RBI barred Kotak Mahindra Bank from onboarding new customers online and through mobile banking platforms. Therefore,now Kotak is prohibited from issuing any new credit card.

Cause Behind the RBI action

Kotak Mahindra Bank faced serious problems with managing its IT systems and ensuring data security, according to the central bank. Moreover, for two years straight, the bank failed to meet the standards set by the RBI for IT risk management and information security. Additionally, Even after being given plans to address these issues, the bank still hadn’t fixed them. The bank needed to revise, correct, or maintain the reports submitted to the RBI consistently. Moreover, the issues occurred due to the bank’s failure to set up strong enough IT systems and controls to handle its growth. 

Impact on Existing Customers
Due to the RBI’s decision, there won’t be any impact on existing Kotak Mahindra Bank accounts. Consequently, the bank assures its customers that they can continue using services like credit cards, and Net banking without any interruptions.

In Addition What Kotak Mahindra Bank said 

Kotak Mahindra Bank said that its branches will continue to provide their customers with all banking services, except for issuing new credit cards. “We want to reassure our existing customers of uninterrupted services, including credit card, mobile, and net banking. Our branches continue to welcome and onboard new customers. Providing them with all the Bank’s services, apart from issuance of new credit cards,”
“The Bank has taken measures for adoption of new technologies to strengthen its IT systems. It will continue to work with RBI to swiftly resolve balance issues at the earliest.  We want to reassure our existing customers of uninterrupted services, including credit card, mobile, and net banking.

A message for our valued customers pic.twitter.com/BmhDePZNyG

— Kotak Mahindra Bank (@KotakBankLtd) April 25, 2024