As RBI is taking strict measures against the digital payment platforms, it has now targeted HDFC bank’s digital activities and ordered a temporary ban on it. Also, it ordered the bank to not issue any credit card further. This comes as an announcement after an outage in the bank’s internet banking and digital payment system has been noticed. This impacted the bank’s operations in the last month and until the issue is solved, RBI’s order has to be maintained.
Why RBI imposed such a decision
RBI imposed this decision because of the outage that caused hindrance in the services of the nationalized bank. HDFC Bank said in a regulatory filing that, “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 must soon fix the issues pointed out by RBI
The Reserve bank of India has advised HDFC 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” until further notice. HDFC must work upon fixing the outage issues and comply with the RBI guidelines to avoid any further such bans. RBI also instructed them to “examine the lapses” and fix the “accountability” as soon as possible.
Statements on the bank’s behalf
Though HDFC bank has been one of India’s leading private banks, it still has some potholes in its regulatory advisors. After the ban imposed on them, they have taken to clarify their image by issuing a statement that read, “over the last two years, it 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”. They further added that “The bank has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels, and existing operations. The bank believes that these measures will not materially impact its overall business”. We will have to wait and see how this ban affects the customer base of one of the nation’s leading banks.
The Policy Times suggestion
- If the outage that has occurred last month has impacted the bank’s operations then RBI has taken the right decision to impose a temporary ban on the issuing of credit cards and digital payments operations.
- To further control any such situations from coming up, not only RBI but the Indian government must also make policies so that such outages do not happen further. With so many bank frauds and scams taking place, the common people must be ensured their money is in safe hands.