RBI Lifts Curbs on Kotak Mahindra Bank
Why in the news
Ten months after clamping restrictions on Kotak Mahindra Bank, RBI withdrew them once remedial steps and compliance checks were complete.
Key facts
- Reason for curbs: persistent failure to fix serious deficiencies and non-compliance in IT management; outages in 2022 and 2023 hurt customers.
- Order type: cease and desist, meaning stop an activity under an order.
- Now allowed: digital customer acquisition and credit card issuance.
- Not relaxed: limits on Paytm Payments Bank.
Steps taken
| Step | Detail |
|---|---|
| Remedial action | Bank addressed RBI’s supervisory concerns |
| Outside audit | Commissioned with RBI’s prior approval to verify compliance |
| Outcome | RBI withdrew the curbs |
Bank’s response
- Welcomed the decision and promised compliance.
- Plans to restart digital onboarding and credit card issuance soon, with greater focus on digital expansion.
Exam angle
- Regulator: RBI; bank: Kotak Mahindra Bank.
- Issue: IT management lapses.
- Still restricted: Paytm Payments Bank.