24 April 2024
The Reserve Bank of India, the banking sector’s regulator, has taken serious action against Kotak Mahindra Bank. The RBI has prohibited the bank from acquiring new clients and issuing credit cards using online or mobile banking channels. However, the regulator mentioned in its mandate that it can continue to provide services to its existing customers, including credit cardholders.
According to the Reserve Bank, this action was taken in response to shortcomings discovered in Kotak Mahindra Bank’s IT risk management and information security administration.
According to the RBI’s announcement, these actions were taken in response to inadequacies discovered in the bank’s IT testing by the regulator between 2022 and 2023. The regulator stated that the bank failed to address key issues raised during the tests in a comprehensive and timely manner.
According to the RBI statement, the bank’s IT inventory management, patch and change management, user access management, vendor risk management, data security and leak prevention strategy, strictness and drills for business continuity and disaster recovery were found to have serious deficiencies and compliance issues.
The bank’s IT risk and information security governance were found to be weak for two years in a row, which violated regulatory criteria.
According to the RBI, Kotak Mahindra Bank has been told to “cease” registering new customers and issuing new credit cards through its online and mobile banking platforms, effective immediately. However, the bank will continue to serve its existing customers, including credit cardholders.
