₹ ₹1,658.75 apiece on the BSE. RBI on Wednesday directed Kotak Mahindra Bank to cease onboarding new customers through its online and mobile banking channels and issuing fresh credit cards with immediate effect. The central bank has barred the private sector lender from new issuances due to deficiencies in the bank’s IT system in 2022 and 2023.
Kotak Mahindra Bank believes that these directions will not materially impact its overall business “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," Kotak Mahindra Bank said in a stock exchange filing. Read here: RBI bars Kotak Mahindra Bank from adding new customers; Is your money in the bank safe? The bank’s branches will continue to onboard new customers, providing them with all the bank’s services, except issuance of new credit cards, it added.
Analysts believe the RBI restrictions would adversely impact Kotak Mahindra Bank’s growth. They expect the restrictions will be reviewed upon completion of external audit and corrective action plan to RBI’s satisfaction which typically takes 6-12 months. “We believe such restrictions should impact business growth, including Kotak Mahindra Bank’s already dwindling CASA ratio (down 13% from its peak to ~48%) and its new card acquisition; this will lead to earnings being hit in the medium term.
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