Kotak Mahindra Bank is prohibited by RBI from accepting new customers via online and mobile banking

The Reserve Bank of India (RBI) on Wednesday barred private sector lender Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels, and from issuing fresh credit cards.

“The bank shall, however, continue to provide services to its existing customers, including its credit card customers,” the RBI said in a statement on April 24.

These actions were necessitated based on significant concerns arising out of the RBI’s IT examination of the bank in 2022 and 2023 and the bank’s continued failure to address these concerns in a comprehensive and timely manner, the RBI said.

“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,” the RBI said.

It said the business restrictions were being placed in the interest of customers and to prevent any possible prolonged outage which may seriously impact not only the bank’s ability to render efficient customer service but also the financial ecosystem of digital banking and payment systems, the RBI said.