Kotak Mahindra Bank Hits 52-week Low post-RBI Ban on On-boarding New Customers
Moneylife Digital Team 25 April 2024
Despite the top management of Kotak Mahindra Bank Ltd going into damage-control mode, its share continued to fall and hit its 52-week low of Rs1,602 on the National Stock Exchange (NSE). There was some recovery in the scrip, but still Kotak Mahindra Bank closed Thursday 10.73% down at Rs1,645. 
On Wednesday, Reserve Bank of India (RBI) asked Kotak Mahindra Bank to cease and desist, with immediate effect, from on-boarding new customers through its online and mobile banking channels and issuing fresh credit cards due to serious deficiencies related to information technology (IT) management of the lender. 
According to RBI, without a robust IT infrastructure and IT risk management framework, Kotak Mahindra Bank's core banking system (CBS) and its online and digital banking channels have suffered frequent and significant outages in the past two years. The recent service disruption occurred on 15 April 2024, resulting in serious customer inconveniences. Kotak Mahindra Bank is found to be materially deficient in building necessary operational resilience on account of its failure to build IT systems and controls commensurate with its growth, it added.
In the past two years, RBI says it has been in continuous high-level engagement with Kotak Mahindra Bank on all these concerns with a view to strengthening its IT resilience, but the outcomes have been far from satisfactory. "It is also observed that, of late, there has been rapid growth in the volume of Kotak Mahindra Bank's digital transactions, including transactions pertaining to credit cards, which is building further load on the IT systems."
"The Reserve Bank, therefore, has decided to place certain business restrictions on Kotak Mahindra Bank, in the interest of customers and to prevent any possible prolonged outage which may seriously impact not only the bank's ability to render efficient customer service but also the financial ecosystem of digital banking and payment systems," it added. (Read: Kotak Mahindra Bank Barred from Onboarding New Customers, Issue Fresh Credit Cards)
In a regulatory filing, Kotak Mahindra Bank says, "The Bank has taken concrete steps to adopt new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest. The Bank would like to reassure its existing customers of uninterrupted services, including credit card, mobile and net banking. The Bank's branches will continue to onboard new customers, providing them with all the Bank's services, except issuance of new credit cards."
On Thursday, Kotak Mahindra Bank opened at Rs1,665, nearly 10% down from the previous day's close of Rs1,842.80. Within a few minutes, it hit its day's high of Rs1,697.80 but then continued to fall before reaching its 52-week low of Rs1,602. The 50-share benchmark NIFTY ended the day 0.75% or 168 points up at 22,570.35 points.
2 months ago
The only notorious bank, who does not print rewards in credit card statement, neither does the app show it. You need to go to a different app to redeem and the points expires in 2 years.
Cheap way of cheating
Kamal Garg
2 months ago
In the interest of banking industry and financial ecosystem stability, RBI has taken right steps because no one listens to RBI for the last two years. Even HDFC Bank did not listen to RBI in 2020 and then RBI had to take stern steps to set things right.
2 months ago
What you mean by “let go off spinsorship in time”
2 months ago
Glad you let go off sponsorship in time
Is This Transformer Stock Highly Overvalued?
Moneylife Digital Team 24 April 2024
The transformer manufacturing industry in India is witnessing strong growth, driven by rising demand for transformers across various voltage classes. With India’s focus on renewable energy, companies in this sector are experiencing a...
IPO Review: JNK India Ltd
Moneylife Digital Team 23 April 2024
JNK India Ltd (JNK) is in the business of manufacturing process-fired heaters, reformers and cracking furnaces, collectively referred to as ‘heating equipment’, necessary for process industries like oil & gas refineries,...
Room AC Outsourcing Company on a Growth Path
Moneylife Digital Team 22 April 2024
The government of India (GoI) has undertaken a number of initiatives to promote the domestic manufacturing of room air-conditioners (RACs). In FY20-21, it banned the import of completely built and gas-charged units of ACs and has...
Can This Battery Manufacturer Reinvent Itself for the New Energy Era?
Moneylife Digital Team 22 April 2024
The electric vehicle (EV) industry is expected to keep expanding in the near future, as the world is shifting towards greener alternatives. Lithium-ion battery is its main component. As per consensus estimates, lithium-ion battery...
Free Helpline
Legal Credit