MUMBAI: Kotak Mahindra Bank, hit hard by a regulatory bombshell late last month, on Saturday admitted that the ban on its online and mobile app customer onboarding will impact its business marginally but that’s “a lesser worry as the bigger worry is the reputational damage” arising from the punitive action and that “their first priority is to get the IT infra right to the level it’s the gold standard.”
The Kotak Bank management, led by the new chief executive Ashok Vaswani who joined only in January and the joint managing director Shanti Ekambaram, admitted that the RBI action will impact business to some extent especially the 811 banking channel as over 90 percent of personal loans and small business loans have been done online.
But despite repeated questions, they did not quantify the loss likely to be seen, insisting that “the more serious issue is the reputational damage and not financial as we are free to do our business through our branches, wherein now our focus will be more cross-selling than it used to be before the ban.”
They were addressing the media for the first time after the April 24 punitive action by the Reserve Bank wherein it had ordered the bank to immediately stop on-boarding customers through online channels and mobile app and also issuing new credit cards for its failure to improve its risk management systems and IT infra for the past two years. Announcing the March quarter and FY24 full year earnings, the bank said its standalone net income for the quarter rose 18 percent to Rs 4,133 crore and for the full year to Rs 13,782 crore.
On a consolidated business, the net income jumped 17 percent to Rs 5,337 crore and 22 percent to Rs 18,213 crore for the full year.
