Not A One-Off
HDFC Bank has now faced more than one technical outage over the last few months.
In November, the private bank said its services had faced technical issues because of a power outage at one of its data centres in Mumbai. This despite the fact that banks are required to have business continuity processes in place to deal with any such events.
Prior to that, in December 2019, HDFC Bank’s customers had faced disruption for two consecutive days, when they were unable to transfer cash or make any digital payments. The bank cited “technical glitches” as the reason.
A year before that, the bank had rolled out its new net-banking application, which quickly led to glitches for users and forced the bank to rollback the launch.
These technical troubles, at one of India’s most digitally active banks, have now drawn the attention of the regulator.
According to monthly data available with the RBI, HDFC Bank is the highest issuer of credit cards in the country, with 1.5 crore cards in force as on Sept. 30. About 91.5% of the total transactions it recorded came from digital channels, according to the bank’s annual report for the year ended March 31, 2020.
The annual report also noted that the bank had created a digital transaction monitoring committee to promote such services. The committee, headed by board member Srikanth Nadhamuni, is also in charge of reviewing customer services on the digital banking framework for the lender. Last month, the bank also announced that it had appointed Ramesh Lakshminarayanan as chief information officer, nearly four months after predecessor Munish Mittal left to pursue higher education.
Strong Message With Implications
While the bank has assured that the RBI’s strictures will not impact existing business, there could be implications for planned launches.
The measures will delay the launch of HDFC Bank’s auto loan portal they were looking to launch this year, said Gautam Chhugani, director- financial and fintech, Bernstein Research.