RBI temporarily bars HDFC Bank from issuing new credit cards, launching digital initiatives

Mumbai/ New Delhi: In an unprecedented move, the Reserve Bank has temporarily barred HDFC Bank from launching digital banking initiatives and issuing new credit cards after taking a serious view of service outages at the country's largest private sector lender over the last two years.

The Reserve Bank of India's order came on Wednesday, days after the last instance of service outage across its digital banking channels, including internet banking, mobile banking and other payments. The outage, which happened on November 21, had severely inconvenienced customers, the bank informed the exchanges on Thursday.

In December 2018, the bank's new mobile application crashed within hours of its launch in what was attributed to the inability of the servers to handle the heightened traffic. Exactly a year later, its online channels were down during the salary time. After the second incident, the RBI had said that it was looking into the glitches.

Usually, the RBI slaps monetary penalties on erring entities that comes under its regulatory framework.

On Thursday, HDFC Bank said the latest incident on November 21 was a result of a power failure in its primary data center.

The central bank has also asked HDFC Bank to ensure that its board "examines the lapses and fixes accountability".

The bank is the largest issuer of credit cards and had 1.49 crore customers as of September this year while on the debit cards front, it had 3.38 crore customers.