Reserve Bank restricts HDFC Bank, suspends issuance of new credit cards

New Delhi: The Reserve Bank of India (RBI), India’s apex bank, has temporarily banned private sector HDFC Bank from issuing digital transactions as well as new credit cards. The orders were issued by the central bank after a breakdown in HDFC Bank’s data center last month. To avoid any confusion, HDFC Bank itself has informed the stock market about this.

RBI has issued orders to HDFC Bank Limited on December 2, 2020. The orders are related to complaints found in the bank’s internet banking, mobile banking, payment banking in the last two years. This includes shutting down the bank’s internet banking and payment system on November 21, 2020 due to a power outage at the primary data center, HDFC said.

The RBI has asked the bank to suspend the distribution of Digital Launches and new Credit Cards to its customers, including its Digital 2.0 and other proposed IT uses.

The RBI has also been tasked with investigating the bank’s system.

HDFC Bank has taken a number of steps in the last two years to strengthen its IT system and the rest of the work will be completed soon, the bank assured customers and investors.

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At present, the bank is taking strict steps to resolve the grievances. However, the decision will not affect credit cards, digital banking channels and transactions currently in use, the bank said. The bank hopes that this will not make any difference to the bank’s business.

Earlier, the RBI had approached HDFC to find out the reasons for frequent disruptions in online services. The ban imposed by the RBI is temporary. Notably, this is the third time in the last two years that some restrictions have been imposed on HDFC Bank.

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