Kotak Mahindra Bank tumbles after RBI bars Bank from onboarding new customers online, issuing credit cards
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Kotak Mahindra Bank is currently trading at Rs. 1643.45, down by 199.60 points or 10.83% from its previous closing of Rs. 1843.05 on the BSE.
The scrip opened at Rs. 1675.00 and has touched a high and low of Rs. 1689.45 and Rs. 1620.00 respectively. So far 1971151 shares were traded on the counter.
The BSE group 'A' stock of face value Rs. 5 has touched a 52 week high of Rs. 2063.00 on 31-May-2023 and a 52 week low of Rs. 1620.00 on 25-Apr-2024.
Last one week high and low of the scrip stood at Rs. 1845.50 and Rs. 1620.00 respectively. The current market cap of the company is Rs. 328404.53 crore.
The promoters holding in the company stood at 25.90%, while Institutions and Non-Institutions held 60.99% and 13.11% respectively.
The Reserve Bank of India (RBI) has directed Kotak Mahindra Bank to cease and desist, with immediate effect, from (i) onboarding of new customers through its online and mobile banking channels and (ii) issuing fresh credit cards. The bank shall, however, continue to provide services to its existing customers, including its credit card customers.
These actions are necessitated based on significant concerns arising out of Reserve Bank’s IT Examination of the bank for the years 2022 and 2023 and the continued failure on part of the bank to address these concerns in a comprehensive and timely manner. Serious deficiencies and non-compliances were observed in the areas of IT inventory management, patch and change management, user access management, vendor risk management, data security and data leak prevention strategy, business continuity and disaster recovery rigour and drill, etc. For two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under Regulatory guidelines. During the subsequent assessments, the bank was found to be significantly non-compliant with the Corrective Action Plans issued by the Reserve Bank for the years 2022 and 2023, as the compliances submitted by the bank were found to be either inadequate, incorrect or not sustained.
The restrictions now being imposed will be reviewed upon completion of a comprehensive external audit to be commissioned by the bank with the prior approval of RBI, and remediation of all deficiencies that may be pointed out in the external audit as well as the observations contained in the RBI Inspections, to the satisfaction of the Reserve Bank. Further, these restrictions are without prejudice to any other regulatory, supervisory or enforcement action that may be initiated against the bank by the Reserve Bank.
