The Reserve Bank of India (RBI) has directed Kotak Mahindra Bank to cease on-boarding new customers through its online and mobile banking channels and issuing fresh credit cards.

This direction will come into effect immediately.

The bank will, however, continue to provide services to its existing customers, including its credit card customers.

The RBI, in a statement, noted that these actions against the bank were 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 the part of the bank to address these concerns in a comprehensive and timely manner.

The RBI said that 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.

“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,” the RBI said.

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.