look news india
Reserve Bank of India – RBI has banned Kotak Mahindra Bank from adding new customers online and issuing credit cards. But many Indian banks have failed before also. Due to this, PM Narendra Modi's dream of making the country Digital India has also been shattered. What happened that Indian banks failed in this task?
An entire public digital infrastructure was created in India
Over the past few years, not only India but all emerging economies of the world have invested heavily in digital systems to provide financial services to all sections of the population. An entire public digital infrastructure has been created in India. This includes systems like UPI, Jan Dhan Account, Aadhaar Card, RuPay Card and mobile banking. However, banks operating in the domestic market have failed to take advantage of this.
Considerable delay in adopting UPI
If we look at the case of UPI, today payments ranging from Rs 10 for tea on the roadside to lakhs of rupees at a jewelery shop are made through UPI. While banks were supposed to popularize this easy-to-use system, the most famous names for it today are Google Pay and PhonePe, which handle 85 percent of the total UPI transactions.
Banks fail to invest adequately in new technology
Indian banks have failed to invest adequately in this new technology. They remained dependent on old generation technology and this increased the burden on banks. This also shattered the dream of PM Narendra Modi who not only wanted to make India digital but was also in favor of exporting India's digital payment technology so that the world could use it. But now clouds of danger are looming over this plan.
Before Kotak, other banks were also measured
According to an ET news, the country's Finance Minister Nirmala Sitharaman asked the country's banks to modernize, but also issued a warning that they should not compromise with the domestic financial system. Today Kotak Mahindra Bank is facing RBI ban due to not working with this policy. Even before this, such incidents have happened with Indian banks in the country and abroad.
Kotak Mahindra Bank is facing problems in digital transactions
Earlier this month, Kotak Mahindra Bank faced problems in digital transactions, leading to the RBI ban on its online onboarding service. Earlier, when customers of public sector Union Bank of India had also posted on social media about problems in digital and net banking, their UPI service was disrupted for several hours.
RBI has imposed fine on the country's largest private bank
You must remember the incident of the year 2020, when RBI had imposed a penalty on the digital service of HDFC Bank, the country's largest private bank, due to a flaw in the technical system. These incidents were not limited to banks only, but also happened with NBFCs like Mahindra & Mahindra Financial Services, where they added Rs. 100,000 to their loan portfolio. Had to face fraud of Rs 1.5 billion.
Irregularities in connecting customers to the bank's mobile app
Similarly, state-owned Bank of Baroda had suspended dozens of its employees last year for irregularities in linking customers to the bank's mobile app. Outside the country, DBS Group Holdings in Singapore also faced RBI action after its digital services were disrupted.