RBI asks HDFC Bank to temporarily stop sourcing of new credit card customers

The Reserve Bank of India (RBI) has issued an Order dated December 02, 2020 ("Order") to HDFC Bank Limited (the "Bank") with regard to certain incidents of outages in the internet banking / mobile banking / payment utilities of the Bank over the past 2 years, including the recent outages in the Bank's internet banking and payment system on November 21, 2020 due to a power failure in the primary data centre. The RBI vide said Order has advised the Bank to temporarily stop i) all launches of the Digital Business generating activities planned under its program - Digital 2.0 (to be launched) and other proposed business generating IT applications and (ii) sourcing of new credit card customers. In addition, the Order states that the Bank's Board examines the lapses and fixes accountability.

The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.

The Bank over the last two years has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the Regulator in this regard.

The Bank has always endeavored to provide seamless digital banking services to its customers. The Bank has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations. The Bank believes that these measures will not materially impact its overall business.

Shares of HDFC Bank Ltd was last trading in BSE at Rs.1406.95 as compared to the previous close of Rs. 1433.55. The total number of shares traded during the day was 284792 in over 14791 trades.

The stock hit an intraday high of Rs. 1432 and intraday low of 1395.45. The net turnover during the day was Rs. 401526912.

Source : Equity Bulls

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