Kotak Bank shares tank nearly 12%

Mcap eroded by Rs 39,768 crore after RBI cracked its whip on the bank on Wednesday

NEW DELHI: Shares of Kotak Mahindra Bank on Thursday tanked nearly 12 per cent after the RBI barred the firm from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards with immediate effect.

The stock plummeted 10.85 per cent to settle at Rs 1,643 apiece on the BSE. During the day, it plunged 12.10 per cent to its 52-week low of Rs 1,620.

On the NSE, it declined 10.73 per cent to Rs 1,645 per share. During the day, the stock tumbled 13 per cent to the 52-week low of Rs 1,602.

The company’s market capitalisation (mcap) eroded by Rs 39,768.36 crore to Rs 3,26,615.40 crore.

The stock emerged as the biggest laggard on both the BSE Sensex and NSE Nifty.

In volume terms, 25.45 lakh shares of the company were traded on the BSE and over 661.79 lakh shares on the NSE during the day.

Axis Bank became the fourth most valued bank in the country by market valuation, going past Kotak Mahindra Bank. The market valuation of Axis Bank stood at Rs 3,48,014.45 crore.

HDFC Bank, ICICI Bank and State Bank of India are the three most valuable banks by market capitalisation. “Kotak Mahindra Bank is no longer the 4th largest bank in the country as

Axis Bank took the position,” said Avdhut Bagkar, Technical and Derivatives Analyst at StoxBox.

Cracking down on repeated non-compliance of IT norms, the RBI on Wednesday barred Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards with immediate effect after the regulator found “serious deficiencies” in the lender’s IT risk management.

These actions, the RBI said, are necessitated based on significant concerns arising out of Reserve Bank’s IT examination of the bank for the years 2022 and 2023 and the continued failure on part of the bank to address these concerns in a comprehensive and timely manner.

Meanwhile, Kotak Mahindra Bank said in a statement that it has taken steps for adoption of new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve balance issues at the earliest.

In a statement regarding the supervisory action against Kotak Mahindra Bank, the RBI said: “Serious deficiencies and non-compliances were observed in the areas of IT inventory management, patch and change management, user access management, vendor risk management, data security and data leak prevention strategy, business continuity and disaster recovery rigour and drill, etc.”