Good news for India's richest banker, RBI lifts ban on his Rs 392000 crore company, allows it to...

RBI has lifted the curbs it imposed on Kotak Mahindra Bank nine months ago due to concerns on the technology front. The central bank has now allowed the lender to issue new credit cards and onboard new customers through online and mobile banking channels. The bank, whose market cap is Rs 3.92 lakh crore, was founded by Uday Kotak, India's richest banker. As per Forbes, he has a real-time net worth of USD 14.2 billion, as of February 13.

As per reports, Kotak had undertaken a third-party IT audit from an external consultant, and undertaken various other measures. Under former Governor Shaktikanta Das, the RBI had resorted to imposing business restrictions on a slew of errant entities as a supervisory measure, including imposing nearly 15-month restrictions on the largest private sector lender HDFC Bank till March 2022.

Das had explained that months of correspondence, warnings and meetings precede such an order, and added that they were taken as a corrective step. At his maiden policy review last week, his successor Sanjay Malhotra had hinted at a softer approach on regulatory aspects considered as detrimental by banks, and made it clear that he would not like to use it more often. He had also said the cost of regulatory moves needs to be taken into consideration before any action.

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The total number of outstanding credit cards for Kotak Mahindra Bank (KMB) declined to over 50 lakh in December from 59 lakh in March 2024, while the share of unsecured loans dropped to 10 per cent after the move. A KMB spokesperson welcomed the RBI's move to lift the business restrictions and added that this decision follows its successful implementation of remedial measures and compliance validation through an external audit.

(With inputs from PTI)