The Reserve Bank of India ordered HDFC Bank to close down digital launches, new credit cards. The banking regulator issued the order to HDFC Bank with respect to certain incidents of outages in internet banking/ mobile banking/ payment utilities of the Bank over past 2 years, including recent outages in internet banking and payment system on November 21 due to a power failure in the primary data centre.
The Supreme Court will continue hearing pleas seeking an extension of the loan moratorium period and waiver of interest on interest on term loans in view of the Covid-19 pandemic. The Supreme Court is likely to hear 19 petitions challenging the constitutional validity of provisions relating to insolvency of personal guarantors under the IBC on Thursday.
The regulator, HDFC Bank said in a regulatory filing on Thursday, has issued an order on 2 December with regard to certain incidents of outages in the internet banking, mobile banking and payment utilities over the past 2 years. This also includes recent outages in the bank’s internet banking and payment system on 21 November due to a power failure in the primary data centre, the bank said. These restrictions, albeit temporary, come less than two months after Sashidhar Jagdishan’s appointment as the chief executive when a sharper focus on digital banking is being expected.
HDFC Bank said on Thursday that it has, over the last two years, 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. “The bank has always endeavoured to provide seamless digital banking services to its customers. 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,” it said.
The December outage was not owing to any cyberattack but because the lender ‘underestimated’ growth in payment volumes and the disruption was more of a capacity issue, Jagdishan, the then executive director had said in January this year.
In December last year, customers complained that they were unable to pay their loan EMIs or settle credit card bills on time. RBI deputy governor M.K. Jain had said in December that the regulator has taken into account the outage and has deployed a team of experts to investigate the matter. The RBI team will investigate the reasons behind the outage and accordingly give directions to HDFC Bank, Jain had said.
“What we did not realise is the kind of increase in businesses across liabilities, assets and payment products. Even within payment products, we have been patronising multiple channels, whether it is cards or the unified payments interface (UPI) volumes. We underestimated the growth in these volumes,” he had said.