In the wake of the Reserve Bank of India’s (RBI) recent restrictions on Kotak Mahindra Bank, the institution anticipates a relatively small financial impact but expresses heightened concerns over potential reputational damage.

In a statement made by the managing director and chief executive, Ashok Vaswani, Kotak Mahindra Bank acknowledges the business limitations imposed by the RBI. The bank’s top official emphasizes that while the financial ramifications are expected to be contained, the focus remains on mitigating any adverse effects on its reputation.

The RBI’s directive, issued late last month, prohibits Kotak Mahindra Bank from onboarding new customers through its online and mobile banking platforms. Additionally, the bank is restricted from issuing fresh credit cards with immediate effect. These measures come as a response to deficiencies identified in the bank’s IT risk management framework.

Vaswani hinted at a projected duration of these restrictions, suggesting they may endure for a “couple of months.” Despite this setback, the bank reassures stakeholders that its liability growth is anticipated to be minimally impacted.

Kotak Mahindra Bank affirms its commitment to addressing the concerns raised by the RBI promptly and comprehensively. The institution remains focused on maintaining transparency and operational resilience while navigating through these regulatory challenges.

As the banking sector continues to evolve amidst heightened scrutiny and regulatory oversight, Kotak Mahindra Bank aims to prioritize compliance and governance to uphold its reputation and ensure sustained growth in the long term.