RBI tells HDFC Bank board to fix 'accountability', examine lapses

The Reserve Bank of India (RBI) on Thursday asked HDFC Bank's board to examine lapses and fix accountability over frequent outages in its digital payment services. The central bank has also forbidden India's largest private lender from adding new credit card customers or going ahead with its digital innovations.

On Thursday, HDFC Bank informed the exchanges about the latest action by the RBI. The Bank's official notification said: "RBI has issued an order dated  December  02, 2020  ("Order")  to HDFC Bank Limited  (the "Bank") with regard to certain incidents of outages in the internet banking/ mobile banking/ payment utilities of the Bank over the past 2 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".

Also read: RBI cracks down on HDFC Bank's internet outages; stops signing up of new credit card customers

RBI's order has come in the wake of rising outages in internet banking/mobile banking/payment utilities of the bank in the past two years. On November 21, HDFC Bank's entire payment stack had gone down due to a technical glitch. The unexplained outage of the Bank's data centres halted internet banking, UPI, IMPS, and ATM operations.

However, the bank has assured that RBI's order will not have any impact on its existing credit cards, digital banking channels, or existing operations. The lender said the above measures shall be considered for lifting, upon satisfactory compliance with the major critical observations as identified by the RBI.

"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," HDFC added.

Meanwhile, shares of HDFC Bank declined over 2 per cent in early trade on Thursday after the RBI's order. The stock dipped 1.66 per cent to Rs 1,383.65 on the BSE. At the NSE, it declined by 1.50 per cent to Rs 1,385.85.