New Delhi: Private sector lender HDFC Bank on Thursday said the Reserve Bank of India (RBI) has asked it to temporarily stop all launches of its upcoming digital business-generating activities and sourcing of new credit card customers after outage at its data centre which impacted operations last month.
“RBI has issued an order dated December 2, 2020, to HDFC Bank Ltd with regard to certain incidents of outages in the internet banking/ mobile banking/ payment utilities of the bank over the past two 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,” HDFC Bank said in a regulatory filing.
HDFC Bank said the RBI order “has advised the bank to temporarily stop all launches of the digital business-generating activities planned under its program Digital 2.0 and other proposed business generating IT applications and sourcing of new credit card customers”.
In addition, the order has directed the bank board to examine the lapses and fixes accountability, HDFC Bank added.
The lender said the above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.
HDFC Bank said “over the last two years, it 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 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,” it added.
Also read: In just 5 years, private banks have narrowed public sector’s huge lead in loans & deposits
On December 2nd 2020, the RBI directed HDFC Bank to temporarily halt all new launches of its digital businesses.
Why? Because over the last two years, customers of the bank have been facing a number of incidents of outages in internet banking, mobile banking and other electronic payment systems of the bank.
And it’s not just HDFC. Similar “outages” have occurred in SBI’s systems, and regrettably, even with the RBI on occasion.
This new and disturbing trend is a major inconvenience to banking operations and calls the integrity of digital banking apparatus into question.
We analyse the cause, consequences and possible constructive measures to tackle this issue.
Comments are closed.