HDFC Bank submits plan of action to RBI, hope to fix outage issue in 3 months

Public confidence in digital banking has to be maintained, Das had said in December.HDFC Bank, the largest lender by assets in the private sector, has been classified as a systemically important entity by the RBI in the past.

PTI | New Delhi | Updated: 22-01-2021 15:39 IST | Created: 22-01-2021 15:39 IST
HDFC Bank submits plan of action to RBI, hope to fix outage issue in 3 months

The country's largest private sector lender HDFC Bank has submitted a detailed plan of action to the RBI to address repeated service disruption issues due to outage and hopes to improve its technology platform in three months.

Progress is being made on the plan of action provided to the RBI and the bank has taken this positively as it will raise the standard, according to a senior official of HDFC Bank.

The action plan will take 10-12 weeks for implementation, and further timeframe will depend on the RBI's inspection. Based on the satisfaction level, the regulator will lift the ban, the official said at an analysts meet.

Last month, the Reserve Bank of India (RBI) temporarily barred HDFC Bank from launching new digital banking initiatives and issuing new credit cards after taking a serious view of service outages at the lender over the last two years.

''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 had said in a regulatory filing.

The bank has been penalised for two major outages, one in November 2018 and the other in December 2019.

Taking a stern view of the repeated outages, RBI Governor Shaktikanta had said the regulator had some concerns about certain deficiencies and it was necessary that the HDFC Bank strengthens its IT systems before expanding further.

''... we cannot have thousands and lakhs of customers who are using digital banking to be in any kind of difficulty for hours together and especially when we are ourselves giving so much emphasis on digital banking. Public confidence in digital banking has to be maintained,'' Das had said in December.

HDFC Bank, the largest lender by assets in the private sector, has been classified as a systemically important entity by the RBI in the past. It is also the largest issuer of credit cards and has a significant share in the payment processing segment.

The bank is the largest issuer of credit cards and had 1.49 crore customers as of September 2020 while on the debit cards front, it had 3.38 crore customers.

Earlier, HDFC Bank's Managing Director and Chief Executive Officer Shashidhar Jagdishan had apologised to customers and promised to work on the deficiencies.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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