A customer walks outside an HDFC Bank branch in Mumbai July 17, 2013. India's HDFC Bank Ltd posted on Wednesday a 30 percent rise in first-quarter net profits, in line with expectations, boosted by higher fee income and credit growth. REUTERS/Danish Siddiqui (INDIA - Tags: BUSINESS) - RTX11P4B
HDFC Bank's chief executive officer Sashidhar Jagdishan on July 17 said the ban imposed by Reserve Bank of India (RBI) in last December on the new digital launches has impacted the business. The bank is prepared to bounce back once the ban is lifted, Jagdishan said.
The RBI-appointed third party audit on bank's IT audit is complete and HDFC Bank is awaiting the final decision from the regulator on withdrawal of the ban, Jagdishan said at the bank's Annual General Meeting (AGM) on Saturday.
In December last year, the RBI asked HDFC Bank to put all new digital launches on hold till the bank resolve the tech issues.
Jagdishan said there was a valid reason why the RBI imposed the ban on HDFC Bank's time for recovery from tech outages were not meeting global standards. Jagdishan said the bank has resolved most of the issues in its technology platform.
The bank is prepared to launch new products once the ban is lifted, Jagdishan said. It will however take 12-15 months to complete the technology transformation, he added.
The bank has prepared a roadmap for technology transformation under the Digital 2.0 plan.
The bank has a number of digital launches planned across various business verticals under the initiative including the launch of an auto portal, which the bank calls a one-stop shop for all vehicle loans. The bank describes Digital 2.0 as “the next phase of our digitisation journey.”
Other initiatives include My Account My Choice where current account, savings account (CASA) customers can choose any account number of their choice when they sign on as an HDFC client. It will offer card-less cash withdrawals, WhatsApp Banking and smart slips that enable customers to fill in cash deposit, withdrawal and cheque deposit slips through NetBanking, using a reference ID, and complete the transaction at a banking outlet. Some of these services have already been launched.
HDFC Bank is one of the biggest card issuers in the country with 15 million credit cards and 33.8 million debit cards as of December-end.
Earlier, HDFC Bank Chairman Atanu Chakraborty said the bank has created a new business segment of commercial (MSME) and rural banking to capture the next wave of growth. "This will not only reinforce the Bank’s top position in the MSME segment but also strengthen efforts to serve customers in both India and Bharat and even consumer segments like the tech savvy and Millennial, going forward," Chakraborty said. The creation of this vertical is under the 'future ready' project of the bank.
The delivery channels will be complemented with digital marketing, even as the bank leverages the branch channel and virtual relationship channel, the Chairman said.
HDFC Bank, on July 17, reported a 16.1 percent year-on-year growth in standalone profit at Rs 7,729.64 crore for the quarter ended June 2021 despite elevated provisions. Higher other income and pre-provision operating profit along with NII supported profitability. The bank reported a profit of Rs 6,658.62 crore in Q1 FY21.
Net interest income, the difference between interest earned and interest expended, grew by 8.6 percent to Rs 17,009 crore compared to the year-ago quarter, with loan growth of 14.4 percent and a core net interest margin of 4.1 percent. Deposits, at Rs 13.45 lakh crore grew, by 13.2 percent on a year- on-year basis.