IANS | 25 Apr, 2024
Shares of Kotak Mahindra Bank crashed by as much as 12 per cent in
morning trade on Thursday to Rs 1,620 on BSE as investors dumped the
stock following the RBI crackdown on the lender.
The RBI had, on
Wednesday evening, barred Kotak Mahindra Bank, with immediate effect,
from taking on new customers and issuing fresh credit cards.
Infina
Finance, one of the promoter group entities of Kotak Mahindra Bank had
donated electoral bonds worth Rs 60 crore to the BJP. However, the RBI
has taken stringent action against the bank to protect the interest of
consumers.
The RBI order said business restrictions on Kotak
Mahindra Bank have been imposed in the interest of customers as the Uday
Kotak-controlled bank was assessed to be deficient in its IT Risk and
Information Security Governance.
The RBI said that stringent
action has been taken to protect consumers and to prevent any possible
prolonged outage which may seriously impact not only the bank’s ability
to render efficient customer service but also the financial ecosystem of
digital banking and payment systems, according to the RBI order.
“In
the absence of a robust IT infrastructure and IT Risk Management
framework, the bank’s Core Banking System (CBS) and its online and
digital banking channels have suffered frequent and significant outages
in the last two years, the recent one being a service disruption on
April 15, 2024, resulting in serious customer inconveniences.
“The
bank is found to be materially deficient in building necessary
operational resilience on account of its failure to build IT systems and
controls commensurate with its growth,” the RBI order states.
The
RBI investigation into the operations of the bank revealed serious
deficiencies and non-compliances 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 as well as disaster recovery rigour and drill.
