The Reserve Bank of India has directed Kotak Mahindra Bank to cease issuing fresh credit cards and onboarding new customers through online and mobile banking channels.
In a press release, the RBI said that “these actions are necessitated based on significant concerns arising out of the Reserve Bank’s IT examination of the Kotak Mahindra Bank for the years 2022 and 2023 and the continued failure on the part of the bank to address these concerns in a comprehensive and timely manner.”
“The said bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under regulatory guidelines,” the statement said.
According to the RBI, Kotak Mahindra Bank did not comply with the “corrective action plans” issued by the apex bank for the years 2022 and 2023.
Kotak was also found to be “materially deficient in building necessary operational resilience on account of its failure to build IT systems and controls commensurate with its growth.”
However, the RBI has allowed the bank to continue providing services to its existing customers, including its credit card customers.
