India’s central bank lifts restrictions on Kotak Mahindra Bank onboarding customers online

BENGALURU: India’s central bank on Wednesday lifted restrictions on Kotak Mahindra Bank that had barred the lender from taking on new customers via its online and mobile banking channels and from issuing new credit cards.

In April, the Reserve Bank of India imposed business restrictions on the lender, asking it to stop adding clients through its online and mobile banking channels and issuing credit cards due to gaps in its IT infrastructure.

The RBI said the action was taken after its examination of Kotak’s IT systems in 2022 and 2023 raised concerns and Kotak failed to address them adequately.

Over the past year, the RBI has penalised regulated entities and imposed business restrictions on banks and non-banks that breached rules, while emphasising on protecting consumer interest and tightening risk controls.

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After the ban, Kotak Mahindra Bank appointed Grant Thorton Bharat as an external auditor for its IT systems.

The lender “beefed up” its internal tech team, with resources from Accenture, Infosys, Oracle and Cisco, Managing Director and Chief Executive Officer Ashok Vaswani had said.