Raising concerns on the bank’s IT infrastructure, the Reserve Bank of India (RBI) has barred private sector lender Kotak Mahindra Bank from onboarding any new customers online and through mobile banking channels, and issuing new credit cards. The action has raised concerns and uncertainties among the bank’s existing customers. Here, we answer all your frequently asked questions.
Why has RBI taken this action?
RBI’s decision stems from significant concerns identified during IT examinations of Kotak Mahindra Bank in 2022 and 2023. The bank’s failure to address these concerns adequately and promptly led to the imposition of restrictions.
Will It Affect Kotak Mahindra Bank’s Existing Customers?
No. Existing services such as ATM cards, deposits, withdrawals, and locker services remain unaffected for current Kotak Mahindra Bank customers. The bank has assured uninterrupted services including credit card, mobile, and net banking facilities.
What If Your Credit Card Application Is Already Under Process?
Fresh credit card applications are affected by RBI’s restrictions. However, those whose applications were processed and approved before the restriction can receive their credit cards as usual.
However, the bank cannot entertain new credit card applications. The RBI has banned it.
Will You Be Able To Open Kotak’s 811 Account Now?
No. Kotak’s 811 bank account is an online available facility. However, after the RBI’s embargo, the bank has ceased and desisted, with immediate effect, from onboarding new customers through the bank’s online and mobile banking channels.
Can A Customer Open a New Bank Account By Visiting Kotak Branch?
Yes. Kotak Mahindra Bank branches are still open for new account openings, except for issuing new credit cards. However, new customers cannot open accounts online or through mobile channels due to the ban.
In the statement, the lender said, “The bank’s branches will continue to onboard new customers, providing them with all the bank’s services, except issuance of new credit cards.”
How Long Will RBI Restrictions On Kotak Mahindra Bank Continue?
RBI’s restrictions will be reviewed after a comprehensive external audit and remediation of deficiencies. While no specific timeline is provided, it’s estimated to take between 6 to 12 months. Kotak Mahindra Bank said it is actively working to strengthen its IT systems to resolve the issues promptly.
By adhering to these clarifications, Kotak Mahindra Bank aims to address the concerns raised by the RBI and ensure a swift resolution for its customers.
“These directions shall be reviewed by RBI upon satisfactory remediation of the observations. 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,” Kotak Mahindra Bank has said without sharing any timeline.
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