Mumbai: The Reserve Bank of India (RBI) has prohibited Kotak Mahindra Bank from onboarding new customers through digital platforms and issuing new credit cards. This decision comes after the bank consistently failed to fix problems with its IT systems for two years, despite multiple warnings from the RBI.
The directive took effect immediately after the stock market closure on Wednesday, citing “serious deficiencies and non-compliances” in Kotak’s IT operations. Kotak Mahindra Bank, in turn, assured that the issues will be resolved quickly and that customers will not face any interruptions in services.
During this period, Kotak branches will continue onboarding new customers for other banking services, and working on improving its IT systems by collaborating with the RBI. The restrictions will remain in place till an external audit takes place and determines that all deficiencies and non-compliances have been rectified.
The RBI has placed similar restrictions against other institutions like Paytm Payments Bank, Bank of Baroda, HDFC Bank, IIFL Finance and JM Financial Products.
Kotak Mahindra Bank has been dealing with problems in its IT systems, which have caused repeated interruptions in its banking services. The bank will now undergo a thorough external review of its systems. The bank’s future operations and reviews will depend on fixing these issues effectively.
