Kotak Mahindra Bank Share Price Tumbles After RBI Restricts Online Onboarding and Credit Card Issuance
Kotak Mahindra Bank is assuring its customers that they can expect business as usual, even though the bank is reporting its quarterly earnings on May 4th, 2024. In other words, there will be no interruption to their banking services.
Kotak Mahindra Bank Share Price is down 5.4% so far this year, and things are likely to get even more attention for the bank in the coming days. This is because the Reserve Bank of India (RBI) has restricted them from adding new customers or issuing credit cards through online channels. This restriction is effective immediately.
In a nutshell, Kotak Mahindra Bank says the Indian central bank, RBI, has asked them to temporarily stop bringing on new customers online and issuing new credit cards. The bank assures customers it’s working on improving its computer systems and is collaborating with the RBI to get things back to normal quickly.
Kotak Mahindra Bank wants to assure its existing customers that even though they can’t sign up new customers online due to a directive from the Reserve Bank of India, existing services like credit cards, mobile banking, and net banking will all continue to function normally. They also clarified that customers can still visit branches to open new accounts, although they won’t be able to get new credit cards issued just yet.
The central bank, RBI, has restricted Kotak Mahindra Bank from adding new customers online and issuing new credit cards. This isn’t the end of the story though.
Review Based on Audit: The restrictions will be lifted once Kotak Mahindra Bank completes a thorough external audit approved by the RBI. This audit will identify and fix any problems found during the RBI’s inspection and the new audit.
- Potential for Further Action: The RBI also warns that these restrictions don’t prevent them from taking other actions against the bank.
- Reason for Restrictions: The RBI took this action because of serious concerns identified during their IT inspections of the bank in 2022 and 2023. The bank apparently hasn’t addressed these concerns effectively or quickly enough.
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