Does the fact that the nation of savers is turning to a nation of spenders, have an impact when the market or the economy turns around?
That is what you call ‘the wealth effect’. If you feel wealthy, you spend more. The most appropriate example is of the US homes business. From 2000 onwards, the real estate rates kept escalating and the home owner borrowed more and more. When the downturn hit in 2006, the behaviour began to change. One of the major engines for Indian GDP growth is domestic consumption. We believe that an 8% growth can be sustainably achieved by India. This requires very large consumption growth, for long periods of time.
We talk about banks and Indian financial companies going international. Is the time appropriate? Is the demand in India substantial?
The financial sector in India, undoubtedly, is one of the finest opportunities anywhere in the world. India is sitting on a significant opportunity,based and

driven by domestic consumption. Internally, I have a very simple matrix for what the international business should be like:
• Indian financial instruments or Indian products for Indian customers.
• Indian products for global customers – servicing FIIs on the institutional side, or foreigners investing in Indian assets.
• Global products for Indian customers – investment banking, convertible bonds, acquiring overseas business or investing overseas.
• Global product for global customers.
At this stage we want to operate in the first three areas. These are aligned to a significant strategic integration. At Kotak, in five years, we should have 20 to 25% of our business linked to the global situation.
Is the concept of Gramin Bank, which won the Nobel this year, viable for India?
Kotak: I believe that banking and financial services in the Indian context are not just about commercial opportunities.