Veteran banker Uday Kotak said that even though non-bank lenders have sighed a relief since crisis the crisis that hit late last year, the sector is still fragile than it was a year ago. Kotak had been leading the tasks of saving debt-ridden infrastructure lender IF&FS. Kotak observed that though there was a lot of pressure in the NBFC sector last year between October and November, yet there is a little breather this year, which still needs working.
Kotak reasoned that the stress in the NBFC sector is due to the rise in interest rates which has arisen due to the space in liquidity concerns as high growth in financial savings post-demonetization began to go back as currency in circulation. IL&FS, which has a debt over 90,000 crore was the first major default which led to apprehension of ‘Lehman-like crisis’ in India.
Kotak who is the Vice Chairman and MD of Kotak Mahindra Bank took up the task of heading IL&FS as part of ‘national duty’. He confidently said that the financial sector will weather the tough economic crisis through consolidations in bank balance sheets and thus take steps towards ensuring stability. Kotak also said that though all the businesses he heads are fundamentally going good, yet he expressed his displeasure over the bank scrip rising only 20%.