India’s central bank, the Reserve Bank of India (RBI), has ordered HDFC, one of India’s largest private sector banks, not to launch any more digital businesses or take on new credit card customers until it meets “satisfactory compliance with the major critical observations”.
The official decreet came down after HDFC Bank’s internet banking and payment system were disrupted yet again by yet another outage.
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Over the past two years, the bank has been plagued by three separate instances of such disruptions.
This latest digital services outage, in late November, was due to a power failure at the lenders data centre. It hit customers as the bank’s ATMs, cards, net banking, and even its UPI channels were not functioning normally.
The previous two disruptions happened in December of 2019 and December of 2018.
Identifying reasons and setting a way forward
The central bank had last year said that it had sent a team to examine the outage at HDFC Bank. “We have checked it up and it has been restored fully. Our team has gone to identify the reasons and find out what we can give them as a direction,” RBI deputy governor MK Jain had then said.
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By GlobalDataRBI has directed HDFC Bank’s top examine the lapses and fix accountability.
The order will also put pressure on the bank’s newly appointed CEO, Shashidhar Jagadeeshan. This was the first service outage under the new CEO’s watch who has completed a little over a month of his tenure after replacing Aditya Puri earlier in October.
“Measures to fortify IT systems”
In a regulatory filing, the lender said:
“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 endeavoured to provide seamless digital banking services to its customers.”
HDFC has assured customers that the current supervisory action will not have any impact on its existing operations.
