RBI Stops HDFC Bank to Halt Sourcing New Credit Cards

rbi has questions for hdfc

The Reserve Bank of India (RBI) has asked HDFC Bank to temporarily halt sourcing new credit cards and stop launching its digital business-generating activities planned under Digital 2.0 and other proposed business generating IT applications.

This comes after the recent outage in HDFC Bank's servers from the evening of November 21 to the morning hours of November 22. Many services like internet banking, mobile banking, and payment utility services were disrupted due to this. UPI payments, which is a prevalent payment service across India, also got disrupted for about 12 hours.

HDFC notified their users as it was a minor glitch. "Due to a technical glitch, some of our customers have been having trouble logging into our NetBanking and MobileBanking App. Our experts are working on it on top priority, and we're confident we'll be able to restore services shortly. While we deeply regret the inconvenience caused, there's no cause for undue concern," it had said.

Later it was found out that the outage took place because the bank "underestimated" the growth in payment volumes, and the disruption was more of a capacity issue. Apart from this, A similar incident took place on December 3, 2019, with customers complaining that they were unable to pay their loan EMIs or settle credit card bills on time. HDFC responded in a similar tone that the glitch was minor.

RBI, which regulates all the banks in India, has taken all these into account and has ordered HDFC bank to suspend sourcing of any new credit card and stop its digital business-generating activities planned under Digital 2.0. The order also noted that the restrictions might be uplifted only upon satisfactory compliance, and RBI will also keep a keen observation on the Bank’s activities.