RBI Orders HDFC Bank To Stop Issuing New Credit Cards, Stop All Digital Activities; But Why?

This is a huge embarrassment for India’s 2nd biggest private bank: HDFC Bank.

Reserve Bank of India or RBI has ordered HDFC Bank to stop issuing new credit cards, and stop all new digital activities immediately.

But why?

RBI To HDFC Bank: Stop Issuing New Credit Cards

In a notification dated December 2nd, 2020, RBI has asked HDFC Bank to stop these activities:

• Issuing new credit cards with immediate effect. This means no new credit card user will be able to  open thier account in HDFC bank
• Stop all Digital 2.0 activities, which HDFC Bank had planned for attracting new customers
• All new proposed businesses via applications and tools

RBI said, “The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI,”

In short, RBI has crippled HDFC Bank’s digital activities and business expansion plans.

This has literally stopped HDFC Banks plans to onboard new customers.

What Is The Reason?

In the last few months, HDFC Bank has experienced serious IT related issues, which prevented customers from carrying on day to day activities.

The last outage on November 21st was reported all over India, as HDFC Bank customers were not able to carry UPI transactions, or transfer money or withdraw cash from ATM.

HDFC Bank reported that this happened due to some technical glitch at their data centres, but it was a huge issue.

HDFC Bank has assured all their customers that these current ‘supervisory actions’ wont have any impact on their banking operations.

HDFC Bank said, “The  Bank has always endeavoured to provide seamless digital banking services to its customers and has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels,” 

We will keep you updated, as more details come in.