Kotak Mahindra Bank is reportedly hiring around 400 engineers this year to upgrade its technology systems after criticizing RBI for lapses. Last week, the RBI had asked Kotak to stop digitally onboarding customers and issuing credit cards due to deficiencies in its IT infrastructure.
Its chief executive officer said the RBI order on the lender has hit the private lender’s franchise and reputation, though its financial impact is expected to be minimal. “Clearly the RBI order had an impact on both our franchises (and) our reputation, which doesn’t look good,” Ashok Vaswani said at a media briefing in Mumbai. “…We are committed to coming back stronger; that is our number one priority.”
Vaswani said the bank will double its efforts, resources and funds to address IT-related issues. He said the bank currently spends 10% of its total expenditure on IT. He said Kotak is already working with the RBI to appoint an external auditor for the IT systems and the process should be completed soon.
According to Milind Nagnoor, the bank’s chief technology officer, the lender has added more than 500 engineers in the last two years, according to a Bloomberg report. Kotak Mahindra Bank reported a 26% rise in fourth-quarter net profit, exceeding analysts’ expectations, boosted by higher core lending income and healthy loan growth.
