Kotak Mahindra Bank share price: A man walks past the Kotak Mahindra Bank branch in New Delhi, India.(Kotak Mahindra Bank share price: A man walks past the Kotak Mahindra Bank branch in New Delhi, India.(
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The shares of Kotak Mahindra Bank plunged nearly 10% following the Reserve Bank of India’s (RBI) decision to restrict the bank from issuing new credit cards and onboarding new customers via online channels. The central bank cited significant deficiencies in the bank’s IT system as the reason behind the move.

RBI’s statement revealed identified deficiencies and non-compliances in various areas of Kotak Mahindra Bank’s IT system for the years 2022 and 2023, including IT inventory management, patch and change management, user access management, vendor risk management, and data security.

In response, Kotak Mahindra Bank assured that it has taken measures to adopt new technologies to strengthen its IT systems and will continue to collaborate with the RBI to address the issues raised.

The central bank highlighted that due to 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 experienced frequent and significant outages in the past two years, with the latest disruption occurring on April 15, 2024, resulting in substantial customer inconvenience.

Analysts weighed in on the impact of RBI’s order on Kotak Mahindra Bank. Citi expressed concerns that the RBI’s action could adversely affect the bank’s growth, net interest margin (NIM), and fee income. The brokerage maintained a ‘neutral’ call on the stock with a target price of ₹2,040 per share.

Emkay Global echoed similar sentiments, stating that the restrictions would likely impede business growth and lead to earnings being impacted in the medium term. Additionally, the regulatory overhang is e

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