Large numbers of customers signing up through its digital platform Kotak811 caused sporadic outages, two Kotak officials and two others with knowledge of the matter, speaking on condition of anonymity.
Shares in Kotak fell by as much as 13% to their lowest since November 2020, before paring losses slightly in late trade.
The lender is now valued at INR 3.67 trillion ($44.06 billion), and Jefferies cut its price target for the stock by 4%.
Kotak did not immediately respond to a request for comment.
It said on Wednesday it had adopted technology to strengthen its IT systems and that it believed the ban would not materially impact its overall business.
Kotak CEO Ashok Vaswani attempted…
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