The Reserve Bank of India (RBI) has forbidden India’s largest private lender, HDFC Bank, from adding new credit card customers or launching digital businesses after its digital payment services were hit by a power failure last month.
The central bank has asked the bank’s board to examine the lapses and fix accountability, the lender said in a stock exchange filing on Thursday.
“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 said in a regulatory filing.
HDFC added that RBI “has advised the bank to temporarily stop all launches of the digital business-generating activities planned under its program Digital 2.0 and other proposed business generating IT applications and sourcing of new credit card customers”.
“The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI,” it added, referring to the central bank’s curbs.
On Nov 21, HDFC Bank’s digital payments business was down for more than 12 hours, following a power outage in its primary data centre.
Shares of HDFC Bank turned negative after its statement, giving up earlier session gains of more than 1%, and were last trading down 0.3% by 0516 GMT.
“The bank believes that these measures will not materially impact its overall business,” the lender said.