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Supervisory Action against Kotak Mahindra Bank Limited under Section 35A of the Banking Regulation Act, 1949 The Reserve Bank of India has today, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949, directed Kotak Mahindra Bank Limited (hereinafter referred to as the bank)to cease and desist, with immediate effect, from (i) onboarding of new customers through its online and mobile banking channels and (ii) issuing fresh credit cards.The bank shall, however, continu
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FAQ :
The RBI has banned Kotak Mahindra Bank from onboarding new online customers due to significant concerns identified in the bank's IT examination for 2022 and 2023, including serious deficiencies in IT risk management and information security governance.
The RBI identified serious deficiencies in areas such as IT inventory management, patch and change management, user access management, vendor risk management, data security, data leak prevention, and business continuity and disaster recovery.
No, existing customers, including credit card holders, will continue to receive services from Kotak Mahindra Bank.
The restrictions were imposed because the bank failed to address the identified IT and security concerns comprehensively and in a timely manner, leading to frequent and significant outages in its online and digital banking channels.
The restrictions will be reviewed and potentially lifted upon the completion of a comprehensive external audit commissioned by the bank, with RBI approval, and the satisfactory remediation of all identified deficiencies.
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