The Indian bank controller, Reserve Bank of India (RBI), has taken serious action against Kotak Mahindra Bank.
RBI has stopped Kotak Mahindra Bank from getting new customers online or on mobile. Also, RBI won’t allow Kotak Bank to issue new credit cards.
However, RBI mentioned that existing customers, including those with credit cards, will still get all services.
RBI released a statement saying that during the IT check-up for 2022 and 2023, there were worries about Kotak Mahindra Bank’s performance.
The bank couldn’t fix these worries on time. RBI explained that because the bank’s IT system
and management weren’t strong enough, there were many times when the bank’s online and digital services stopped working in the last two years.
Just recently, on April 15, 2024, services stopped, causing trouble for the bank’s customers.
RBI says Kotak Mahindra Bank didn’t improve its IT systems as it grew. Over the last two years, RBI talked a lot with the bank’s top bosses to fix these issues, but it didn’t work out well.
RBI noticed a big rise in digital transactions at the bank, including credit card use. This made the IT systems too busy.
So, RBI decided to limit the bank’s business to protect customers from long outages.
This is important because if the bank’s services stop, it won’t just affect customers but also the bank’s finances and digital payment systems.
