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HDFC Bank CEO Sashidhar Jagdishan writes to staff on tech issues, says working with regulator to overcome “the current situation”

HDFC Bank has suffered from multiple technology glitches in the recent past, inviting RBI’s attention.

April 22, 2021 / 02:41 PM IST
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HDFC Bank’s managing director and CEO, Sashidhar Jagdishan on April 19 wrote to employees to alleviate the concerns on recent multiple technology glitches and said the bank is working with regulator to overcome “the current situation."

“While we execute this Technology Transformation agenda, there will sometimes be pain and outages beyond our control. We must doubly resolve to reach out proactively to our customers / stakeholders and explain the path that we are traversing to make their experience with us smoother, faster and better,” Jagdishan said in the letter.

Moneycontrol has a copy of the letter.

"It is in this context, one has to see the advisories and strictures by the regulators calling for accelerated adoption and process changes. We are working with them closely to overcome the current situation,” Jagdishan said.

In the last 28 months, HDFC Bank has had five instances of downtime. “Every instance has hardened our resolve to do better keeping our customers in mind. The country has embarked on a tremendous digitisation drive across all sectors of the economy. And we shall rise to the occasion as we usually do by implementing cutting edge technology solutions across all lines of our businesses,” Jagdishan said.


On December 3, HDFC Bank announced that the RBI had asked the lender to temporarily stop all launches under its Digital 2.0 initiative and stop sourcing new credit card customers. The announcement came after the bank experienced multiple outage in its internet banking, mobile banking and payment utility services over the past two years.

In his letter, Jagdishan listed five instances where bank’s technology platforms failed and explained the reasons behind each incident.

Digital outages and reasons

November 2018: Crash of the New Mobile Banking App

Reason: “We faced an unprecedented demand to download the new mobile app. We have learnt and since refined our processes of managing the mobile banking app and has never faced any such challenges later. After the Nov 2018 initial launch, we have upgraded our mobile app seven times over the last two years and in all these instances it has been a smooth affair with no downtime or customer inconvenience whatsoever,” Jagishan said.

December 2019: Outage with Mobile Banking App

Reason: All banking systems are complicated and interconnected and each component has to work efficiently for us to deliver our promise to our customers. In this instance, one of the vendors system upgrade patch issue was faulty and the same has been addressed adequately. We have and will continue to reinforce vendor patch application.

November 2020: Outage at Data centre

Reason: A third party human error lead to the downtime. To remove this risk completely, we have taken several actions to mitigate such instances in future.

March 1, 2021: Net Banking/Mobile Banking downtime

Reason: The issue here occurred on account of a faulty signature on our HIPS (Host Intrusion prevention software). This was an issue acknowledged by the manufacturer which impacted several global clients as well. The faulty signature resulted in slowing down response on Net banking and mobile banking. This has, since, been rectified.

March 31, 2021: Net Banking/Mobile Banking downtime

Reason: The issue occurred on account of a hardware component failure in one of our database servers resulting in a slow response to some of our customers. A large number of our customers were able to carry out their NB/MB activities in this period and we saw only a marginal dip in the number of transactions that day.

Digital transformation initiatives

HDFC Bank has embarked on several digital transformation initiatives, Jagdishan said.

“We have invested heavily in the scale up of our infrastructure to handle any potential load that we will encounter for the next 3/5 years. We are also in the process of accelerating our cloud strategy to be on the cutting edge leveraging best in class cloud service providers,” the CEO letter says.

Further, the bank has strengthened its process of monitoring our Data Centre (DC) and have shifted key applications to new DC, the letter said.

Thirdly, the bank has strengthened the firewalls further, Jagdishan said. “We have to be scanning the horizon for potential security issues and be ever prepared to face them. We haven’t had any security issues in the past. But this is always an important area of focus and action plans are underway for further robustness,” the CEO said.

Besides, “HDFC Bank has also enhanced application monitoring mechanism across-the-board to enable us to keep our IT systems always on,” Jagdishan said.

Performance outlook

Jagdishan said this year, too, the bank will follow its normal practice in so far as compensation cycle is concerned. “In the current financial year, there will be some pandemic related challenges for sure. The beauty of this organisation is the ability to rally around, tap the opportunities and grow. The story of the bank will not be any different in this financial year and in the coming times,” Jagdishan said.

Jagdisan added that broad macro opportunities continue to present themselves across the retail, MSME and Corporate Banking. “We will continue to invest our resources to grow in the identified segments / sectors and geographies,” Jagdishan said.

HDFC Bank reported an 18.2 percent year-on-year (YoY) growth in its standalone profit at Rs 8,186.5 crore for the quarter ended March 2021 (Q4FY21) on account of low base in the corresponding period. The profit in Q4FY20 stood at Rs 6,927.69 crore.

Higher other income and pre-provision operating profit aided profitability during the quarter, but provisions and tax expenses restricted net income growth.

Net interest income (NII), the difference between interest earned and interest expended, grew 12.6 percent to Rs 17,120.15 crore in Q4FY21, compared to Rs 15,204.06 crore in the year-ago period, driven by credit growth of 14 percent, and core net interest margin of 4.2 percent for the quarter.
Dinesh Unnikrishnan
first published: Apr 19, 2021 04:30 pm

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