HDFC Bank to stop all launches: RBI

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HDFC Bank to stop all launches: RBI

RBI has ordered HDFC bank to stop all new and unannounced launches related to digital banking initiatives and suspend the process of issuance of credit cards until it has come up with the solution for the mishap that caused a series of glitches which affected millions of HDFC users negatively that uses net banking option.

HDFC, on Thursday, has stated in a regulatory filing that The Reserve Bank of India has ordered HDFC to halt all its new launches on 2nd December 2020 after HDFC has faced a substantial amount of outages in the mobile banking and internet banking systems over the course of two years. The latest mishap occurred on 21st November 2020 and was caused by a power outage in the bank’s central data centre, HDFC stated.

As amid the COVID-19 pandemic, where people are afraid to go into the crowded banks and prefer the online mode of the transaction such as net banking and mobile banking, RBI has concerned itself with over-the-internet banking as a surge in the online mode of payment has occurred.

Sashidhar Jagdish, who was appointed HDFC’s chief executive officer less than a couple of months ago, faces his first major challenge with this RBI curb. Investors have been expecting HDFC as a more online friendly Bank under Shashidhar Jagdish.

In a message posted on HDFC bank’s website, Shashidhar Jagdish has mentioned that the bank has started taking all the necessary steps and precautions. He also said that HDFC is trying to strengthen its IT infrastructure and has been taking help from external experts and determining new steps that the bank can benefit from. The bank is sure to overcome this and HDFC will strengthen the online sector in the process, Jagdish mentioned in his post.

HDFC bank has mentioned that the curb will, however, not affect HDFC’s existing customers.

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