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- RBI REMOVES Restrictions on Kotak Mahindra Bank Onboarding Customers Online
New Delhi7 minutes ago
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The Reserve Bank of India i.e. RBI has lifted the ban on Kotak Mahindra Bank on Wednesday (February 12). On 24 April 2024, the Reserve Bank of India directed Kotak Mahindra Bank to stop the issuance of new credit cards with immediate effect. Along with this, there was a ban on connecting new customers through online and mobile banking channels.
Explaining the reason for imposing this ban on the bank, the RBI had said that between 2022 and 2023 it had expressed its concern for the bank about not having enough IT infrastructure, but the bank had been constantly failing to overcome these deficiencies.
Under Section 35A of the Backing Regulation Act 1949, RBI took this action against Kotak Mahindra Bank using its power. However, those who already have customers of the bank will continue to get all the services as before.
RBI said three big things
- The RBI found serious deficiencies in areas such as the bank’s IT Inventory Management, User Access Management, Vendor Risk Management, Data Security and Data Leak Prevention Statged. This was seen for two consecutive years, but the bank could not take any concrete steps.
- In the absence of strong IT infrastructure, the bank’s core banking system (CBS) and its online and digital banking channels have been seen continuously in the last two years. The latest outage took place on 15 April, causing inconvenience to the customers.
- Now the sanctions imposed will be reviewed after the bank’s external audit. For this external audit, the bank will have to get the RBI approval in advance. The bank will also have to remove all the deficiencies mentioned in RBI’s inspiration and external audit.
