like it is today," the executive vice chairman and managing director of Kotak Mahindra Bank said at the India Today Conclave here.

There was no explicit mention of the scam at PNB allegedly involving gems and jewellery players Nirav Modi and Mehul Choksi by Kotak, who maintained that he does not wish to get into any "political debate".

"We frankly need fewer public sector banks which may happen through mergers and shrinkage," he said.

At present, there are 20 entities, including largest lender State Bank of India, which are run by the government and account for nearly 70 per cent of the assets in the system. Almost all of them are affected by high levels of non-performing assets (NPAs).

Kotak has grown his bank to be the fourth largest in the private sector space by merging with ING Vysya Bank. The lender recently raised Rs 5,500 crore in core capital for various purposes including the possibilities of inorganic growth.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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