Marking 40 years of Kotak Mahindra Bank, Founder Uday Kotak reflects on how a 26-year-old with modest capital, a contrarian vision, and an early partnership with Anand Mahindra built one of India’s most trusted financial institutions long before the word “startup” entered the country’s business vocabulary.

In 1985, India was still a heavily regulated financial system. “Banking was 97% state-owned. Interest rates were fixed — borrowers paid 17% while depositors earned just 6%,” he recalled. SMEs supplying to large corporations struggled to raise funds even at those high rates. Kotak spotted the inefficiency and built his first business around solving it.

“We started by doing bill discounting. The arbitrage banks enjoyed was 11%, so we said let’s give that benefit to consumers,” he explain

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