Kotak CEO calls for major tech infra upgrade in message to employees

This came aft the Reserve Bank of India connected Wednesday barred the backstage assemblage lender from onboarding caller customers done its online portal and mobile app, and restricted it from issuing caller recognition cards, owed to “serious deficiencies" successful the bank's IT system.

"However, the explosive maturation successful concern done our integer channels has necessitated a wholly antithetic level of exertion infrastructure, which we person been building. Rest assured, we volition resoluteness each the issues raised by the RBI successful abbreviated order," the recently appointed CEO wrote successful the email reviewed by Mint.

Vaswani besides added that implicit the past 2 years, the slope has importantly invested successful resilience of exertion platforms, which is evident from the simplification successful downtime. 

He said the slope volition proceed to onboard caller customers crossed each products, barring recognition cards, done non-digital channels.

Also Read: Kotak indispensable enactment accelerated to flight RBI’s cyber-risk clamps 

RBI said it recovered "serious" deficiencies and non-compliances successful IT inventory management, spot and alteration management, idiosyncratic entree management, vendor hazard management, and information information among others for the years 2022 and 2023.

Shares of Kotak Mahindra Bank took a beating connected Thursday, slipping 11% to ₹1642.45 apiece connected the NSE. This saw Axis Bank overtake Kotak Mahindra Bank to go the fourth-largest lender by marketplace capitalization successful India. Axis Bank's marketplace capitalization stood astatine ₹3.47 trillion, portion Kotak Mahindra Bank's was astatine ₹3.26 trillion.

RBI's restrictions connected Kotak Mahindra Bank volition punctual galore banks to cheque for gaps successful their accusation exertion systems arsenic they look to onboard caller customers digitally. 

A main exertion serviceman astatine a backstage assemblage slope said that banks request to standard up their server capableness and summation resilience of their tech infrastructure. "Kotak has been doing a batch of engineering work. Solution furniture has been taken out. You request some tech and domain experts moving connected this," said the CTO.

"While astir start-ups person moved to caller exertion agelong clip ago, banks are inactive moving with 2 halfway banking platforms. Banks request to relook astatine technology, plan and construct. Simply patching the ecosystem with vendors won't work," helium added.

Incidentally, ICICI Bank mobile banking application, iMobile Pay, faced a glitch connected Thursday, with users claiming that they could presumption delicate details of different people's recognition cards connected the platform.

"It has travel to our announcement that astir 17,000 caller recognition cards issued successful the past fewer days were erroneously mapped successful our integer channels to incorrect users, constituting astir 0.1% of the bank's recognition paper portfolio," said ICICI slope successful a statement. "As an contiguous measure, we person blocked these cards and are issuing caller ones to the customers," it added.

Also Read: Mint Explainer: Illegal forex trading platforms and the RBI's warning

Over the past 2 years, RBI has enactment concern restrictions connected respective backstage assemblage lenders. In December 2020, the regulator enactment curbs connected caller integer launches by HDFC Bank and ordered it to halt issuing caller recognition cards. These were yet lifted successful March 2022. 

Public assemblage lender Bank of Baroda (BoB) excessively faced RBI’s wrath erstwhile successful October, RBI barred it from adding caller customers connected its mobile app, citing “material supervisory concerns". 

In November 2023, RBI asked Bajaj Finance to halt authorisation and disbursal of loans nether its 'eCOM' and 'Insta EMI Card' lending products citing superior deficiencies. 

Mayur Bhalero contributed to the story

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Published: 25 Apr 2024, 09:01 PM IST