Kotak Bank reveals how Indian banks fail to keep up with Modi's ambitions
Narendra Modi wants to export India’s digital payments system to the world. That plan now risks stumbling as clunky technology used by Indian lenders fails to keep up with his ambitions.
In recent years, the fastest-growing major economy has invested in a vast ecosystem of technologies to increase financial inclusion and pull hundreds of millions of Indians into the digital marketplace. Today, the nation’s homegrown payments system, United Payments Interface, or UPI, is used to pay for practically everything, from expensive jewelry to a 10-rupee cup of piping hot tea.
Also Read: RBI asks Kotak Mahindra Bank to stop issuing fresh credit cards, onboarding fresh customers via mobile banking
Yet Indian lenders are still saddled with old technologies, burdening banks as they expand their digital offerings and handle a greater number of deposits. India’s government hasn’t minced words about its concerns. Finance Minister Nirmala Sitharaman has urged financial institutions to modernize and ensure that the domestic financial system “remains uncompromised.” Last December, officials asked state-owned banks to shore up cybersecurity and strictly enforce the know-your-customer process when onboarding new businesses.
Also Read: Kotak Mahindra Bank is the latest student in RBI's classroom
Lately, regulatory ire has focused on Kotak Mahindra Bank Ltd., one of India’s largest private lenders. Earlier this month, system glitches disrupted cash withdrawals and digital transactions, prompting the Reserve Bank of India to bar Kotak
