'Cease And Desist': RBI Bars Kotak Mahindra Bank From Onboarding New Customers Via Online, Issuing Fresh Credit Cards

'Cease And Desist': RBI Bars Kotak Mahindra Bank From Onboarding New Customers Via Online, Issuing Fresh Credit Cards

These actions, the RBI said, are necessitated based on significant concerns arising out of Reserve Bank's IT examination of the bank for the years 2022 and 2023 and the continued failure on part of the bank to address these concerns in a comprehensive and timely manner.

PTIUpdated: Wednesday, April 24, 2024, 04:58 PM IST
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Image: Kotak Mahindra Bank (Representative)

The RBI on Wednesday barred Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards with immediate effect as the lender found deficient in its IT risk management.

Non-Compliance Observed

These actions, the RBI said, are necessitated based on significant concerns arising out of Reserve Bank's IT examination of the bank for the years 2022 and 2023 and the continued failure on part of the bank to address these concerns in a comprehensive and timely manner.

"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, etc," the RBI's statement said.

Cease and Desist

For two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under Regulatory guidelines, it added.

The Kotak Mahindra Bank has been directed "to cease and desist", with immediate effect, from onboarding of new customers through its online and mobile banking channels and issuing fresh credit cards. The bank shall, however, continue to provide services to its existing customers, including its credit card users.

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