Kotak Mahindra Bank CEO Uday Kotak believes that even as global turmoil continues to hurt financial markets, “macro factors are turning better for India”.

What Happened? Kotak, who is also the executive vice chairman and managing director of Kotak Mahindra Bank, noted in a tweet that India’s “current account deficit looks below 2.5%” for the 2023 financial year, and is set to drop “below 2% in FY24”.

The billionaire banker adds that lower oil prices have also helped the economy.

“If we walk our talk and navigate well, India can stand out in this turbulence,” remarked Kotak.

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Why it Matters? In case you’re wondering, the current account deficit or CAD of a nation maintains a record of the country’s transactions with other nations in terms of trade in goods and services, net profits on foreign investments, and net transfer of remittances over time. This current account goes into a deficit when money sent out exceeds that coming inward.

CAD is thus often viewed as a critical parameter to evaluate the banking sector’s health in the face of a global crisis.

Meanwhile, Uday Kotak’s comments on Twitter arrive on the back of a collapse of two key banks in the U.S. The collapse of Silicon Valley Bank and Signature Bank, New York has rattled the banking sector across continents, sparking fears of a contagion that could lead to the next global financial crisis.

Both banks were shut after a run on deposits, which drove fears that the panic could also cause a run on other regional banks.

Photo by World Economic Forum on Flickr

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