RBI Bars HDFC Bank From Issuing New Credit Cards Due To Outages
HDFC Bank's digital business launches and sourcing of new credit card customers has been temporarily halted by the RBI
The Reserve Bank of India has pulled up India's second largest private bank, HDFC Bank over the number of banking outages, and has issued an order to temporarily halt its digital business launches and the sourcing of new credit card customers.
The last outage it faced was on November 21, and the third banking outage over a period of two years. The outages impacted its internet banking and payments systems, according to a filing with Indian stock exchanges (National and Bombay Stock Exchange) by the bank. It attributes the outage to a power failure at one of its primary data centers.
RBI has asked the bank's board to examine the lapses, and to fix accountability. The measures would be lifted by the RBI on satisfactory compliance with the central bank's observations, the filing says.
In particular, the filing specifies HDFC Bank's pending launches under its 'Digital 2.0' initiative (which is yet to be rolled out) and other proposed business generating IT application.
HDFC Bank has the country's largest credit card base having issued roughly a quarter (1.497 crore) of all outstanding credit cards (5.86 crore) in the banking system, according to latest September card and ATM data of the RBI, which it releases monthly.
In December 2019, it faced a two-day outage over what it called a "technical glitch" and in December 2018 faced a week-long outage concerning its mobile banking application after a banking features rollout.
No impact on existing customers
HDFC Bank said that the restrictions will not impact any of its existing customers. It has assured its customers that the restrictions will have no effect on its existing credit card, net banking operations and the functioning of the bank.
It also does not believe that the restrictions will have any material impact on its overall business.
Also Read: RBI Bats For Large Corporate Houses To Own Banks: All You Need To Know
HDFC Bank was trading at ₹1382.20 on the National Stock Exchange, lower by1.76%. It's closest rival in the credit card space - SBI Cards - is trading at ₹837.85, up 5.13% on the same exchange.
Do you always want to share the authentic news with your friends?