The Reserve Bank of India (RBI) has taken regulatory action against Kotak Mahindra Bank. As of recent reports, the RBI has directed the bank to stop onboarding new customers through its online and mobile banking channels. Additionally, the bank has been instructed to cease issuing new credit cards with immediate effect.
This decision comes after the RBI found significant deficiencies in the bank's IT risk management during their examination. The issues identified include non-compliances in areas such as IT inventory management, patch and change management, user access management, vendor risk management, data security, and data leak prevention strategy, among others.
It's important to note that existing customers of Kotak Mahindra Bank, including credit card holders, will not face any service disruptions and can continue to use their services as usual. The bank is required to address these concerns in a comprehensive and timely manner to meet the regulatory standards set by the RBI.
The immediate halt on onboarding new customers through online and mobile banking channels will likely slow down the bank's customer growth, especially in the digital space where most new customers are acquired nowadays.
Such regulatory actions can affect the bank's reputation among stakeholders, including customers, investors, and partners. It may lead to a loss of trust and confidence in the bank's ability to manage risks, particularly IT and data security risks.
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