"Good isn't as good and bad isn't as bad as they look" ; When things look good they are not as good as they look and when things look bad they are not as bad as they seem to be.

My lessons from the period of 2007-2009 is that when things lookgood they are not as good as they look and when things look bad theyare not as bad as they seem to be. If you go back to 2007, there washuge exuberance; and when you look at the end of 2008 there was hugepessimism.

My learning from these periods is to be able to ride exuberanceand a downturn with equanimity. This is the huge lesson that I takeback from last 2-3 years. The previous cycles weren't as sharp onboth sides.

In terms of our business, the lesson is to remain stable in termsof our approach to offerings and to customers. The most outstandingexample of this was in last October-November when every bank wastaking deposits at such high rates; these rates have halved now. Itwas important to have questioned those high rates then. We had put aceiling on the quantum of wholesale deposits we will offer (Kotakdid not specify what that ceiling was).

The good news for us is that in the worst part of the downturn wewere very liquid. We were net lenders in the inter-bank market andwe had positioned ourselves like that. We constantly met our retailinvestors and communicated to them that we were comfortable on theliquidity front. We also began to question every cost.

We used to change senior management cars every three years andnow we have decided that they will be changed only after four years.Anything that was perceived to be a waste was dramatically cut down.We also looked at the rentals of retail branches and avoided payingextremely high rentals. The most important thing we tried to do isto make sure that customer-facing businesses didn't face anyproblems.

Uday Kotak, 50, Executive Vice Chairman and MD, Kotak MahindraBank

(As told to Rachna M. Koppikar)