Winning Bizness Desk

Mumbai. The Reserve Bank of India (RBI) has lifted the restrictions imposed on Kotak Mahindra Bank, allowing the lender to resume onboarding new customers via online and mobile banking channels, as well as to issue new credit cards. These restrictions were initially imposed in April 2024 due to significant gaps identified in the bank's IT infrastructure.

Background of the Restrictions

In 2022 and 2023, the RBI conducted examinations of Kotak Mahindra Bank's IT systems and discovered serious deficiencies. The bank was found lacking in areas such as IT inventory management, patch and change management, user access management, vendor risk management, data security, and business continuity planning. Due to the bank's failure to address these concerns adequately, the RBI imposed restrictions in April 2024, halting the onboarding of new customers through online and mobile platforms and suspending the issuance of new credit cards.

Remedial Measures Undertaken

Following the RBI's directive, Kotak Mahindra Bank implemented several remedial measures to address the identified deficiencies. The bank appointed Grant Thornton Bharat as an external auditor for its IT systems and strengthened its internal technology team by collaborating with firms such as Accenture, Infosys, Oracle, and Cisco. These efforts were aimed at enhancing the bank's IT infrastructure and ensuring compliance with regulatory standards.

RBI's Decision to Lift Restrictions

After reviewing the remedial measures and compliance submissions, the RBI expressed satisfaction with the steps taken by Kotak Mahindra Bank. Consequently, the central bank decided to lift the previously imposed restrictions, allowing the lender to resume onboarding new customers through its online and mobile banking channels and to issue new credit cards. This decision underscores the importance of robust IT infrastructure and governance in the banking sector to protect consumer interests and maintain systemic stability.