India's central bank announces supervisory action on private bank

NEW DELHI, April 24 (Xinhua) -- India's central bank, the Reserve Bank of India (RBI), on Wednesday announced a "supervisory action" on a private bank, the Kotak Mahindra Bank, directing it to cease and desist with immediate effect from onboarding of new customers through its online and mobile banking channels, including issuing fresh credit cards.

The bank shall, however, continue to provide services to its existing customers, including its credit card customers, said an official statement of the RBI.

The Kotak Mahindra Bank has over 1,800 branches across India with a customer base of more than 48 million. It received the banking license from the RBI in 2003, thus becoming the first non-banking finance company in India to convert into a bank. The bank currently offers services ranging from commercial banking, stock broking, and mutual funds to insurance and investment banking.

The central bank said the measure was necessitated based on significant concerns arising out of its IT Examination of the bank for 2022 and 2023, and the continued failure on part of the private bank to address these concerns in a comprehensive and timely manner.

The RBI statement said the private bank was found to be significantly non-compliant with the Corrective Action Plans issued by the central bank for 2022 and 2023, as the compliances submitted by the bank were found to be either inadequate, incorrect or not sustained.

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