The Reserve Bank of India (RBI) has instructed Kotak Mahindra Bank to halt the onboarding of new customers through digital channels and to temporarily stop issuing new credit cards due to deficiencies in the lender’s IT systems.
According to the RBI, examinations conducted on Kotak Mahindra’s systems in 2022 and 2023 identified issues that remain unresolved. The central bank stated that “for two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance.”
The RBI’s findings revealed serious deficiencies in IT inventory management, patch and change management, user access management, vendor risk management, data security, and business continuity planning.
Kotak Mahindra, the fourth largest private lender in India, announced that it has “taken measures to adopt new technology to strengthen its IT systems.” Existing customers will not be affected by these actions, and new customers can still visit branches for onboarding.
In a similar case in 2020, the RBI took action against HDFC Bank, preventing it from adding new credit card accounts or launching new digital banking products after a protracted IT outage.