Why Uday Kotak thinks Jio’s entry into the financial services sector is a ‘good thing’

Ace banker and founder of Kotak Mahindra Bank, Uday Kotak, believes that Mukesh Ambani’s Jio’s entry into the financial services sector is a “good thing”. He said Jio Financial Services’ entry into the sector would keep its competition on edge, which is a good thing. Kotak also backed strong competition within sectors and emphasised on the importance of competitiveness. 

“Jio’s entry into financial services is a very good thing because you really want people in any sector to always be on the edge. The moment you get complacent, things don’t move. And being on the edge is critical for any company’s future. And I believe in the line “only paranoids survive”. If you are paranoid, you will survive, if you are not, you don’t need to be in the business,” he said, adding that he has great respect for what Reliance and other big business houses have created. He, however, underscored the importance of more players. 

Uday Kotak was speaking at the India Today Conclave Mumbai 2023. He said India needs free and fair markets, backed by policies that allow a competitive marketplace. We need a stronger role for the Competition Commission of India. “In the long run, I want to see many more Indians succeed,” said Kotak. 

The banker said that there is a significant concentration of new investments happening by only a few groups. “What India needs is to see many flowers bloom. Our policies must encourage many flowers to bloom. For eg, the telecom sector. Five years ago, there were 13 players, now at the best, we have two and a half. Airline industry is consolidated into two and a quarter, steel sector is two big guys and a lot of small guys,” he said, emphaising the need for more players. 

Kotak said that India’s competitiveness is something that we must look at. He said that tough questions must be asked, like why India has a net trade deficit with China close to $100 billion a year, why is it that we in India cannot manufacture, why India finds it cheaper to import from China.  “We need to ask our corporates. For all our strong fundamentals, why is it that corporate India is not able to compete with China?” he said.  

Uday Kotak further stated that the government is doing the right thing by increasing spending. He emphasised that along with increased government spending, India needs to create an environment where corporate India is ready to take big calls on investing into the future.

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