The Reserve Bank of India announced the lifting of restrictions that had limited Kotak Mahindra Bank’s ability to onboard new customers through online channels and issue fresh credit cards. Originally enforced on April 24, 2024, under Section 35A of the Banking Regulation Act, these measures were a response to concerns raised during IT examinations conducted in 2022 and 2023.
In an official statement, the RBI detailed that Kotak Mahindra Bank had taken significant remedial steps to address supervisory concerns. The bank not only submitted the required compliances but also commissioned an external audit—with the RBI’s prior approval—to verify that it met the necessary regulatory standards.
The removal of these restrictions marks a positive turnaround for Kotak Mahindra Bank following its previous challenges, which had resulted in an immediate halt on digital onboarding and new credit card issuance. The bank’s proactive approach in resolving these issues has not only met the RBI’s criteria but has also contributed to a modest increase in its share price, reflecting market approval of the bank’s corrective actions.