The Reserve Bank of India (RBI) on February 12 said it has removed the supervisory restrictions imposed on Kotak Mahindra Bank Limited. The restrictions, initially enforced on April 24, 2024, under Section 35A of the Banking Regulation Act, 1949, required the bank to cease onboarding new customers through its online and mobile banking platforms and to halt the issuance of fresh credit cards.
The RBI’s directive was a response to supervisory concerns identified during regulatory reviews. In response, Kotak Mahindra Bank undertook comprehensive remedial measures to address these issues. The bank not only submitted compliance reports to the RBI but also commissioned an external audit with the central bank’s prior approval to validate these measures, the RBI said.
After a thorough review of the bank’s submissions and the external audit findings, the RBI has expressed satisfaction with the remedial actions taken by Kotak Mahindra Bank. Consequently, the central bank has decided to lift the restrictions, allowing the bank to resume onboarding new customers through digital channels and to issue fresh credit cards, the RBI said.
A detailed communication outlining this decision has been sent to Kotak Mahindra Bank, marking a significant step in the bank’s regulatory compliance journey, the RBI said.
“We welcome the Reserve Bank of India’s (RBI) decision to lift the business restrictions on Kotak Mahindra Bank. This decision follows the Bank’s successful implementation of remedial measures and compliance validation through an external audit. We will continue to work closely with the RBI to shortly resume digital onboarding of new customers and issuing fresh credit cards,” said a spokesperson of Kotak Mahindra Bank in a statement.