"While ratings are a matter of opinion, what is contained in them is something we need to keep in mind, so that we don't have a sharp increase in cost of borrowing by Indians or Indian companies from the overseas markets, as also a sharp withdrawal of money, should there be significant drop in financial stability parameters," the banker said.
Kotak, managing director and CEO of Kotak Mahindra Bank, took over as CII
president on Wednesday from Vikram Kirloskar.
On the issue of waiver of interest during the moratorium period, the CII
president said Kotak said banks have an obligation to serve depositors, both on principal and interest, even when borrowers get moratorium.
"Banks are intermediaries between depositors and borrowers. So, we (cannot) have a situation where borrowers get moratorium, banks have an obligation to serve depositors both on principal plus interest. Therefore, we cannot have a one-sided contract where we allow moratoriums on interest to the borrowing side," said Kotak.
In a departure from established practice, the CII
president did not release GDP growth
estimates for the current year, arguing that the impact of the pandemic is still being understood.
”It is fair to reasonably presume that in the current year, considering we had a long lockdown, the estimates on the negative side may have veracity. There may be some negative growth for the year”, he said.
Kotak also argued for focus on the digital and technology-oriented sectors, which will see resurgence in activity and jobs.
The ongoing Covid-19 crisis has shaped CII's overall objectives for the year, he said. The chamber has sought to push for protection of lives and livelihood, increasing public spending on health and education, and environmental sustainability in 2020-21, above and beyond economic interests.
Kotak stressed that the Prime Minister's call for self-reliance is a necessity, but this would need to be based on quality and competitiveness of India's products, and not on protectionism.
By extension, Kotak said India should be open to trade with China - a major global power - yet remain strong on issues like dumping of excess Chinese capacity.
He invited Corporate India to raise capital without fussing over ”nickels and dimes”; and better manage risk, given the stock market has recovered substantially from the lows it fell to in late March.