Kotak Bank MD says in discussions with RBI, working to address concerns

A day after Reserve Bank of India asked Kotak Mahindra Bank to stop onboarding new customers through its online and mobile banking channels and issuing fresh credit cards, MD and CEO Ashok Vaswani said that the lender is in constant discussions with the regulator to address its concerns.

“We are actively working to address the concerns raised and are in constant communication with the regulator to resolve any issues promptly,” he said in a statement.

“Amid recent updates regarding the RBI’s directive to the bank, I want to reassure you of our services and address any concerns that may have arisen,” he added, highlighting that operations remain uninterrupted for existing customers across all channels including branches, bank accounts, credit and debit cards, ATMs, mobile and net banking facilities. 

On April 24, RBI had said that the sanctions were based on “significant concerns” arising out of IT Examination of the bank for 2022 and 2023 and the “continued failure on part of the bank to address these concerns in a comprehensive and timely manner”.

“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,” the central bank said in a strongly worded release.

It added that bank was deficient in its IT Risk and Information Security Governance for two consecutive years and was later also found to be “significantly non-compliant” with the Corrective Action Plans issued by RBI for 2022 and 2023.

RBI also highlighted that the rapid growth in the bank’s digital transaction volumes, including transactions pertaining to credit cards, adding that the restrictions will be reviewed upon completion of a comprehensive external audit.