Restrictions on HDFC Bank after outage: What RBI's order means, and likely impact on customers

The RBI order comes after another recent major outage, the third such instance in a span of two years, at HDFC Bank which is the country's leading private lender.

Following frequent outages in online services, the RBI has now told HDFC Bank to halt all digital launches and issuance of credit cards on a temporary basis.

The board of the bank must look into why these outages are occurring and find out who is accountable, the order stated.

The central bank order comes after another recent major outage, the third such instance in a span of two years, at HDFC Bank which is the country's leading private lender.


What does the order mean for the bank's customers? Here we take a look at the likely implications.

What the order says
The RBI asked the bank to "stop all launches of the Digital Business generating activities planned under its program - Digital 2.0 (to be launched) and other proposed business generating IT applications and (sourcing of new credit card customers."

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These restrictions will be lifted once the bank complies with the central bank's requirements, HDFC Bank said.

Impact on customers
The current supervisory action will not materially impact the bank's operations, HDFC Bank said in a note.

There will be no affect of the RBI order on existing operations including all existing credit card and digital banking.

The bank has 15,292 ATMs across 2,848 towns/cities. The number of cards issued by the bank includes 14.9 million credit cards and 33.8 million debit cards.
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Why are these outages occurring
A power failure at the primary data centre of the bank is to blame for the outage, reports said.

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Following one earlier instance, the RBI wanted to know the details behind these outages that renders key banking services such as ATM operations, cards and UPI transactions inoperable for a period.

Details of earlier outages
The last outage happened on November 21, after which RBI sought explanations from the bank.

Prior to that, there had been a huge outage in December last year which had led to a social media storm. In that instance, millions of HDFC Bank's customers were unable to access their mobile banking/net banking accounts for more than two whole days.

Increased payday transactional activities were to blame for that outage, the bank had clarified.
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