Moody’s Investors Service said on Monday that HDFC Bank’s multiple outages in its internet banking, mobile banking and payment utility services over the past two years are credit negative.
The Reserve Bank of India (RBI) last week asked the bank to temporarily stop all launches under its Digital 2.0 initiative and stop sourcing new credit card customers.
Moody’s said the regulators’ action was in response to weaknesses in HDFC Bank’s digital infrastructure and operational resilience and is credit negative because the bank is increasingly relying on digital channels to source and service its customers.
“The recurring outages also risk hurting the bank’s brand perception among a growing and increasingly digitally savvy customer base, and increases the potential that clients switch to other banks, which would lead to a reduction in revenue and low-cost retail funding.”
Moody’s said it does not expect the regulators’ action to materially affect the…