kotak bank travel card

Kotak Mahindra Bank Forex Card: Benefits, Eligibility, Documents & More

Adrika Singh

Updated on: March 6, 2024

Forex card is becoming very popular among international students as it offers a convenient way of managing expenses while studying abroad. It can be used just like a credit or debit card to make transactions in the local currency abroad. There are a plethora of benefits to having a Forex Card. In this blog, we are going to understand Kotak Mahindra Bank’s Forex Card, its features, eligibility, application process, and much more.

Table of contents

Features of kotak mahindra bank forex card, eligibility criteria, documents required, how to apply for kotak mahindra bank forex card, fee & charges of kotak mahindra bank forex card.

Kotak Mahindra Bank’s Forex Card comes with a lot of features that are useful for international students. Let’s look at its varied features one by one.

• Higher level of security – The card is embedded with a chip that offers a high level of security.
• Available in 13 currencies- The card is available in 13 foreign currencies including US Dollars, Euro, Pound Sterling, Australian Dollars, Singapore Dollars, Swiss Francs, Hong Kong Dollars, Canadian Dollars, Japanese Yen, Swedish Krona, South African Rand, United Arab Emirates Dirham, and Saudi Riyal.
• Worldwide acceptability- The card is accepted worldwide at all VISA-accepting merchant outlets and ATMs.
• Validity Period- The Kotak Forex Card is valid for 5 years. You can refer to the expiry date that is mentioned on the card.

The eligibility criteria for availing of the Kotak Mahindra Bank Forex Card are very simple and are as follows: 

• The Forex Card is available to Indian nationals travelling abroad and foreign nationals residing in India. It can not be issued to NRI/NRE/NRO/non-KYC-compliant customers.
• It can be issued to both the customers who maintain an account with the Kotak Mahindra Bank, as well as those who don’t.
• To avail of the Forex Card, existing customers of the bank have to mandatorily mention the PAN Card number on the application form with a passport copy and non-Kotak customers have to provide the KYC and copy of the PAN Card and passport copy.
• In the case of an additional requirement of forex than the prescribed limit for studying abroad, the applicant needs to seek RBI approval for the same and provide it to the bank.

To understand the differences between the HDFC Bank Forex Card and Axis Bank Forex Card you must check out this blog: HDFC Bank Forex Card Vs. Axis Bank Forex Card: A Detailed Comparison

Below is the list of documents required to get the Kotak Mahindra Forex Card:

• Forex Card Application Form
• Passport Copy
• Passport Size Photographs

It is very easy to apply for a Kotak Mahindra Bank Forex Card if you already have an account with the bank. Below are the steps to apply for the Forex Card for existing customers:

• You need to log in to Net Banking, then click on ‘More’.
• After this, you need to select the ‘Forex Card’ option.
• Now, you need to select the currency and enter the amount and other details.
• Post providing all the information, you can choose whether you want to collect the card from the nearest branch or get it delivered to your doorstep.
• The final step is to click on ‘Confirm & Pay’.
• After your card is issued, it will be activated with the loaded currencies within 24 working hours.

In case you don’t have an account with the Kotak Mahindra Bank then this card is available over the counter at all Kotak Mahindra Bank branches. You simply need to walk into the branch, fill in the Forex Card application form, submit the required documentation, fund your card, and walk out with the welcome kit pack. But make sure you carry all the documents with you beforehand so that you can get the card hassle-free and quickly.

Before you apply for Kotak Mahindra Bank Forex Card you must understand all the fees related to this card. The table below has the list of charges that you need to know:

If you are confused between buying a SBI Bank Forex Card and ICICI Bank Forex Card then this blog will help you in making the right choice: SBI Forex Card Vs. ICICI Forex Card: Understanding The Differences

There are currently 13 currencies available on the Kotak Mahindra Forex Card.

Yes, Kotak Forex Card works across the world except for the countries mentioned below: Iran, North Korea, Cuba, Syria, Crimea region, Afghanistan, Venezuela, India, Nepal, Bhutan, Myanmar (Burma).

The Kotak Forex Card is valid for 5 years. You can refer to the expiry date that is mentioned on the card.

This blog covered the details of Kotak Mahindra Bank Forex Card. To know more about Forex Cards, the best bank accounts for students , forex and banking experience for global students or international money transfers , reach out to our experts at 1800572126 to help ease your study abroad experience. 

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Best Kotak Credit Cards in India 2023

Team Finology

Created on 19 May 2023

Wraps up in 4 Min

Read by 5.7k people

Updated on 15 Dec 2023

Credit cards have become an essential financial tool, offering convenience and flexibility in daily transactions. When selecting the right credit card, the choices can be overwhelming. However, Kotak Bank has emerged as a reliable institution known for its commitment to providing tailored financial solutions.

Whether an individual is a frequent traveller, a dedicated shopper, or someone aiming to build a strong credit history, Kotak Bank offers a diverse range of credit cards designed to meet one's specific needs.

To facilitate choosing the appropriate credit card, this article presents a curated list of some of the most popular credit cards offered by Kotak Mahindra Bank.

1. Kotak Indigo Ka-Ching 6E Rewards

Kotak Bank and IndiGo Airlines have collaborated to introduce the Kotak IndiGo Ka-ching 6E Rewards Credit Card . The Kotak IndiGo Ka-ching 6E Rewards Credit Card is a travel credit card enabling customers to accumulate reward points on their reservations. Moreover, cardholders have the opportunity to receive welcome vouchers from partner brands for dining, accommodations, and other services. Here are some of the key features of the card.

• Complimentary Air ticket worth ₹1,500.
• Complimentary 6E prime add-on valued at ₹899.
• Accor Hotels' stay voucher offers up to a 30% discount (maximum ₹5,000) on hotel stays and dining vouchers worth ₹1,000.
• Exclusive gift voucher from Budweiser.
• Earn 3% 6E Rewards on Indigo spends.
• Earn 2% 6E Rewards on grocery, entertainment (movies), and departmental store purchases.
• Earn 1% 6E Rewards on all other transactions.
• Earn up to 15% of 6E Rewards on partner brands such as 6E Treats, AVA, Avis, Be U, Accor Hotels, Net Meds, BoAt, etc.
• No 6E Rewards on prepaid payments.
• Redeem points through your 6E Rewards account.
• 1 6E Reward = Re. 1 for Indigo flight bookings.
• Rewards expire after 2 years from accrual.
• Nominal reward redemption fee is applicable.
• Discounted convenience fee of ₹150 on Indigo flights with a credit card.

2. Kotak League Platinum Credit Card

The Kotak League Platinum Credit Card is designed to provide value-back through reward points on your everyday expenses. It offers additional reward points upon reaching an annual spending threshold, making it an attractive choice for those who make significant purchases. Below is a comprehensive overview of the features of Kotak League Platinum Credit Card.

• Receive a ₹500 movie voucher on joining.
• Spend ₹1,25,000 every 6 months and get 4 free PVR tickets or 10000 reward points
• Max. 8 free PVR tickets can be availed, transferable for any show within 3 months.
• Redeem 10,000 reward points for movie tickets, airline bookings, mobile recharges, and exclusive merchant stores in the next billing cycle.
• Enjoy a 1% waiver on fuel transactions (₹500 - ₹3,000, and the maximum waiver is ₹3,500. No reward points on fuel transactions.
• Get up to ₹500 annual transaction waiver on the IRCTC website or Indian Railways Booking Counters.
• Spend ₹50,000+ annually for ₹500 fee waiver.
• Up to ₹1,25,000 protection in case of card theft or loss within 7 days.
• Earn up to 8x reward points on yearly spending up to ₹2 lakh on special categories (Airlines, Electric Sales, Durable Goods, Departmental Stores, etc.). Also, earn 4x reward points on other categories.

3. Kotak Royale Signature Credit Card

The Kotak Royale Signature Credit Card is designed to enhance travel and shopping experiences by offering rewarding benefits. Cardholders can earn valuable reward points on their expenditures.  Cardholders can redeem these rewards for various options, including air tickets, mobile recharge, merchandise, and more. 

Here are all the essential features of the Kotak Royale Signature Credit Card:

• Earn 10,000 Reward Points on spending ₹4 lakh in a year.
• Earn 30,000 Reward Points on spending ₹8 lakh or more annually.
• Bonus Reward Points are credited at the end of the term.
• Enjoy 2 complimentary domestic airport lounge access annually through the Visa Lounge Access Program.
• Get insurance covering up to ₹2,50,000 for unauthorized transactions on lost/stolen cards.
• Avail of railway surcharge waiver on transactions at irctc.co.in or Indian Railway Booking counters, capped at ₹500 per year.
• Convenient bill payment option by sending an SMS "KASSIST" to 5676788; receive a callback within 2 hours.
• Joining and Renewal Fee Waiver: Spend ₹1 Lakh or above in the previous year to get the annual fee waived.
• Enjoy 1% waiver on fuel surcharge for transactions between ₹500 and ₹3,000 at all fuel pumps, capped at ₹3,500 per year.
• Earn 2 Reward Points per ₹150 spent.
• Earn 4 Reward Points per ₹150 on select categories like hotels, restaurants, airlines, tour operators, package tour operators, and international spends.
• No Reward Points on fuel and railway transactions.

Final Thoughts

Choosing the right Kotak Bank Credit Card in India can help you grow and take control of your finances. By selecting a card that suits your lifestyle and goals, you can learn to spend wisely, manage your finances responsibly, and earn valuable rewards.

Every transaction you make with your card can help you build a better financial future, establish a credit history, and try new things.

By choosing from Kotak Bank's range of Credit Cards, you can set yourself up for growth, empowerment, and financial success. The right card could open up a world of financial abundance and fulfilment for you in India.

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Kotak Mahindra Bank Lifetime Free Credit Cards

The Kotak Mahindra Bank has over 50 lakh credit card holders in our country, with more than 300 branches spread all across the country. To fulfill people’s needs and requirements, the bank offers different products like life insurance, mutual funds, stockbroking, etc. The bank also has an admirable range of credit cards across various categories with exceptional benefits and features.

Kotak Mahindra Bank launched credit cards in 2008, and their portfolio includes super-premium, travel, fuel, and even lifetime-free credit cards. If you are new to credit, instead of premium cards with high fees and top-end features, you should go for a lifetime free or low annual fee credit card that helps you build a better credit score.

Kotak 811 #DreamDifferent Credit Card

Kotak mahindra bank upi rupay credit card, metro kotak credit card, myntra kotak credit card, indianoil kotak credit card, kotak league platinum credit card, best kotak mahindra bank ltf credit cards.

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Kotak Mahindra Bank Credit Cards – Joining Fee Below Rs. 500

Know About LTF Credit Cards by Kotak Mahindra Bank

Lifetime free credit cards by Kotak Mahindra come without any annual or joining fees. These cards are perfect for people who are not looking for elite-level privileges and rewards and want an entry-level card to help develop their credit score and build good credit utilization habits.

The following are the top Kotak Mahindra Bank Lifetime Free credit cards that you can get–

The Kotak 811 Dream Different secured credit card and you have to make a fixed deposit with the bank to get the card. It is a lifetime free offering and does not charge any joining or annual fee from the cardholder, and even offers reward points as a welcome benefit. You earn 1 reward point on every Rs. 100 spent with the card and 2x reward points on your online spends. You can even reward points as milestone benefits and redeem the points easily against a host of choices. Other benefits of the card include movie tickets, cashback, fuel surcharge waiver, etc.

• Secured lifetime free credit card without any joining or annual fee
• 1 RP per Rs. 100 spent and 2x RPs on online spends
• Bonus 500 reward points as a welcome benefit
• Bonus reward points on reaching the spend milestones
• 4 complimentary PVR movie tickets per year
• 1% fuel surcharge waiver
• 8% railway surcharge waiver on IRCTC website booking and 2.5% waiver on bookings at railway counters

The Kotak UPI RuPay Credit Card allows you to make secure payments with your UPI application. Simply link your Kotak UPI RuPay Credit Card with your preferred UPI app such as Google Pay, PhonePe, BHIM, Slice, Paytm, or any other app, and you can securely make transactions on the go. RuPay Credit Cards have become increasingly popular in India because they can be linked with UPI apps, unlike other network cards. There are no joining or annual charges when you apply for this card.

The Metro Kotak credit card is a great choice for hotel owners, caterers, and Kirana store owners, and it comes free for life with no joining or annual fees. The card is co-branded by Metro Wholesale and Kotak Mahindra Bank and is exclusively for people who shop at Metro Wholesale for their stores or businesses. You must have a Metro membership to be eligible for this card, and it offers 1% cashback up to Rs. 10000 per statement cycle on your spends. One thing you must know is that you cannot make fuel or international spends with this credit card as it is for Metro Wholesale purchases exclusively.

• Lifetime free credit card without any joining or annual fee
• The card is exclusively for Metro Wholesale members
• Up to Rs. 500 cashback on making a single transaction of more than Rs. 10,000 within 30 days
• 1% cashback on monthly spends of Rs. 5 Lakhs and more
• 25-0.5% cashback on monthly spends of less than Rs. 5 Lakhs

Kotak Credit Cards Under Rs. 500

Other than the lifetime free cards by Kotak Mahindra Bank, several other affordable cards have a joining fee of Rs. 500 or less than that. Let’s take a look at these credit cards –

The Myntra Kotak credit card is a co-branded fashion card launched recently by Kotak Mahindra Bank and fashion e-commerce giant Myntra. The card is made for young professionals who regularly shop at Myntra and are fashion enthusiasts. You can get an instant 7.5% discount on all spends made at Myntra, along with 5% cashback on partner brands and 1.25% cashback elsewhere. As a welcome benefit, the card offers a Rs. 500 Myntra voucher and a complimentary Myntra Insider membership. Even though the card has a low joining fee of Rs. 500, it still offers lounge access and a host of other milestone benefits to the cardholder.

• 500 worth of Myntra vouchers on 1 transaction above Rs. 500 within 30 days
• Instant 7.5% discount on Myntra spends
• 5% cash back at partner brands and 1.25% cash back elsewhere
• Complimentary Myntra Insider program membership
• Complimentary domestic lounge access per quarter
• 2 complimentary PVR tickets on spending Rs. 50,000 per quarter
• 1% fuel surcharge waiver and spend-based renewal fee waiver

Kotak Mahindra Bank and Indian Oil partnered to launch their co-branded IndianOil Kotak fuel credit card that comes at a joining fee of Rs. 449. It is an entry-level credit card that is perfect for people who regularly refuel their vehicles and are new to the credit card industry. Cardholders are rewarded every time they refuel their vehicles at Indian Oil outlets across the country and also on their dining, grocery, and some other spends with the card. The card offers you a chance to earn up to 60 liters of fuel every year free of cost.

• 1000 reward points as a welcome benefit on spending Rs. 500 within 30 days
• 24 reward points per Rs. 150 spent at IndianOil outlets and 12 reward points per Rs. 150 on dining and grocery
• 3 reward points per Rs. 150 spent elsewhere
• Personal accident insurance cover of up to Rs. 2 Lakhs
• 1% fuel surcharge waiver and spend-based annual fee waiver

The Kotak League Platinum credit card is another decent offering by Kotak Mahindra Bank that provides several benefits and rewards on your spends. When you pay the Rs. 500 joining fee of this card, you receive a Rs. 500 worth movie voucher as a welcome benefit. Also, when you spend Rs. 1,25,000 per six months, you get 4 complimentary PVR movie tickets or up to 10,000 bonus reward points. Other than this, the Kotak League Platinum credit card is packed with features like railway surcharge waiver, fuel surcharge waiver, spend-based renewal fee waiver, and more.

• 500 worth of movie vouchers on paying the joining fee
• 8x reward points on spending Rs. 2 Lakhs or more annually on special categories
• 4x reward points on all other categories
• Complimentary 4 PVR movie tickets or bonus 10,000 RPs on spends of Rs. 1,25,000 or more in six months
• Zero liability protection cover worth Rs. 1,25,000

How to Apply for Kotak Mahindra Bank Lifetime Free Credit Cards

Follow these steps to apply for Kotak Mahindra Bank credit cards:

• Click on the Apply Now button next to the credit card you want to apply for.
• Fill out the application for your new credit card.
• Submit your application.
• Wait for approval of your credit.

Bottom Line

Kotak Mahindra Bank has a nice catalog of credit cards ranging from premium to entry-level cards. If you are someone new to the credit scene who does not want elite-level features and is looking for a beginner credit card to build your credit score and history, then consider going for a Kotak Mahindra lifetime free credit card.

You can use these credit cards to begin your credit journey before moving on to better, premium credit cards. Multiple Kotak Mahindra credit cards are also available at a low, nominal joining fee of Rs. 500 or less. Head over to the comments and let us know if you plan on applying for any of the Kotak Mahindra lifetime free credit cards.

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RBI bars Kotak Bank from onboarding customers online, issuing fresh credit cards

Mumbai: Cracking down on repeated non-compliance of IT norms, the Reserve Bank of India on Wednesday barred Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards with immediate effect after the regulator found "serious deficiencies" in the lender's IT risk management.

These actions, the RBI said, are necessitated based on significant concerns arising out of Reserve Bank's IT examination of the bank for the years 2022 and 2023 and the continued failure on the part of the bank to address these concerns in a comprehensive and timely manner.

In an almost similar action, the RBI in December 2020 had barred HDFC Bank from issuing new cards and launching new digital initiatives after repeated instances of technological outages at the lender. The restrictions were later lifted in March 2022.

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In a statement regarding the supervisory action against Kotak Mahindra Bank, the RBI said: "Serious deficiencies and non-compliances were observed 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 and disaster recovery rigour and drill, etc."

The Kotak Mahindra Bank has been directed "to cease and desist", with immediate effect, from onboarding of new customers through its online and mobile banking channels and issuing fresh credit cards. The bank shall, however, continue to provide services to its existing customers, including its credit card customers.

"The bank shall, however, continue to provide services to its existing customers, including its credit card customers," RBI said.

For two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under Regulatory guidelines, the RBI added.

"During the subsequent assessments, the bank was found to be significantly non-compliant with the Corrective Action Plans issued by the Reserve Bank for the years 2022 and 2023, as the compliances submitted by the bank were found to be either inadequate, incorrect or not sustained," the RBI said.

In the absence of a robust IT infrastructure and IT Risk Management framework, the RBI said 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 central bank said.

The RBI further said that in the past two years, it has been in continuous high-level engagement with the bank on all these concerns with a view to strengthening its IT resilience, but the outcomes have been far from satisfactory.

It is also observed that, of late, there has been rapid growth in the volume of the bank's digital transactions, including transactions pertaining to credit cards, which is building further load on the IT systems, the Reserve Bank said.

"The Reserve Bank, therefore, has decided to place certain business restrictions on the bank as mentioned above, in the interest of customers 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," the statement said.

The restrictions imposed will be reviewed upon completion of a comprehensive external audit to be commissioned by the bank with the prior approval of RBI, and remediation of all deficiencies that may be pointed out in the external audit as well as the observations contained in the RBI inspections, to the satisfaction of the Reserve Bank.

Further, these restrictions are without prejudice to any other regulatory, supervisory or enforcement action that may be initiated against the bank by the Reserve Bank, the central bank said.

Kotak Mahindra Bank Limited is scheduled to announce the consolidated and standalone audited financial results for the quarter and financial year ended March 31, 2024, on Saturday (May 4). 

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Rbi asks kotak mahindra bank to stop issuing fresh credit cards, onboarding fresh customers via mobile banking.

The Reserve Bank of India (RBI) directed Kotak Mahindra Bank to halt new credit card issuance and customer onboarding via online and mobile banking due to identified operational deficiencies. This move, aimed at safeguarding customer interests, is part of RBI's regulatory measures concerning compliance and risk management issues at the bank.

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Kotak Mahindra Bank: RBI bars bank from onboarding new customers online, fresh credit cards

S hares of Kotak Mahindra Bank Ltd will be in focus on Thursday morning after the Reserve Bank of India (RBI), exercising its powers under Section 35A of the Banking Regulation Act, 1949, asked the private lender to cease and desist, with immediate effect, from onboarding of new customers through its online and mobile banking channels and issuing fresh credit cards. 

Kotak Mahindra Bank may, however, continue to provide services to its existing customers, including its credit card customers, the RBI said. The central bank said restrictions would be reviewed upon completion of a comprehensive external audit to be commissioned by the bank with the prior approval of RBI, and remediation of all deficiencies that may be pointed out in the external audit as well as the observations contained in the RBI Inspections, to the satisfaction of the apex bank.

"Further, these restrictions are without prejudice to any other regulatory, supervisory or enforcement action that may be initiated against the bank by the Reserve Bank," the central bank said.

These actions, the RBI said, are necessitated based on significant concerns arising out of Reserve Bank’s IT Examination of the bank for the years 2022 and 2023 and the continued failure on part of the bank to address these concerns in a comprehensive and timely manner. 

"Serious deficiencies and non-compliances were observed 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 and disaster recovery rigour and drill, etc. For two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under Regulatory guidelines," RBI said.

During the subsequent assessments, the bank was found to be significantly non-compliant with the Corrective Action Plans issued by the Reserve Bank for the years 2022 and 2023, as the compliances submitted by the bank were found to be either inadequate, incorrect or not sustained, the apex bank said.

"The Reserve Bank, therefore, has decided to place certain business restrictions on the bank as mentioned above, in the interest of customers 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," RBI said

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RBI bars Kotak Bank from onboarding new online customers, issuing new credit cards

According to ashutosh mishra of ashika stock broking, the rbi restrictions on kotak mahindra bank is expected to stay for at least one year. "this will at least take one year if i go through the many more incidents where the rbi has taken the similar actions against either the banks or even visa, mastercard in many of these cases. these it systems require thorough audits from the rbis side and when they get satisfied then only they lift these restrictions," the analyst said..

'RBI bank on Kotak likely to stay for a year'

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RBI bars Kotak Bank from adding new online customers and credit cards

India's central bank on Wednesday ordered Kotak Mahindra Bank to immediately cease onboarding new customers via its online and mobile banking channels and to stop issuing fresh credit cards, citing serious deficiencies in the bank's IT systems and risk management practices.

Kotak Mahindra Bank is India's fourth most valuable bank. It's also one of the key partners for many fintech startups -- including KredX and Rupeek -- in the country. The lender, also an investor in many startups, additionally works with many fintech firms to extend credit to SMEs and MSMEs and to issue co-branded credit cards.

The lender operates Kotak811, a digital offering that has emerged as its strongest customer acquisition tool in recent years. Kotak811, which allows onboarding of customers digitally and within "three minutes" without paperwork, serves nearly 20 million customers.

The Reserve Bank of India (RBI) said it was imposing the restrictions on Kotak Mahindra Bank because of significant concerns stemming from its IT examinations of the bank for the years 2022 and 2023. The central bank found serious deficiencies and noncompliance in areas such as IT inventory management, patch and change management, user access management, vendor risk management, data security, and business continuity planning, it said.

Existing customers aren't impacted by the restrictions.

The new restrictions could "severely impact the new retail customer additions for the bank given its smaller branch network vs. peers and higher reliance on digital channels," analysts at Bernstein noted. The inability to issue fresh cards could impact the bank’s planned shift toward a higher share of unsecured loans "given the important role played by credit cards in achieving that target," the analysts added.

Despite being under close scrutiny and engaging in high-level discussions with the RBI over the past two years, Kotak Mahindra Bank failed to adequately address these issues and implement satisfactory corrective measures, the central bank said. The bank's core banking system and digital channels have experienced frequent and significant outages, with the most recent disruption occurring on April 15, 2024, causing severe inconvenience to customers, the RBI added.

The RBI stated that the rapid growth of digital transactions at the bank, including credit card transactions, has put additional strain on the lender's already weak IT systems. Without a robust IT infrastructure and risk management framework, prolonged outages could seriously impact the bank's ability to provide efficient customer service, and potentially harm the broader digital banking and payment ecosystem, the central bank cautioned.

The restrictions imposed on Kotak Mahindra Bank will be reviewed upon completion of a comprehensive external audit, commissioned by the bank with prior RBI approval, and the satisfactory remediation of all identified deficiencies, the RBI said.

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RBI bars Kotak Bank from online onboarding of customers, issuing fresh credit cards

The RBI said its decision was based on significant concerns arising out of its IT examination of the bank for 2022 and 2023, and the bank’s continued failure to address these concerns in a comprehensive and timely manner.

THE RESERVE Bank of India (RBI) on Wednesday directed Kotak Mahindra Bank to stop onboarding of new customers through its online and mobile banking channels and also barred it from issuing fresh credit cards with immediate effect, citing “serious deficiencies” and “non-compliance” by the private bank in its IT (information technology) risk management and information security governance for 2022 and 2023.

Confirming that it had received the RBI order, Kotak Mahindra Bank said in a statement: “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.” The lender said its branches continue to onboard new customers, providing them with all services, other than issuance of new credit cards.

“Serious deficiencies and non-compliances were observed 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 and disaster recovery rigour and drill,” the RBI said in a release.

The banking regulator said that during subsequent assessments, the bank was found to be significantly non-compliant with the corrective action plans issued by the RBI for 2022 and 2023; the compliances submitted by the bank were found to be “either inadequate, incorrect or not sustained”.

“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 RBI said.

The action on Kotak was taken under Section 35A of the Banking Regulation Act, 1949, according to which the RBI has the power to give directions “to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company”. The RBI found the private sector lender to be “materially deficient in building necessary operational resilience, on account of its failure to build IT systems and controls commensurate with its growth”.

Over the past two years, the RBI has been in continuous high-level engagement with the bank on all these concerns with a view to strengthening its IT resilience, but the outcomes have been far from satisfactory, the release said.

It is also observed that, of late, there has been rapid growth in the volume of the bank’s digital transactions, including transactions pertaining to credit cards, which is building further load on the IT systems, it said.

The RBI said it has decided to place certain business restrictions on the bank in the interest of customers 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.

The bank, however, will continue to provide services to its existing customers, including its credit card customers, it said.

According to RBI data, the bank’s current credit cards (till March 2024) total 59.54 lakh.

The bank’s scrip closed at Rs 1,843.05 apiece, up 1.64 per cent, on Wednesday.

In the past, RBI has taken action against some banks, including barring them from onboarding new customers, for non-compliance of various regulatory guidelines.

Last year, RBI asked Bank of Baroda to suspend any further onboarding of customers on its “bob World”, the lender’s mobile banking application. The action came after a media report in July 2023, which said that some bank employees were involved in fake onboarding of bank customers on “bob World”.

In December 2020, RBI asked HDFC Bank to temporarily stop all launches of its digital business generating activities under ‘Digital 2.0’ programme, and sourcing of new credit card customers. This came after the RBI observed certain incidents of outages in the bank’s internet banking, mobile banking and payment utilities over the last two years. The restrictions were later lifted.

• Kotak Mahindra Bank
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