Uday Kotak says India's financial sector headed for consolidation

Speaking at a virtual interaction, Uday Kotak emphasised that the financial sector must have adequate capital risk management expertise

Moneycontrol News

July 23, 2020 / 18:48 IST

Uday Kotak

Kotak Mahindra Bank Managing Director Uday Kotak on July 23 said Indian financial sector is heading for consolidation because of the asset risk that it carries, asserting that capital is going to be critical amid the COVID-19 crisis.

Speaking at a virtual interaction, he emphasised that the financial sector must have capital risk management expertise and an ability to govern institutions on a sustainable basis.

"Financial sector on a broader basis, without getting into the public sector or private sector, is heading for greater consolidation because of asset risk which it is carrying and over time capital is going to be critical," he said.

Earlier this month, Reserve Bank of India (RBI) Governor Shaktikanta Das had also said banks need to raise capital on an anticipatory basis to build up adequate capital buffers to mitigate risks arising out of coronavirus outbreak.

Das had said building buffers and raising capital will be crucial not only to ensure credit flow but also to build resilience in the financial system.

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