The Indian banking system is in "stasis" and we need an efficient financial system which does not get impacted frequently, banker Uday Kotak said on Friday.
In the remarks that come amid the discovery of thenearly Rs 13,000-crore scam at Punjab National Bank scam, one of the biggest in the Indian banking history, Kotak also said there is a case for trimming the number of state-run lenders.
"We can't be bogged down every few years, fromtime-to-time, where the system gets into a stasis like it istoday," the executive vice chairman and managing director of Kotak Mahindra Bank said at the India Today Conclave.
There was no explicit mention of the scam at PNB allegedly involving gems and jewellery players Nirav Modi and Mehul Choksi by Kotak, who maintained that he does not wish toget into any "political debate".
"We frankly need fewer public sector banks which may happen through mergers and shrinkage," he said. At present, there are 20 entities, including largestlender State Bank of India, which are run by the governmentand account for nearly 70 per cent of the assets in thesystem. Almost all of them are affected by high levels ofnon-performing assets (NPAs).
Kotak has grown his bank to be the fourth largest inthe private sector space by merging with ING Vysya Bank. The lender recently raised Rs 5,500 crore in core capital forvarious purposes including the possibilities of inorganicgrowth.