The Reserve Bank of India (RBI) has instructed Kotak Mahindra Bank to instantly stop onboarding new customers via its on-line and mobile banking channels and stop issuing new credit cards. This regulatory motion was taken due to considerations in regards to the financial institution’s compliance and danger administration practices.
However, RBI has directed Kotak Mahindra Bank to proceed offering providers to its current customers, together with its credit card customers.
“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 assertion learn.
The RBI’s determination was triggered by important deficiencies and non-compliances noticed through the central financial institution’s IT examination of Kotak Mahindra Bank for 2 consecutive years, 2022 and 2023. The financial institution persistently failed to tackle these considerations in a complete and well timed method.
The RBI famous severe shortcomings in areas corresponding to IT stock administration, patch and alter administration, person entry administration, vendor danger administration, information safety and information leak prevention technique, enterprise continuity and catastrophe restoration rigour and drill, amongst others.
Despite the RBI issuing corrective motion plans for each years, subsequent assessments revealed that the financial institution remained considerably non-compliant, with insufficient, incorrect, or unsustainable compliances submitted by the financial institution.
“In the past two years, the Reserve Bank has been in continuous high-level engagement with the bank on all these concerns with a view to strengthening its IT resilience, but the outcomes have been far from satisfactory. It is also observed that, of late, there has been rapid growth in the volume of the bank’s digital transactions, including transactions pertaining to credit cards, which is building further load on the IT systems,” RBI famous.
The Reserve Bank of India has mandated that the present limitations will bear an intensive evaluation following the conclusion of an intensive unbiased audit. This audit will likely be initiated by the financial institution, topic to prior authorization from the RBI. Furthermore, all shortcomings recognized through the exterior audit, in addition to the findings outlined within the RBI Inspections, have to be adequately addressed and rectified to the satisfaction of the Reserve Bank earlier than the restrictions will be lifted, the central financial institution has stated.
However, RBI has directed Kotak Mahindra Bank to proceed offering providers to its current customers, together with its credit card customers.
“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 assertion learn.
The RBI’s determination was triggered by important deficiencies and non-compliances noticed through the central financial institution’s IT examination of Kotak Mahindra Bank for 2 consecutive years, 2022 and 2023. The financial institution persistently failed to tackle these considerations in a complete and well timed method.
The RBI famous severe shortcomings in areas corresponding to IT stock administration, patch and alter administration, person entry administration, vendor danger administration, information safety and information leak prevention technique, enterprise continuity and catastrophe restoration rigour and drill, amongst others.
Despite the RBI issuing corrective motion plans for each years, subsequent assessments revealed that the financial institution remained considerably non-compliant, with insufficient, incorrect, or unsustainable compliances submitted by the financial institution.
“In the past two years, the Reserve Bank has been in continuous high-level engagement with the bank on all these concerns with a view to strengthening its IT resilience, but the outcomes have been far from satisfactory. It is also observed that, of late, there has been rapid growth in the volume of the bank’s digital transactions, including transactions pertaining to credit cards, which is building further load on the IT systems,” RBI famous.
The Reserve Bank of India has mandated that the present limitations will bear an intensive evaluation following the conclusion of an intensive unbiased audit. This audit will likely be initiated by the financial institution, topic to prior authorization from the RBI. Furthermore, all shortcomings recognized through the exterior audit, in addition to the findings outlined within the RBI Inspections, have to be adequately addressed and rectified to the satisfaction of the Reserve Bank earlier than the restrictions will be lifted, the central financial institution has stated.
