Six years ago Kotak Mahindra converted itself into a full-fledged commercial bank and Nariman Point branch was its very first one. In this six year Kotak Mahindra has seen an unprecedented global boom and an unprecedented global collapse and in all those six years Uday Kotak’s main philosophy has been one of conservatism. But will that continue as Kotak Mahindra positions itself in the changing world of global finance. In the last one year the world has changed; the banking industry has changed and so have India’s fortunes.

Uday Kotak, VC and MD, Kotak Mahindra Bank, said India should get back to 8% over the next two-three years provided the global GDP (Gross Domestic Product) does not slip dramatically from where it is.

He said the bank is focussed on building its loan book by about 10-15% in FY10.

Kotak said, “I think this is a game changer and at some level this I think this is an opportunity to change world history. India has the ability because of the strength and resilience of its domestic economy to now begin to gradually decouple itself. India has to define its destiny in the financial sector. We got to be careful that we do not continue to have our minds be disproportionately influenced by dogmas of Western financial sector. “

A western financial sector that no longer exists as we knew it. That tectonic shift in the global banking industry accompanied with crashing markets world over and slowing growth have redefined banking and redefined risk. In India four events underscore the perils of that four letter word ‘Risk’. More Indian borrowers are going delinquent than ever before. But that seems minor compared to three corporate calamities. The Rs 7,000 crore fraud at Satyam, the collapse of retail chain Subhiksha due to alleged misgovernance - Kotak Mahindra Bank is one of the lenders to the private equity funded company and has moved court with a winding down petition. And corporate exuberance in deal making at a time when commodities, markets and asset values were at their highest.

In July 2008 Uday Kotak said in an interview “The Indian government & business, to a certain extent did fall prey to exuberance which is now getting seriously affected”

Words that hit home last month when Ratan Tata, who’s Tata Group, did 39 acquisitions in the last four years including the purchase of struggling auto company Jaguar-Land Rover, told a British newspaper,  “If one had known there was going to be a meltdown then yes Tata went too far, but nobody knew. Both the acquisitions were made, I would say, at an inopportune time in the sense that they were near the top of the market in terms of price.”

Here is a verbatim transcript of the exclusive interview with Uday Kotak, Dipak Gupta, Falguni Nayar and C Jayaram on CNBC-TV18. Also watch the accompanying video.

Uday Kotak: Satyam is a great example to start with. I sit back and wonder whether if Mr. Raju had not tried to do the merger and and or confessed - would the system have ever found out what he was up to? And what he did for seven years - could he have gone on for a long time? And at the heart of this governance, I believe is the question about integrity of course, of promoters but also of third parties whether it’s auditors or rating agencies. And, we really need to go to the heart of this because a capital market system can sustain itself only if some of these very foundations of governance are in place.

On a situation like Subhiksha - first, let me clarify that we are relatively smallest exposures compared to most other banks. There are about 20-25 of them. Again at some level, we need to ask the question - whether there were issues which are deep rooted to how managements run Indian companies? And we got to ask these questions pretty deeply.