Big companies should stay away from banks, know why Uday Kotak said this
Uday Kotak, the country’s richest banker, and founder of Kotak Mahindra Bank, said that to achieve 9 percent growth annually and make India a $30 billion economy by 2047, big companies should stay away from banks. He says that the banking sector is facing many challenges due to savers becoming investors. Kotak said that we need to keep in mind the Japan of the 1980s. Japan’s economy was once growing at rocket speed but has been at a standstill since the 1980s.
Kotak said these things in a tweet on the occasion of the end of the year. He said, ‘With savers becoming investors, the banking sector is facing many challenges in terms of deposits and cost of funds. The large corporate sector needs to move towards capital markets and move away from banks. He said that instead of becoming storage houses, banks will become distributors of corporate debt. They will need to sit between medium companies, MSMEs, and consumers. He also said that we need to keep in mind the situation of Japan in the 1980s.
Stay in japan
Kotak said that we need to be cautious of market bubbles. Citing the stagnation in Japan’s Nikkei index for the last 34 years, he said that to avoid this situation, we have emphasized policies, rules, education, and supply of high-quality investment. He also appealed to review the double taxation on dividends. He also stressed reducing the difference between debt and equity tax rates to promote market growth. Kotak said that it is very important to organize the process of financing, IBC and NCLT for acquisitions. Also, the country needs to avoid retrospective tax and regulatory systems. Also, read this.