Kotak Mahindra Bank
The Reserve Bank of India (RBI) has directed Kotak Mahindra Bank to halt the process of onboarding new customers through its online and mobile banking platforms, as well as to cease issuing fresh credit cards. However, existing customers, including those with credit cards, will continue to receive services from the bank, as per the RBI’s order.
The RBI’s decision comes as a response to significant concerns raised during the bank’s IT examination for the years 2022 and 2023. Despite these concerns, the RBI notes a continued failure by Kotak Mahindra Bank to adequately address these issues in a timely and comprehensive manner.
The directive from the RBI means that Kotak Mahindra Bank customers will no longer be able to apply for new credit cards or open accounts through mobile banking channels.
The RBI’s decision to bar Kotak Mahindra Bank stems from serious deficiencies and non-compliances observed in various areas, including IT inventory management, patch and change management, user access management, vendor risk management, data security, data leak prevention strategy, business continuity, and disaster recovery preparedness.
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The central bank highlights that the bank has been found lacking in its IT Risk and Information Security Governance for two consecutive years. Particularly concerning are the frequent and significant outages experienced by the bank’s Core Banking System (CBS) and its online and digital banking channels over the past two years, including a recent service disruption on April 15, 2024, which resulted in substantial inconvenience to customers.
