MUMBAI: In a major blow to HDFC Bank, the Reserve Bank of India (RBI) has asked the private sector lender to temporarily halt all launches of its digital business generation activities under the “Digital 2.0” program along with hiring new credit card customers.
The regulator, HDFC Bank said in a regulatory filing on Thursday, issued an order on Dec. 2 regarding certain incidents of outages in internet banking, mobile banking and payment services over the past 2 years. This also includes recent outages in the bank’s internet payment and banking system on November 21 due to a power outage at the primary data center, the bank said.
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“Furthermore, the order establishes that the bank’s Board examines the failures and corrects the liability,” he said, adding that the lifting of the restrictions will be considered based on satisfactory compliance with the main critical observations identified by RBI.
These restrictions, while temporary, come less than two months after the appointment of Sashidhar Jagdishan as CEO, when a sharper focus on digital banking is expected.
HDFC Bank said on Thursday that, in the past two years, it has taken several steps to strengthen its IT systems and will continue to work quickly to close the balance and continue to engage with the regulator in this regard.
“The bank has always strived to provide seamless digital banking services to its customers. The bank has been taking conscious and concrete steps to remedy recent disruptions in its digital banking channels and assures its clients that it expects current supervisory actions will not have an impact on their existing credit cards, digital banking channels and operations. “, said. .
He added that these measures “will not have a material impact on its business in general.”
In December of last year, clients complained that they were unable to pay EMIs on their loans or pay off credit card bills on time. RBI Deputy Governor MK Jain had said in December that the regulator had taken the outage into account and had deployed a team of experts to investigate the matter. The RBI team will investigate the reasons behind the disruption and will direct HDFC Bank accordingly, Jain said.
The December outage was not due to any cyberattacks, but rather because the lender ‘underestimated’ growth in payment volumes and the outage was more of a capacity issue, said Jagdishan, the then CEO in January this year.
“What we did not realize is the type of business increase in liabilities, assets and payment products. Even within payment products, we have been sponsoring multiple channels, be it cards or Unified Payment Interface (UPI) volumes. We underestimate the growth of these volumes ”, he had said.
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