RBI Bans HDFC Bank from Issuing Credit Cards and other new digital products. The bank has informed the stock exchange that the order from the RBI was issued on December 2, and was in response to outages in the bank’s internet banking, payment utilities over the past two years. The most recent outage took place last month when many customers could not access their digital banking. The bank blamed this on a power failure in its 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.
RBI has also asked the bank’s Board to examines the lapses and fixes accountability. RBI has taken the step citing the complaint on Social Media from large section of the bank’s customers. The major issue is related with server delays with regard to receipt of one-time password and authorization of transactions.
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This is the first time RBI has taken such a drastic action against a large bank. HDFC Bank is the most digital of all Indian lenders and sees over 90% of transactions through non-branch channels. The bank has endeavored to provide seamless banking services to its customers. The bank has assured 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.