The Reserve Bank has directed HDFC Bank to stop the launch of all digital business generating activities under Digital 2.0. Customers were having problems due to technical problem.
In the last month of last year, the Reserve Bankal (RBI) of India banned HDFC Bank (HDFC Bank) from launching new digital services and issuing new credit cards. Now RBI has entrusted the responsibility of auditing the entire IT infrastructure of HDFC Bank to an external professional IT firm. Under Section 30 (1) B of the Banking Regulation Act, 1949, RBI has appointed an external professional IT firm to audit the entire IT infrastructure of the bank.
The Reserve Bank has asked HDFC Bank to stop the launch of all digital business generating activities under Digital 2.0. The bank has banned all proposed businesses in which IT is to be used. Apart from this, there has been a ban on issuing new credit cards. All related regulatory compliance will be completed by the bank. Only then will the RBI remove all these restrictions.
What is the matter
Last month, the Reserve Bank had temporarily banned HDFC Bank from launching new digital banking initiatives and issuing new credit cards. Taking this initiative seriously, the central bank took this step during the last two years. In a communication sent to the stock markets by HDFC Bank, it was stated that the order was issued by the Reserve Bank on December 2, 2020.
Why did RBI take this step
Actually, customers were having trouble due to technical problem in HDFC Bank, due to which the RBI took this step. The RBI order came on 2 December.
Customers had complained about problems in HDFC Bank net banking and payment system. Actually, customers were having trouble due to technical problem in HDFC Bank, due to which the RBI took this step. According to a report revealed last month, power failure was reported in the primary data center of HDFC Bank.
In view of this, RBI now wants to know about its details so that the bank’s ATM operations, cards and UPI transactions are not interrupted. HDFC Bank has 15,292 ATMs in 2,848 towns / cities across the country. HDFC Bank has issued 1.49 crore credit cards and 3.38 crore debit cards.
HDFC Bank said that its services were disrupted on 21 November due to a power failure at the primary data center. Earlier, in November, 2018 and December, 2019, the bank was fined for disrupting services.
Reserve Bank Governor Shaktikanta Das had said that the regulator is concerned about some shortcomings in the bank and it is imperative that HDFC Bank strengthen its IT system before further expansion.
What will happen to customers now
Experts say that this decision will reveal the IT flaws of HDFC Bank. Hence, RBI will order the bank to fix it. Due to this, customers will be able to get good services.
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