RBI lifts ban on Kotak Mahindra Bank nearly after 10 months
13 Feb 2025, 11:46 PMIn April last year, the RBI restricted Kotak Mahindra Bank from onboarding new customers through online channels and issuing new credit cards.
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The Reserve Bank of India (RBI) has lifted its 10-months old order restricting Kotak Mahindra Bank from onboarding new customers through online channels and issuing new credit cards.
Last year in April, the central bank decided to cease and desist Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels. It also barred the lender from issuing fresh credit cards.
Lifting the ban, the RBI said that the bank has taken measures to address the flagged supervisory concerns and submitted compliances to it. The regulator also underlined that Kotak Bank has undergone an external audit to validate these compliances.
In a statement, the RBI said, “The bank also commissioned an external audit, with prior approval of RBI, to validate the compliances. Now, having satisfied itself based on the submissions, and remedial measures undertaken by the bank, the Reserve Bank, has decided to lift the afore-mentioned restrictions placed on Kotak Mahindra Bank Limited.”
“Serious deficiencies and non-compliances were observed in the areas of IT inventory management, patch and change management, user access management, vendor risk management, data security and data leak prevention strategy, business continuity and disaster recovery rigour and drill,” the RBI had said last year.
RBI has been increasing its scrutiny of banks and financial institutions over the years. Last year we also witnessed the central bank’s crackdown on Paytm, ceasing Paytm Payments Bank’s operations by March 15. The reasons included persistent compliance issues and supervisory concerns, including violations of customer due diligence rules.
In 2020, the RBI notified similar restrictions on HDFC Bank, barring from launching its digital business-generating activities and from sourcing new credit card customers. This restriction on HDFC Bank were lifted almost two years later in 2022.
Recently, the central bank announced rolling out an exclusive internet domain, ‘bank.in’, for Indian banks to combat financial fraud.
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