HDFC Bank to stop digital activities
The Reserve Bank of India (RBI) has banned 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 outage at the main data center of the nation’s largest lender. RBI has asked the bank’s board to review the lapses and correct liability, HDFC Bank stated in a stock exchange filing Thursday, December 3. (Also read: RBI sanctions HDFC Bank for violating Know Your Customer rules)
On November 21, the digital payments business was idle for more than 12 hours, following a power outage at its main data center. The RBI has advised the bank to temporarily halt all launches of its planned digital business generation activities under Digital 2.0 and other proposed business generation IT applications, and secondly, halt the recruitment of new credit card customers. .
“The lifting of the above measures will be considered, after satisfactory compliance with the main critical observations identified by the RBI,” said HDFC Bank in its regulatory filing of the stock exchange.
HDFC Bank added that it has taken several steps to strengthen its IT systems over the past two years and will continue to work to quickly close the balance and engage with the regulator in this regard.
The bank also assured its clients that it expects current supervisory actions to have no impact on its existing credit cards, digital banking channels and operations, and believes that these measures will not have a material impact on its overall business.
HDFC Bank shares turned negative after the news developed. The shares gave up their morning gains of more than 1 percent, and at 12:00 pm, they were trading 1.18 percent lower at Rs 1,390.35 on the BSE.
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