RBI directs HDFC Bank to halt digital launches and sign up new credit card users after latest outage

The Reserve Bank of India (RBI) directed India’s largest private sector bank, HDFC Bank, to temporarily halt all launches of planned digital business generation activities under its Digital 2.0 program, and other digital business applications. Proposed business generation IT, while ordering the bank to stop looking for new credit card customers. The order dated December 2 comes after HDFC Bank’s online banking and payment system was disrupted for another outage on November 21. HDFC Bank has come under fire for several such incidents in the past two years. RBI has directed the management of HDFC Bank to examine the failures and correct the liability.

HDFC Bank is one of the largest private sector banks in India and has a market capitalization of Rs 7.7 lakh crore. The RBI will only do HDFC Bank to add new credit card customers and launch new digital services on “satisfactory compliance with the main critical observations”. HDFC Bank’s latest digital service outage was due to a power outage at the lenders’ data center. This was HDFC Bank’s third such bankruptcy in two years. The order will also put pressure on the bank’s new chief executive, Shashidhar Jagadeeshan. This was the first service interruption under the supervision of the new CEO, who has completed just over a month of his tenure after replacing Aditya Puri in early October.

“The Bank over the past two years has taken various steps to strengthen its IT systems and will continue to work quickly to close the balance and will continue to interact with the Regulator in this regard,” the lender said in a regulatory document. “The Bank has always strived to provide seamless digital banking services to its customers, added HDFC Bank. The private lender assured clients that the current supervisory action will have no impact on their existing operations.

The recent outage affected customers, as ATMs, cards, network banking, and even their bank’s UPI channels were not working normally. The previous two outages were in December 2019 and December 2018. Last year, the central bank said it had sent a team to examine the outage at HDFC Bank. “We have revised it and it has been completely restored. Our team has gone to identify the reasons and find out what we can give them as direction, ”RBI Deputy Governor MK Jain said then.