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RBI Stops HDFC Bank From Adding New Credit Card Customers, Launching New Digital Business, Here’s Why

The Reserve bank of India has barred HDFC bank from issuing credit cards to new customers or even launching a new digital business after reports of its digital payment services being hit by a technical outage last month.

Source – Bloomberg Quint

The RBI, in its December 2 order, quoted a November 21 power outage which had occurred in the primary data center of HDFC bank. For the unaware, HDFC bank is the biggest lender in India.

As per the reports, RBI has asked the bank’s board to examine the lapses and fix accountability, the HDFC Bank stated in a stock exchange filing on Thursday, December 3

The power outage on November 21 spanned for over 12 hours. Noticing the same, RBI, in an order, advised HDFC bank to stop all digital launches planned under Digital 2.0 and other proposed business generating IT applications, and secondly, halt the 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,” HDFC Bank said in its regulatory stock exchange filing.

HDFC Bank said that it is looking into the issue and assured to engage with regulators to resolve the same.

HDFC Bank has also assured that the current supervisory action will have no impact on the existing credit cards, digital banking channels and existing operations.

The news obviously resulted in a decrease in the share value of the bank. The shares gave up their early-morning gains of more than 1 per cent and were trading lower by 1.18 per cent at ₹ 1,390.35 later in the day on the BSE.

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