The Reserve Bank of India (RBI) on Wednesday asked one of India’s biggest private banks HDFC Bank to stop launches of its upcoming digital business generating activities under its program ‐ Digital 2.0 and issuance of new credit cards. The decision was taken following repeated outages in its electronic banking services. The bank has also been asked to examine the lapses and fix accountability.
HDFC Bank informed the stock exchange about the development on Wednesday. It said that the RBI’s order was issued on December 2 in view of outages in the bank’s internet banking/payment utilities/ mobile banking in last two years. the recent outage took place on November 21 resulting in great inconvenience to customers who could not access the digital services on that day. Although, the issue was resolved quickly by the bank, concerns cropped up on the reliability of digital channels of the bank.
The bank said the outage was caused by power failure in its primary data centre. The bank added it would look into the critical observations made by the RBI and take measures to prevent outages in future.
HDFC Bank said over the past two years, it has taken several measures to fortify its IT systems. The bank said it will engage in conversation with its regulator in order to close out the balance. HDFC Bank assured the customers that the RBI move will not have any impact on existing credit cards.
HDFC Bank’s group head of IT and CIO Munish Mittal had resigned earlier this year in July. Ramesh Lakshminarayanan of Crisil
was named as the new CEO by the bank last month.
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This is the first time, India’s central bank has asked a major bank to stop all new digital launches. Although, the issue of outage is not limited to HDFC bank alone. The State Bank Of India’s application YONO has not been working properly since the past two days and many users have complained on social media about getting an error while trying to login to the application.