The business restrictions imposed by the Reserve Bank of India (RBI) on Kotak Mahindra Bank for non-compliance in the areas of IT inventory management signals the central bank's eagerness to stem any systemic risks in the banking sector, experts said.

They further added that the move is likely to make other lenders in the industry more cautious about their compliance with the regulations.The intent behind the regulator's action is very clear - they do not want any systemic risk emanating from gaps that they have identified and highlighted to the banks,” said Karan Gupta, Director & Head - Financial Institutions, India Ratings & Research.

Adding to this, Shreyansh Shah, Research Analyst, StoxBox said the actions are much beyond an entity-level action and is to prevent systemic risks in the overall banking sector.