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Kotak Mahindra Bank cannot add new customers as per RBI order: Is your money in the bank safe?
Kotak Mahindra Bank: RBI's order means that Kotak Mahindra Bank cannot onboard new customers or issue fresh credit cards. What changes for existing customers?
Kotak Mahindra Bank was directed by the Reserve Bank of India (RBI) to stop onboarding any new customers through its online and mobile banking channels. The bank has also been barred from issuing fresh credit cards with immediate effect owing to deficiencies in its IT system in 2022 and 2023, as per the RBI. This means that Kotak Mahindra Bank cannot onboard new customers or issue fresh credit cards. But what does this mean for the bank's existing customers? What will change and what remains the same? HT explains:
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Will Kotak Mahindra Bank's existing customers face any issues?
The RBI said in its statement, ‘’The bank shall, however, continue to provide services to its existing customers, including its credit card customers.'' This means that existing customers of the bank can continue to use their credit cards and make account transactions online and offline without restrictions.
Why has RBI passed the order against Kotak Mahindra Bank?
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RBI said it found “serious deficiencies and non-compliances in 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" in Kotak Mahindra Bank.
"The bank is found to be materially deficient in building necessary operational resilience on account of its failure to build IT systems and controls commensurate with its growth," the central bank noted.
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Will RBI's order impact Kotak Mahindra Bank?
RBI's restrictions on Kotak Mahindra Bank may impact bank's customer acquisition targets. Pranav Gundlapalle, senior research analyst at AllianceBernstein told news agency Reuters, “The RBI's action is obviously going to impact the bank's ambition to get to a 15 per cent share of unsecured loans but the bigger impact is going to be on the savings accounts.”
