RBI has lifted the restrictions imposed on Kotak Mahindra Bank. The bank was directed to stop adding new customers and issuing new credit cards through its online and mobile banking channels.
Kotak Mahindra Bank: The Reserve Bank of India (RBI) has lifted the restrictions imposed on Kotak Mahindra Bank. In April 2024, RBI had imposed certain business restrictions on Kotak Mahindra Bank Limited exercising its powers under Section 35A of the Banking Regulation Act, 1949. The bank was directed to stop adding new customers and issuing new credit cards through its online and mobile banking channels.
Why was the action taken
In April 2024, RBI had said that these actions have been taken after serious deficiencies were found in Kotak Mahindra Bank’s IT risk management, information security operations. This step was necessitated after the concerns generated by the bank’s IT investigation for the year 2022 and 2023 and the bank’s continued failure to deal with these concerns in a timely and correct manner. In such a situation, the bank was directed to stop and stop adding new customers and issuing new credit cards through its online and mobile banking with immediate effect.
HDFC Bank was also banned
In December 2020, RBI had also banned HDFC Bank from issuing new cards and launching new digital initiatives after repeated technology-related glitches. However, this ban was lifted in March 2022.
How were the December quarter results
Kotak Mahindra Bank’s profit increased by 10.22 percent to Rs 4,701 crore in the December quarter. The bank’s profit has increased due to the good performance of its capital market units. The bank’s profit was Rs 4,265 crore in the same quarter of the previous financial year and Rs 5,044 crore in the July-September 2024 quarter.
The bank’s total income rose to Rs 16,050 crore in the quarter under review, from Rs 14,096 crore in the same quarter of the previous fiscal. The company’s expenses stood at Rs 10,869 crore in the December quarter, from Rs 9,530 crore in the same quarter of the previous fiscal.
