The Reserve Bank of India has directed Kotak Mahindra Bank to cease issue of fresh credit cards, with immediate effect. The Apex Bank has restricted the onboarding of new customers via online and mobile banking channels. According to the RBI press release, these actions are necessitated based on significant concerns arising out of the Reserve Bank’s IT Examination of the said Bank for the years 2022 and 2023 and the continued failure on the part of the Bank to address these concerns in a comprehensive and timely manner. It added that for two consecutive years, the said bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under Regulatory guidelines. It said that during the subsequent assessments, the bank was found to be significantly non-compliant with the Corrective Action Plans issued by the Reserve Bank for the years 2022 and 2023, as the compliances submitted by the said Bank were found to be either inadequate, incorrect or not sustained. It further added that the said Bank is materially deficient in building necessary operational resilience on account of its failure to build IT systems and controls commensurate with its growth. However, the RBI has allowed the bank to continue to provide services to its existing customers, including its credit card customers.
Disclaimer: This press release is sourced from News On AIR, Prasar Bharti and Press Information Bureau India (PIB).
