Why does the login fail with the error "/bin/bash No such file or directory" with newly installed kernel?

Issue

• After installing the new kernel package and rebooting the system with the new kernel it is not possible to login via console or ssh.
• Currently running version 2.6.32-358.23.2.el6 of the kernel with which boot is successful and login is possible too!
• The problem is reproducible when booting with kernel-2.6.32-431.29.2.el6 and kernel-2.6.32-504.1.3.el6.
• After booting with new kernel version and being presented with a login prompt at the console the system hangs after user name input.
• When trying to connect via ssh the following error message is seen:

[test@example-server ~] $ ssh user@example-server
user@example-server's password:
/bin/bash: No such file or directory
Connection to example-server closed.
[test@example-server ~] $

• The /var/log/messages show following logs when booted with old kernel.

example-server kernel: Linux version 2.6.32-504.1.3.el6.x86_64 (mockbuild@x86-022.build.eng.bos.redhat.com) (gcc version 4.4.7 20120313 (Red Hat 4.4.7-9) (GCC) ) #1 SMP Fri Oct 31 11:37:10 EDT 2014
example-server /sbin/mingetty[11053]: tty1: can't exec /bin/login: No such file or directory
example-server init: Failed to spawn tty (/dev/tty1) main process: unable to execute: No such file or directory
example-server init: Failed to spawn readahead-collector post-stop process: unable to execute: No such file or directory