HDFC Bank to stop digital activities
The Reserve Bank of India (RBI) has curbed HDFC Bank from adding new credit card customers or launching digital businesses after its digital payment services were hit by technical outages last month. In an order dated December 2, 2020, the central bank also took note of the most recent outage on November 21, which occurred due to a power failure in the primary data centre of the country’s largest lender. RBI has asked the bank’s board to examine the lapses and fix accountability, the HDFC Bank stated in a stock exchange filing on Thursday, December 3. (Also Read: RBI Penalises HDFC Bank For Violating Know Your Customer Norms )
On November 21, the digital payments business was down for more than 12 hours, following a power outage in its primary data centre. Primarily, the RBI has advised the bank to temporarily stop all launches of its digital business generating activities planned under Digital 2.0 and other proposed business generating IT applications, and secondly, halt the sourcing of new credit card customers.
“The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI,” said HDFC Bank in its regulatory stock exchange filing.
HDFC Bank added that it has taken several measures to fortify its IT systems over the last two years and will continue to work to swiftly to close out the balance and would continue to engage with the Regulator in this regard.
The bank also reassured its customers stating that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels, and existing operations and believes that these measures will not materially impact its overall business.
Shares of HDFC Bank turned negative after its statement, giving up earlier session gains of more than 1 per cent, and were last trading down 0.3 per cent by 0516 GMT.