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Kotak on Hold: RBI Blocks New Online Customers Due to IT Mismanagement
Mumbai: The Reserve Bank of India (RBI) imposed a ban on Kotak Mahindra Bank (KMB) from accepting new customers through online and mobile platforms or issuing new credit cards. This decision, announced on April 24, stems from ongoing concerns identified during the bank’s IT examinations for the years 2022 and 2023. Despite repeated warnings, KMB has failed to address these issues adequately, prompting the RBI to take action.
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Serious Deficiencies in IT Management
The central bank’s examinations revealed significant flaws in several areas of the bank’s IT operations, including inventory management, data security, and risk management. These deficiencies led to frequent service disruptions, the most recent of which occurred on April 15, 2024, causing considerable inconvenience to customers. The RBI noted that KMB’s inability to uphold a strong IT infrastructure has severely impacted its Core Banking System and digital banking channels.
Existing customers of KMB will continue to receive services, and the bank is working to resolve these issues to meet the regulatory standards set by the RBI.