All quotes attributed to Uday Kotak ……….

“I really think banks are becoming much more a technology play than people estimate it to be. In India, many bank branches survive because of the need for cash in businesses. Other than that, there is a big question mark on the future of bank branches. You need enough branches for people to feel comfortable that the bank exists. But 10 years from now, many more transactions will happen without the need for or existence of branches.”

“In my 25 years of building this business, I have learnt that embracing change is about creative death. In every organisation you need Brahma, Vishnu and Mahesh — the creator, preserver and destroyer. Most of the time when you start getting successful there are too many Vishnu’s and you will not find as many Mahesh’s. But to continue to be successful in a changing world you need all three.”

“As a firm grows and becomes more successful, exiting becomes more difficult; however, if you don’t cannibalise your own products, someone else will.”

“…. if something looks too good to be true, it is too good to be true. Our mantra, therefore, is that when something looks very good, don’t go after it. Get into a business when it is out of fashion. The worst time to enter a business is when it is in high fashion.”

“……….in business as in life, there is a very thin line between conviction and foolhardiness.”

“From an investment banking perspective you need to offer what investors want at all times, but as a lender you need to decide if it makes sense for you.”

“My most important realisation as a banker is something very basic. As a bank, say, we have ₹10 of capital and we borrow₹100. If we lose ₹5 out of ₹110, we have lost 50% of our money; if we lose ₹10 out of ₹110, it’s time to go home.Bankers find it difficult to keep this principle in mind; most of the time, they believe they own ₹110. Equity is a very small portion of the total balance sheet of banks but bankers start believing they have control and ownership over all the assets. They don’t: it is other people’s money. If you go back globally and see the kind of lifestyles bankers lived, they lived at 50:1 leverage. They were living on borrowed money and on borrowed time. That arrogance comes from believing that you own all that leverage as your own money.”

“If I were put it very simply, the key principles in banking are really about three important human qualities. First, no excessive leverage, which is prudence. Second, no disruptively creative products, which is simplicity. Third, no arrogance. If you keep prudence, simplicity and humility as the three binding principles of banking, then through good and bad times you will be fine.”