Ban On HDFC Bank To Last For 6 Months? HDFC May Lose 10 Lakh New Credit Card Users
More bad news coming in for HDFC Bank.
After RBI placed a ban on HDFC Bank’s new credit card users and several digital banking initiatives, now reports are coming in that this freeze may last for 3-6 months.
This means HDFC Bank is in deep trouble.
Experts Say HDFC Bank Freeze Can Last For 3-6 Months
As per an exclusive report by Times of India, HDFC Bank may have to experience the ban on onboarding new credit card users and digital banking initiatives for months to come.
Infact, this RBI freeze can last for 6 months.
Suresh Ganapathy of Macquarie said, “We believe the ban could be in place for three-six months as the bank would at least take a quarter to resolve some of these issues and then invite the RBI for a review, after which the regulator may relax the restrictions, in our view.”
This estimation of 3-6 months have been made after taking into account the time it needs to upgrade and enhance their servers.
How Will This Impact HDFC Bank?
Pretty serious impact.
Around 1.7 lakh new HDFC Bank credit card users are added per month, which will now completely stop.
If the ban is imposed for 6 months, then it will means around 10 lakh new users can’t be onboarded and this means huge business loss for the bank.
Besides, their new digital banking initiatives will be halted, such as automated car loans via their portal.
What Is Wrong With HDFC Bank?
As per the experts, HDFC Bank has successfully grown their business, but hasn’t been able to keep up the pace with technology and the infrastructure behind it.
For example, their loan business has grown by 16-17%, which is 3-times more than what their system can support.
Besides, 30-40% of all digital payments are being done on HDFC Bank’s platforms.
We hope that HDFC Bank is able to upgrade their technology, and ensure seamless connectivity and digital payments.
Else, it can be a huge embarrassment for them.
We will keep you updated, as more details come in.