RBI Imposed restrictions on Kotak Mahindra Bank from Onboarding new customers and issuing fresh credit cards: The Reserve Bank of India (RBI), acting under Section 35A of the Banking Regulation Act, 1949, asked the private lender to stop and desist, effective immediately, from onboarding new customers through its online and mobile banking channels and issuing new credit cards. This request put shares of Kotak Mahindra Bank Ltd. in the spotlight on Thursday morning.
However, the RBI stated that Kotak Mahindra Bank may continue to offer its current clients services, including those related to credit cards.
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RBI Imposed restrictions on Kotak Mahindra Bank:
The Reserve Bank’s IT Examination of the bank for the years 2022 and 2023 raised serious issues, which the RBI stated made these steps necessary. The bank has been failing to address these problems thoroughly and promptly.
“IT inventory management, patch and change management, user access management, vendor risk management, data security, and data leak prevention were found to have significant flaws and non-compliances.”
tactics, business continuity plans, drills for disaster recovery, etc. The bank was found to have inadequate information security governance and IT risk management for two years in a row, which is against regulatory rules, the RBI stated.
The bank’s compliances were found to be either insufficient, inaccurate, or not sustained during the subsequent assessments, which revealed that the bank was significantly non-compliant with the Corrective Action Plans issued by the Reserve Bank for the years 2022 and 2023, according to the apex bank.