The Reserve Bank of India (RBI) on Wednesday asked Kotak Mahindra Bank to cease and desist from issuing new credit cards, onboarding new customers through online and mobile banking channel with immediate effect after it found "serious deficiencies and non-compliances" in certain areas of its operations.This directive, issued in the interest of customers, comes as part of regulatory actions taken by the RBI in response to concerns regarding compliance and risk management at the bank.
The private lender, RBI said, can continue providing services to its existing customers, including its credit card users.
"The Reserve Bank of India has today, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949, directed Kotak Mahindra Bank Limited (hereinafter referred to as ‘the 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," the RBI statement read.
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