What has the RBI done? - How RBI's curb on HDFC business will impact you

 

What has the RBI done? - How RBI's curb on HDFC business will impact you

Agencies

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Tech glitches and impact

The Reserve Bank of India’s move to temporarily ban private lender HDFC Bank from onboarding new credit card clients and launching digital initiatives has prompted questions on the sweep of services that will be affected. ET explains how the RBI order will affect those that bank with the country’s most valuable lender.

Agencies

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What has the RBI done?

The Reserve Bank of India has asked HDFC Bank to temporarily stop all digital launches and sourcing new credit card customers. The RBI order also states that the lender’s board needs to examine these lapses and fix accountability

Reuters

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How does it affect you?

The RBI move does not affect existing clients. You will be able to access your mobile or internet banking solutions. You will also be able to use your existing credit card, open bank accounts, borrow loans and conduct a variety of other banking transactions.

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What is allowed and not allowed?

If you are an existing credit card user and your card expires, the bank will issue you a new card. If your card gets lost, you will be issued a replacement. But, since the bank will have to stop sourcing new credit card customers, no new clients will be able to avail these services until the RBI lifts the ban.

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Why did the RBI do this?

This unprecedented move by the RBI came after the bank suffered its third big outage in the span of just two years. The bank faced its first big outage in November 2018 while upgrading its mobile application and internet banking. A year later, it faced its second outage in December 2019, forcing RBI to send its team to study the issues the lender was facing. Another incident happened on November 21 due to a power outage in its Primary Data Centre, after which customers weren’t able to access digital offerings for 2 days.

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How does it disrupt HDFC Bank’s digital rollout?

Some of the bank’s strategic digital initiatives -to improve the front end digital experience, enhance digital origination, enable straight through processing, build next generation of mobile and internet banking, and create APIs based banking on the edge - would now be readied and launched after the approval and clearance from the regulator.