scorecardresearch
HDFC Bank needs to strengthen IT systems before expanding further: RBI chief Das

HDFC Bank needs to strengthen IT systems before expanding further: RBI chief Das

The RBI Governor made this comment after the central bank on Thursday asked HDFC Bank to temporarily stop all launches of its upcoming digital business-generating activities and sourcing of new credit card customers after recent service outages

RBI Governor Shaktikanta Das urged banks to invest more on the technology front RBI Governor Shaktikanta Das urged banks to invest more on the technology front

A day after the central bank imposed temporary restrictions on HDFC Bank's new digital initiatives, RBI Governor Shaktikanta Das on Friday said that the private sector lender needs to strengthen its IT systems before expanding further. Das said that the need to maintain people's confidence in digital banking prompted action against HDFC Bank for service outages. He urged banks to invest more on the technology front.

"In the case of HDFC Bank, there were earlier episodes also. HDFC Bank has an overwhelming presence in the digital payment segment, in the internet banking segment. We have some concerns about certain deficiencies etc... it is necessary that the HDFC Bank strengthens its IT systems before expanding further," Das told reporters in a press briefing after the monetary policy announcement on Friday.

"we cannot have thousands and lakhs of customers who are using digital banking to be in any kind of difficulty for hours together and especially when we are ourselves giving so much emphasis on digital banking. Public confidence on digital banking has to be maintained," the RBI chief said.  

On incident of outage at State Bank of India (SBI) on Thursday, Das said that the RBI is studying the matter.  

Also Read: HDFC Bank 'on war footing' to curb outages after RBI bans digital launches

The RBI Governor made this comment after the central bank on Thursday asked HDFC Bank to temporarily stop all launches of its upcoming digital business-generating activities and sourcing of new credit card customers after outage at its data centre which impacted operations last month. The RBI's decision to issue a halt notice was taken based on the recent incidents of outages in the internet banking, mobile banking and payment services over a two-year period.

The private bank had two outages, one in November 2018 and second one in December 2019. The most recent outage took place last month due to a power failure in the primary data centre.

Also Read: RBI to lay out digital payment security control directions: Shaktikanta Das

Meanwhile, HDFC Bank new CEO Sashi Jagdishan on Thursday said that the second largest bank in the country is working on war footing to strengthen its systems. In a message to customers, Jagdishan said the bank realises that "as our valued customer, you expect us to maintain a very high standard of service quality and experience".

By Chitranjan Kumar with PTI inputs