- Kotak Mahindra Bank’s CEO highlights tech investment gaps amid RBI’s April 24th order to halt new online customer onboarding due to IT issues.
- Big digital upgrade promised!
- Here is what happened.
RBI’s ban and business restrictions. Here is why.
On April 24, 2024, The Reserve Bank of India (RBI) ordered Kotak Bank to cease onboarding new customers through its online and mobile banking channels and to stop issuing new credit cards.
The RBI’s action stemmed from significant concerns identified during its IT examination of the bank for the years 2022 and 2023.
They criticized Kotak Bank for its subpar IT systems, resulting in business restrictions.
These concerns were not addressed comprehensively and promptly by the bank, prompting the regulatory intervention.
Kotak Bank’s CEO – Digital upgrade promised
Kotak Mahindra Bank’s Managing Director and CEO, Ashok Vaswani, has admitted to shareholders that the bank’s investments in technology have been insufficient.
He added, “We had significantly stepped up resources and investments in technology. However, it is evident that we have more to do.”
In his letter, Vaswani stressed that Kotak Bank is fully aligned with the regulator.
Vaswani highlighted that technology will be central to Kotak Bank’s efforts to transform and scale.
He mentioned that the regulator’s priority is ensuring that customers are well taken care of in a responsible way…And that’s precisely what their management team is dedicated to.
So, there’s complete harmony between the regulators and the team.
Vaswani, who took charge on January 1, 2024, emphasized the need for increased resources and investments in technology in the bank’s annual report for 2023-24.
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Responding to emerging challenges
Vaswani acknowledged that changing customer expectations, rapid business growth, and the evolving risk landscape require the bank to accelerate its pace.
He further stated that they are fully dedicated to improving their resources and efforts in this field, and as a team, they will succeed and take advantage of this opportunity to excel.
About Kotak Mahindra Bank
Kotak Mahindra Bank Limited, based in Mumbai, is an Indian financial institution that provides a wide range of banking and financial services to both corporate and retail clients.
Its offerings include personal finance, investment banking, life insurance, and wealth management solutions.
Profits: In the fiscal year 2024, the Bank’s profit after tax rose to ₹13,782 crore from ₹10,939 crore in FY23, marking a 26% year-on-year increase.
The Profit After Tax (PAT) for the fourth quarter of FY24 reached ₹4,133 crore, showing an 18% year-on-year growth from ₹3,496 crore in Q4FY23 (a 38% quarter-on-quarter increase from ₹3,005 crore in Q3FY24).
Employees: 73,481 employees as of March 2023
Leadership:
CEO & MD – Ashok Vaswani
COO – Mohan Shenoi
CFO – Devang Gheewalla
CTO – Milind Nagnur
CMO – Rohit Bhasin
Global CHRO – Anupam Kaura
Wrapping up
Vaswani reiterated that technology will be at the heart of Kotak Bank’s transformative efforts.
With these initiatives, Kotak Bank aims to address regulatory concerns and position itself for sustained growth and innovation in the future.
