Statement on the recent Kotak Mahindra Bank issue by Siddarth Bhamre, Head of Research, Asit C Mehta Investment Interrmediates Ltd
Below the Statement on the recent Kotak Mahindra Bank issue by Siddarth Bhamre, Head of Research, Asit C Mehta Investment Interrmediates Ltd
The objective of any governing body is to provide ecosystem for sustainable growth by taking all stake holders into consideration. RBI is one of the most respected central banks in the world. It has time and again shown that it’s a proactive institution. Be it monetary policy or regulatory action, RBI has taken steps to mitigate systemic risk before it raises its ugly head.
Barring Kotak Mahindra Bank from opening fresh accounts online or issuing credit cards is not the first time RBI has cracked its whip on any big name. In 2020, it was HDFC BANK and very recently it was PAYTM which bore the brunt of RBIs measures to protect consumer interest. RBI has always ensured that penalizing doesn’t impact existing account holders or users of financial services adversely, otherwise such measures won’t serve it purpose. Enough time is given to consumers to switch to different institutions or the penal actions on banks have no impact on existing users. Even for financial institutions, the ban is not on a permanent basis. Once the institution in question takes the corrective measures, the regulator has allowed them to resume their operations.
Today, financial transactions are mostly driven by technology and as a watch-dog it is RBI’s responsibility to ensure a safe and secured digital environment. Institutions will have to invest in technology and will have to continue to update and upgrade with time. A secured user interface is a non-negotiable tool to achieve desired growth.
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