RBI removes ban on Kotak Mahindra Bank's online customer onboarding
What's the story
The Reserve Bank of India (RBI) has removed the restrictions it had earlier imposed on Kotak Mahindra Bank, preventing it from acquiring new customers through its digital channels.
The restrictions, which also included a ban on issuing new credit cards, were first imposed by RBI on April 24, 2024.
The Mumbai-based lender was directed to stop all new customer registrations through its online, mobile banking.
Compliance efforts
Kotak Mahindra Bank's remedial actions led to restriction removal
In response to the RBI's restrictions, Kotak Mahindra Bank took corrective measures and submitted compliance reports to the central bank.
The bank also conducted an external audit, approved by the RBI, to verify these compliances.
The RBI said it was satisfied with the bank's submissions and remedial actions, which is why it decided to lift the previously imposed restrictions on Kotak Mahindra Bank.
Concerns
What were RBI's concerns with Kotak?
While imposing ban on Kotak in April 2024, RBI said, "Serious deficiencies and non-compliances were observed in the areas of 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, etc."
"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."