Shares of Kotak Mahindra Bank Ltd crashed 13% and hit a 52-week low of Rs 1,602 on 25 April after the Reserve Bank of India ordered the private lender to stop issuing new credit cards and onboarding new customers via its digital channels.

Deep-seated concerns about compliance and risk management at Kotak Mahindra Bank compelled the RBI to step in. The regulatory body highlighted substantial gaps in the company’s digital and security platforms that had persisted for over two years. 

In a statement, the RBI said, “In the absence of a robust IT infrastructure and IT Risk Management framework, the bank’s Core Banking System (CBS) and its online and digital banking channels have suffered frequent and significant outages in the last two years, the recent one being a service disruption on 15 April, 2024, resulting in serious customer inconveniences.”

In a significant transaction that occurred before the market opening, about 16.3 lakh shares of the lender were exchanged. As of right now, neither the buyers nor the sellers of that deal are known.

This downturn has dealt a severe blow to Kotak Mahindra Bank, wiping off Rs 30,000 crore from its market capitalization. Furthermore, the stock hit a 52-week low on Thursday, with its market capitalization currently standing at Rs 3.3 lakh crore.

At 3:30 pm, Kotak Mahindra Bank shares closed 10.73% lower at ₹1,645 on NSE.