RBI removed Supervisory Restrictions on Kotak Mahindra Bank
The Reserve Bank of India (RBI) has now removed supervisory restrictions imposed on Kotak Mahindra Bank.
The removal of supervisory restrictions now allows bank to resume onboarding new customers through its online channels and issuing new credit cards.
Supervisory Restrictions on Kotak Bank
In the exercise of its powers under Section 35A of the Banking Regulation Act, 1949, RBI had imposed certain business restrictions on Kotak Mahindra Bank Limited (hereinafter referred to as ‘the bank’) on 24th April 2024.
After putting restrictions, the bank was directed to cease and desist from:
a. onboarding of new customers through its online and mobile banking channels.
b. issuing fresh credit cards.
However, it said that the bank would continue to provide services to its existing customers, including customers with credit cards.
Reason for Supervisory Restrictions
It stated that the actions were necessary due to major concerns raised by the Reserve Bank’s IT examination of the bank for the years 2022 and 2023, as well as the bank’s continuous failure to address these concerns comprehensively and quickly.
Removal of Supervisory Restrictions
In a press release, RBI said, “Subsequently, the bank initiated remedial measures to address the supervisory concerns and submitted compliances to the Reserve Bank. 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 Limited. A detailed communication has been issued to the bank in this regard.”
