RBI Restricts Kotak Mahindra Bank from Issuing Credit Cards, Onboarding New Customers
Central Bank Imposes Sanctions Due to Concerns over Data Protection
Shares Drop Significantly Amidst Regulatory Intervention
The Reserve Bank of India (RBI), India's central bank, has imposed restrictions on Kotak Mahindra Bank, prohibiting it from issuing new credit cards or onboarding new customers through online channels.
The decision, announced on Wednesday, comes in response to concerns raised by the RBI regarding Kotak Mahindra Bank's compliance with data protection regulations. In particular, the RBI has expressed concerns about the bank's lack of adequate infrastructure and policies to protect customer data.
The RBI's action follows an earlier inspection of Kotak Mahindra Bank, during which the bank allegedly failed to address the RBI's concerns. As a result, the RBI has imposed the current restrictions as a precautionary measure to safeguard customer data.
The news of the RBI's restrictions has sent shares of Kotak Mahindra Bank plummeting by over 10%. Investors are expressing concerns about the potential impact of the restrictions on the bank's operations and profitability.
Kotak Mahindra Bank has yet to issue an official statement regarding the RBI's decision. The bank is expected to provide clarification on the matter and outline its plans to address the RBI's concerns.
The RBI's restrictions highlight the increasing importance of data protection in the Indian banking industry. The RBI is determined to ensure that banks implement robust measures to safeguard customer information and prevent data breaches.
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