The Reserve Bank of India (RBI) has lifted the ban on digital customer onboarding and credit card issuance, nearly a year after imposing restrictions due to regulatory concerns.
These supervisory curbs were enforced on April 24, 2024, under Section 35A of the Banking Regulation Act, 1949, citing compliance lapses.
The RBI had halted new customer registrations via online and mobile banking and barred the issuance of fresh credit cards. Kotak Mahindra Bank implemented remedial measures and submitted compliance reports to the RBI. An external audit, approved by the RBI, validated the bank’s corrective actions.
After reviewing the audit findings and compliance submissions, the RBI found the bank’s corrective actions satisfactory and revoked the restrictions.
A spokesperson for Kotak Mahindra Bank expressed support for the Reserve Bank of India’s (RBI) decision to lift business restrictions on the bank, stating, “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.
Key Takeaways:
- New customers can now sign up via Kotak’s online & mobile banking platforms.
- The bank can resume issuing fresh credit cards.
- The move restores customer trust and boosts Kotak’s digital banking growth.
The RBI has formally communicated its decision to the bank, marking a major comeback for Kotak Mahindra’s digital services.
