HDFC Bank’s digital initiatives hit pause after RBI order

HDFC Bank’s digital initiatives hit pause after RBI order
Photo Credit: Reuters
3 Dec, 2020

The Reserve Bank of India (RBI) has asked HDFC Bank to temporarily stop the business generating IT (information technology) applications and other digital business launch activities as well as sourcing new credit card customers.

The order from the banking regulator comes in the light of incidents of outages in HDFC Bank’s internet banking and payment systems.

RBI, in an order dated December 2, told HDFC Bank that the board should examine the lapses and fix accountability for the outages. The RBI took three incidents of outages since 2018 into consideration for issuing the order.

In a statement on Thursday, Sashidhar Jagdishan, managing director and CEO of HDFC Bank said that the bank had strengthened its IT infrastructure and systems after two outages in November 2018 and December 2019. This was followed by another incident of outage on November 21 this year. 

“Unexpectedly another incident happened on Nov 21, 2020 and the primary reason for the same is the power outage in our Primary Data Centre. We are working on war footing to strengthen this area also now,” Jagdishan said. 

The order from RBI has put HDFC Bank’s launches under Digital 2.0 initiative and other rollouts, including straight through processing, next generation mobile and internet banking, API based banking, on hold. Jagdishan said that the initiatives will be released post approval and clearance from the banking regulator.

In the filing, the company also specified that the current order will not have an impact on existing credit cards and digital banking channels.