Good news for Kotak Mahindra customers: RBI lifts business restrictions effective immediately
Good news for Kotak Mahindra customers: RBI lifts business restrictions effective immediately
You can now open a new Kotak Mahindra Bank 811 account via the online platform and mobile app, as well as apply for the bank’s credit cards.
The Reserve Bank announced on February 12, 2025, that it has removed the previously imposed restrictions on Kotak Mahindra Bank Limited. Customers can now open new Kotak Mahindra 811 Bank Accounts via online and mobile banking platforms, as well as apply for new credit cards from Kotak Mahindra Bank.
RBI has removed the earlier restrictions on the bank effective immediately.
“The bank initiated remedial measures to address the supervisory concerns and submitted compliances to the Reserve Bank. The bank also commissioned an external audit, with prior approval of RBI, to validate the compliances. Now, having satisfied itself based on the submissions, and remedial measures undertaken by the bank, the Reserve Bank, has decided to lift the aforementioned restrictions placed on Kotak Mahindra Bank Limited,” said RBI in a press release dated 12th February 2025.
Kotak Mahindra Bank was placed on the Reserve Bank of India’s restricted list due to specific business limitations imposed on April 24, 2024. The bank was instructed to stop onboarding new customers via its online and mobile banking platforms, as well as to halt the issuance of new credit cards. This information was disclosed in a press release from the RBI on the same date.
“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,” RBI had said in a press release in 2024.
Over the last two years, the RBI maintained ongoing high-level discussions with the bank regarding these issues, aiming to enhance its IT resilience. However, the results have not met expectations. Additionally, it has been noted that there has been a significant increase in the bank’s digital transaction volume recently, particularly in credit card transactions, which is placing additional strain on the IT systems.
“In the absence of a robust IT infrastructure and IT Risk Management framework, the bank’s Core Banking System (CBS) and its online and digital banking channels have suffered frequent and significant outages in the last two years, the recent one being a service disruption on April 15, 2024, resulting in serious customer inconveniences,” RBI had further said in a statement.
The RBI has opted to impose specific business restrictions on the bank, due to these reasons, to safeguard customer interests and avert any potential extended disruptions. Such disruptions could significantly affect the bank’s capacity to provide effective customer service and jeopardize the overall financial ecosystem of digital banking and payment systems.
Spokesperson of Kotak Mahindra Bank says: “We welcome the Reserve Bank of India’s (RBI) decision to lift the business restrictions on Kotak Mahindra Bank. This decision follows the Bank’s successful implementation of remedial measures and compliance validation through an external audit. We will continue to work closely with the RBI to shortly resume digital onboarding of new customers and issuing fresh credit cards.”
