Following the Reserve Bank of India’s directive that prohibited Kotak Mahindra Bank from enrolling new customers online and issuing fresh credit cards due to concerns over data security and IT infrastructure, the bank on Wednesday announced its commitment to enhancing its technological capabilities and fortifying its IT systems.
Assuring existing customers of uninterrupted services, the bank has stated that new customer onboarding will be facilitated at its branches.
In a statement, Kotak Mahindra Bank said, “We have received an order from the RBI which directs us to temporarily pause onboarding of new customers though our online and mobile banking channels and issuance of fresh credit cards. The Bank has taken measures for adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest.”
It added, “We want to reassure our existing customers of uninterrupted services, including credit card, mobile and net banking. Our branches continue to welcome and onboard new customers, providing them with all the Bank’s services, apart from issuance of new credit cards.”
Also Read: RBI bars Kotak Mahindra Bank from onboarding new customers, issuing credit cards
Earlier in the day, the central bank highlighted a series of serious deficiencies and non-compliances uncovered during its IT examinations, encompassing issues such as IT inventory management, patch and change management, user access management, vendor risk management, data security, and business continuity measures.
Furthermore, the persistent non-compliance with regulatory guidelines regarding IT risk and information security governance by Kotak Mahindra Bank over consecutive years worsened the situation.
The RBI underscored that the bank’s core banking system (CBS) and digital banking channels have experienced frequent and significant outages over the past two years, culminating in a notable service disruption on April 15, 2024, causing significant inconvenience to customers.
Moreover, investigations revealed a lack of operational resilience stemming from the failure of Kotak Mahindra Bank to develop IT systems and controls commensurate with its expansion.
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