India central bank scrutiny of financial firms leads to restrictions
MUMBAI, April 25 (Reuters) – The Reserve Bank of India’s (RBI) increased scrutiny of banks and other financial firms has resulted in a spate of supervisory restrictions, most recently on Kotak Mahindra Bank, India’s fourth largest private lender by assets.
On Wednesday the RBI barred Kotak Mahindra Bank from taking on new customers digitally and issuing credit cards, due to information technology-related deficiencies.
Since 2020, the RBI has placed business restrictions on HDFC Bank, India’s largest private lender, Paytm Payments Bank, the banking unit of fintech firm Paytm, and JM Financial, among others. Following are some of the key actions:
HDFC BANK
In December 2020 the RBI ordered HDFC Bank to stop all launches of new digital products and issuance of new credit cards following multiple outages on the bank’s digital banking channels.
The restrictions lasted until March 2022 which hindered the bank’s business growth, contributing to underperformance of its stock compared to its peers.
BANK OF BARODA
In October 2023, the central bank barred state-run Bank of Baroda from adding customers to its mobile app, bob World.
Source: REUTER