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The Reserve Bank of India (RBI) has asked private lender 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 November outage was the third in a span of two years.

The RBI order has asked the board of the bank to look into why these outages are occurring and find out who is accountable.

What does the RBI order say?

HDFC Bank said in a regulatory filing that the RBI issued the order on December 2, 2020 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."

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".

In addition, the order has directed the bank board to examine the lapses and fixes accountability, HDFC Bank added.

HDFC Bank, India's largest private banking service provider, 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, according to an ET report.

What is HDFC's response?

The lender said the above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.

HDFC Bank said "over the last two years, it has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the regulator in this regard.

"The bank 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 added.

How does it affect customers?

The RBI order temporarily suspending the launch of Digital 2.0 and issuance of credit cards does not affecr existing customers. The order will have no effect on existing operations, including all existing credit card and digital banking.

HDFC Bank shares fall 1 pc

Shares of HDFC Bank dipped over 1 per cent in early trade on Thursday after the company's regulatory filing. Erasing all its early gains, the stock dipped 1.63% or Rs 22.95 to Rs 1,384.00 on the BSE. At the NSE, it declined 1.62% or Rs 22.8 to Rs 1,384.15.

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