Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions

Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions
Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions/Mint.
Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions
Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions/Mint.

Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions

Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions

Kotak Mahindra Bank Faces Steep Share Price Drop Amid RBI Restrictions

Kotak Mahindra Bank witnessed a significant drop in its share price, plummeting by 10.85% to close at ₹1,643 on the BSE following the Reserve Bank of India’s (RBI) decision to bar the bank from onboarding new customers online and via mobile banking due to supervisory concerns over its technology platforms.

This sharp decline resulted in a substantial decrease in the bank’s market capitalization, amounting to ₹39,768.36 crore, with its market cap falling from ₹3,66,383.76 crore to ₹3,26,615.40 crore. Shareholders, including founder Uday Kotak, experienced considerable losses, with Kotak losing approximately ₹10,225 crore in a single day.

Mutual funds and insurance companies, significant stakeholders in the bank, also incurred losses, with mutual funds likely losing over ₹5,000 crore and insurance companies facing a decrease in value of around ₹3,456 crore, with Life Insurance Corporation of India (LIC) bearing the brunt of about ₹2,569 crore.

The ban on onboarding new customers via online channels is expected to impact the bank’s earnings growth, leading analysts to revise their target prices downward. Emkay Global Financial Services analysts have adjusted their March 2025 target price to ₹1,750 per share from ₹1,950, suggesting limited upside potential for Kotak Mahindra Bank’s share price in the near term.

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