News: RBI has directed Kotak Mahindra bank to cease onboarding of new clients through online and mobile banking channel and desist issuing new credit cards from immediate effect. This action has been initiated owing to deficiency in IT inventory management, data security and data leak prevention strategy and others.
Views: With the ban on digital onboarding of new customers, non-digital mode should continue unaltered. However, regulatory ban is expected to eminent concerns on business growth and particularly impact anticipated growth in unsecured segment thereby impacting valuation. As of Dec 2023, credit card contributes ~3.9% of net advances.
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