RBI orders HDFC Bank to stop launch of new digital banking initatives and credit card issuance
The Reserve Bank of India has ordered HDFC Bank Ltd to stop launching new digital banking initiatives and credit card issuance following a series of glitches that affected millions of its internet banking customers.
The last glitch in the internet banking and payment system was on November 21 which was a result of power failure at the bank’s primary data centre. RBI took its latest step amid a surge in online payments as people now prefer online transactions for fear of infections during the ongoing COVID-19 pandemic. The central institution has also directed the bank’s board to examin the lapses and fix accountability. RBI said curbs will be lifted, once, the central institution is satisfied that the bank complied with its critical observations.
Sashidhar Jagdishan, who took up the reins as HDFC Bank’s CEO two months ago, said they have taken help of external expertise. “We have taken help of external expertise, understood what needs to be done further, and have substantially implemented the inputs to strengthen our IT infrastructure and systems,” he said. “Unexpectedly, another incident happened on 21 November, and the primary reason for the same is the power outage at our primary data centre. We are working on a war footing to strengthen this area.”
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The HDFC Bank said it has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels. It 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. Earlier, the bank had attributed the outage to an underestimated growth in payment volumes, and not because of a cyberattack.
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