Kotak Mahindra Bank share price touches 52-week high as RBI lifts key restrictions

Kotak Mahindra Bank share price rose over 2% to touch a 52-week high on Thursday’s session following the Reserve Bank of India’s (RBI) removal of restrictions on its digital banking activities. Almost 10 months after the restrictions were implemented, the bank is now permitted to issue new credit cards and onboard customers through its website and mobile application.

The RBI expressed that it is “satisfied” with the corrective actions taken by the private sector bank, permitting it to issue new credit cards and acquire new customers via online and mobile banking platforms.

According to reports, Kotak conducted a third-party IT audit with an external consultant and implemented a variety of other initiatives.

During the tenure of former Governor Shaktikanta Das, the RBI imposed operational limitations on several non-compliant entities as a supervisory action, including enforcing nearly 15 months of restrictions on HDFC Bank, the largest private sector lender, until March 2022.

Das clarified that there are months of communication, alerts, and discussions that lead up to such an order, noting that they are regarded as a corrective measure.

During his first policy review last week, his successor Sanjay Malhotra suggested a more lenient stance on regulatory matters considered harmful by banks and expressed a preference for using it less frequently.

He also mentioned that the financial implications of regulatory actions must be evaluated before proceeding with any decisions.

“Having satisfied itself based on the submissions, and remedial measures undertaken by the bank, the Reserve Bank has decided to lift the aforementioned restrictions placed on KMB,” the RBI said.

“We will continue to work closely with the RBI to shortly resume digital onboarding of new customers and issuing fresh credit cards,” it added.

Here’s what brokerage says

Motilal Oswal Financial Services notes that the private bank has shown strong operational performance despite facing challenging macroeconomic conditions and regulatory constraints, which it has skillfully addressed for an early resolution. This development highlights the regulator’s reassurance regarding the corrective measures implemented by the bank to address various deficiencies. It also confirms the bank’s robustness and the effectiveness and strategic vision of the new management team in successfully navigating a critical situation, which raised significant concerns about the institution following multiple changes in its leadership.

“After being Neutral on the stock for almost four and a half years, we had recently upgraded our rating on Kotak Mahindra Bank and we maintain our positive view. Reiterate BUY with a target price of ₹2,200 (premised on 2.3x Sep’26E),” said the brokerage in its report.

Kotak Mahindra Bank share price today opened at ₹1,969.90 apiece on the BSE, the stock touched an intraday high of ₹1,987.55, and an intraday low of ₹1,965.75.

Technical Views 

Sachin Gupta, Senior Research Analyst at 5paisa stated that Kotak Bank continued its momentum for the third consecutive week, reaching a 52-week high of 1,992.80 during Thursday’s session. On the weekly chart, the stock is trading near the key breakout level of 2,000 and is also holding above the Upper Bollinger Band, indicating bullish strength in the short to medium term. Additionally, on the daily chart, the stock has been rising with higher volume and a positive crossover in the RSI, signaling bullish momentum.

“Based on this structure, we expect buying opportunities in Kotak Bank above the 2,000 level, with a potential target of 2,150 and a stop loss at 1,920,” added Gupta.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.