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RBI Lifts Regulatory Restrictions on Kotak Mahindra Bank.

Banking & Finance | Dated: 17 Feb 2025

In February 2025, the Mumbai-based Reserve Bank of India (RBI) lifted the restrictions on Kotak Mahindra Bank (KMB) Limited, headquartered in Mumbai, Maharashtra, allowing the bank to resume digital onboarding of new customers and issuance of new credit cards.

🎯 Key Highlights:

  • - The RBI had imposed these restrictions on April 24, 2024, under Section 35A of the Banking Regulation Act, 1949, after identifying significant Information Technology (IT)-related regulatory violations, including deficiencies in IT inventory management, security protocols, and disaster recovery measures.
  • - The restrictions had barred the bank from onboarding new customers via online and mobile banking and from issuing fresh credit cards.

💡 Other Important Facts:

  • (i) To address these issues, KMB implemented corrective measures, submitted compliance reports, and conducted an external audit with RBI's approval. After evaluating the bank's improvements and compliance efforts, the RBI decided to remove the restrictions.
  • (ii) Consequently, the "cease and desist" directive has been lifted for all banks and non-banking financial companies (NBFCs), except for Paytm Payments Bank.

📚 Test Your Knowledge:

Recently, which bank had its regulatory restrictions lifted by the Reserve Bank of India (RBI)?

Correct Answer: Kotak Mahindra Bank

🚀 Quick Recap: