RBI directs Kotak Mahindra Bank to halt onboarding new online customers
THE JHARKHAND STORY DESK Advertisement New Delhi, April 24: Kotak Mahindra Bank has been directed by the Reserve Bank of India…
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THE JHARKHAND STORY DESK
New Delhi, April 24: Kotak Mahindra Bank has been directed by the Reserve Bank of India (RBI) to immediately halt issuing new credit cards and stop onboarding new customers through its online and mobile banking platforms.
Concerns over the bank’s compliance and risk management procedures led to the adoption of this regulatory action.
Nevertheless, the Reserve Bank of India (RBI) has instructed Kotak Mahindra Bank to maintain services for its current clientele, which includes its credit card holders.
“The Reserve Bank of India has today, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949, directed Kotak Mahindra Bank Limited (hereinafter referred to as ‘the bank’) to cease and desist, with immediate effect, from (i) onboarding of new customers through its online and mobile banking channels and (ii) issuing fresh credit cards. The bank shall, however, continue to provide services to its existing customers, including its credit card customers,” the RBI said in a statement.
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IT compliance failures by Kotak Mahindra Bank
The RBI’s directive stemmed from notable deficiencies and non-compliances identified during the central bank’s IT examination of Kotak Mahindra Bank in both 2022 and 2023. Despite repeated occurrences, the bank consistently failed to adequately and promptly address these concerns.
“Serious deficiencies and non-compliances were observed in the areas of IT inventory management, patch and change management, user access management, vendor risk management, data security and data leak prevention strategy, business continuity and disaster recovery rigour and drill, etc. For two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under Regulatory guidelines,” RBI added.
