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Informist, Wednesday, Feb. 12, 2025

--RBI removes curbs on Kotak Mahindra Bank

--RBI: Kotak Mahindra Bank can now issue fresh credit cards

--RBI: Kotak Bank can now onboard customers via online, mobile banking

--CONTEXT: RBI had placed restrictions on Kotak Mahindra Bank in April

NEW DELHI – The Reserve Bank of India on Wednesday lifted the restrictions imposed on Kotak Mahindra Bank last year on issuing new credit cards and onboarding new customers digitally, with the central bank saying the private lender has taken remedial measures to address concerns.

"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," the RBI said in a statement.

Back in April last year, the central bank had barred Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards after an examination of the bank's information technology infrastructure had raised "significant concerns", with the bank also repeatedly failing to address the issues raised by the RBI.

"In the absence of a robust IT infrastructure and IT Risk Management framework, the bank's Core Banking System 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 Apr. 15, 2024, resulting in serious customer inconveniences. The bank is found to be materially deficient in building necessary operational resilience on account of its failure to build IT systems and controls commensurate with its growth," the RBI had said last year while imposing the restrictions.

Shares of Kotak Mahindra Bank ended 1.3% higher at INR 1,943.95 on the National Stock Exchange on Wednesday.  End

Reported by Siddharth Upasani

Edited by Saji George Titus

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