Liquidity Woes
India’s banking sector is grappling with a significant liquidity crunch, one that threatens not only financial stability but also the broader economy.
The Reserve Bank of India has asked HDFC Bank to temporarily stop all launches of its upcoming digital business-generating activities and sourcing of new credit card customers, the private lender announced on Thursday. This comes after outage was reported at its data centre which impacted bank’s operations last month.
In a regulatory filing, the private bank said, “RBI has issued an order dated December 2, 2020, to HDFC Bank Ltd with regard to certain incidents of outages in the internet banking/ mobile banking/ payment utilities of the bank over the past two years, including the recent outages in the bank’s internet banking and payment system on November 21, 2020, due to a power failure in the primary data centre.”
Advertisement
HDFC Bank said the RBI order “has advised the bank to temporarily stop all launches of the digital business-generating activities planned under its program Digital 2.0 and other proposed business generating IT applications and sourcing of new credit card customers”.
Advertisement
In addition, the order has directed the bank board to examine the lapses and fixes accountability, HDFC Bank added.
The lender said the above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.
The bank said it has always endeavored to provide seamless digital banking services to its customers. It has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations.
“The Bank believes that these measures will not materially impact its overall business,” it said.
Advertisement
