The Reserve Bank of India (RBI) has given a big relief to the country’s largest private-sector HDFC Bank. Now it has got approval to issue new credit cards. In December, the Reserve Bank had banned the issuance of new credit cards. Its effect was also visible on the bank’s stock today. The stock is trading up 1.16% at Rs 1,533
In December 2020, HDFC Bank had issued 1.54 crore credit cards. However, in January 2021, its number came down to 1.48 crore. SBI has issued a total of 1.2 crore credit cards. ICICI Bank has issued 90 lakh credit cards.
Bad effect on business
HDFC Bank’s credit card business was hit hard due to the ban. However, ICICI Bank and SBI got the direct benefit of this. RBI took this action due to repeated technical problems in HDFC Bank. Along with this, it was also banned from taking any new digital initiative. This ban is still in place. Recently, Parag Rao, Digital Head of the bank said that we have used 6 months to improve the card business. We have over 15 crore credit card customers.
Audit order in February
In February this year, the Reserve Bank had appointed a firm to audit its IT department in the same matter. In January, HDFC Bank submitted its plan to the RBI to deal with the recurring bottleneck. The bank had said that it would completely revamp its IT infrastructure in three months. In this case, a fine of Rs 10 lakh has also been imposed on the bank.
The error was found on 21 November
On November 21, a glitch was found in the bank’s internet banking and payment system. The fault was caused by a power failure in the primary data center. In December, the RBI had said that all new digital programs would have to be stopped by the bank. However, this was the third major setback for the bank in two years.
Big preparation for HDFC Bank
HDFC Bank is preparing to launch its Digital 2.0, in which a lot of digital channels will be launched. In such a situation, the order of RBI is a big setback for the bank. Along with this, all other business-generating IT applications were also ordered to be stopped. It also prohibited sourcing new credit card customers.
There have been many such glitches in the bank’s IT system in the last two years and it is happening continuously. After this RBI took this step. HDFC Bank had said that it has been taking all steps in this matter for two consecutive years and is working according to the rules of the regulator.
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