The Reserve Bank of India (RBI) on Wednesday asked private-sector lender Kotak Mahindra Bank to stop onboarding new customers through its online and mobile banking channels and barred it from issuing fresh credit cards.
The regulator said the action was necessary as the bank failed to plug gaps in its information technology (IT) systems. There were frequent outages in the bank's core banking system and online channels in the last two years which inconvenienced the customers, the central bank said.
The bank can continue to provide services to existing customers, including credit card customers, the RBI added.
In a statement, Kotak Mahindra Bank said: "We have received an order from the RBI which directs us to temporarily pause onboarding of new customers through our online and mobile banking channels and issuance of fresh credit cards.
The bank has taken measures for adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest. We want to reassure our existing customers of uninterrupted services, including credit card, mobile, and net banking.
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