Following the Reserve Bank of India's (RBI) decision on Wednesday to prohibit Kotak Mahindra Bank from acquiring new customers online and issuing fresh credit cards immediately, the top management has initiated damage-control measures.
Reportedly, Chief Executive Officer and MD Ashok Vaswani addressed Kotak Mahindra Bank employees in a letter aimed at easing their concerns regarding the RBI's stringent measures against the bank. In the communication, he assured the management's commitment to promptly address the issues highlighted in the RBI investigation.
In his letter, Vaswani, the recently appointed CEO following Uday Kotak, acknowledged the rapid expansion of digital business, stressing the necessity for upgraded technological infrastructure. He underlined the bank's ongoing investments in enhancing tech infrastructure and bolstering the resilience of its platforms.
The CEO has also assured that Kotak Mahindra Bank will continue to onboard new customers via non-digital channels and across all products other than credit cards.
According to the RBI order, business restrictions were imposed on Kotak Mahindra Bank in the interest of customers, citing deficiencies in its IT risk and information security governance.
The RBI said that stringent measures were implemented to safeguard consumers and prevent potential prolonged outages, which could significantly disrupt not only the bank's ability to deliver efficient customer service but also the broader financial ecosystem of digital banking and payment systems, as stated in the RBI order.
Kotak Mahindra Bank has additionally released a statement expressing its commitment to collaborating with the RBI to address issues promptly. The bank announced plans to conduct a thorough audit of its IT systems, subject to approval and supervision by the RBI.
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