HDFC Bank outage | Working on war footing to strengthen IT infrastructure, will comply with RBI requirements: CEO Sashidhar Jagdishan

HDFC Bank CEO Sashidhar Jagdishan (Image: HDFC Bank website)

After the Reserve Bank of India (RBI) temporarily stopped launch of all new digital products of HDFC Bank, its new CEO Sashidhar Jagdishan on December 3 said the bank will comply with the RBI regulations and will wait for the regulator’s clearance before launching new products.

“We had two outages, one in November 2018 and second in December 2019. We have taken help of external expertise, understood what needs to be done further and have substantially implemented the inputs to strengthen our IT infrastructure and systems,” Jagdishan said in a letter to customers.

“Unexpectedly another incident happened on November 21,2020, and the primary reason for the same is the power outage in our primary data centre. We are working on war footing to strengthen this area also now,” Jagdishan said.

Jagdishan assured customers that there is no reason to worry. “You can continue to transact with the bank without any concern,” he said.

Jagdishan apologised for the digital outage to customers. “We realize that as our valued customer, you expect us to maintain a very high standard of service quality and experience. And sometimes, we have not been able to live up to your expectations. For that, please accept our sincere apologies,” the CEO said in the letter.

The RBI asked HDFC Bank to temporarily halt sourcing new credit cards and stop the launch of its digital business-generating activities planned under Digital 2.0 and other proposed business generating IT applications.

The RBI issued the order dated December 2, 2020, to HDFC Bank.

The central bank on November 23 had sought an explanation from HDFC Bank after its digital services faced disruptions on the evening of November 21 till November 22 morning - for over 12 hours.

The order also states that HDFC Bank’s board must examine the lapses and fix accountability.

“The above measures shall be considered for lifting (the restrictions) upon satisfactory compliance with the major critical observations as identified by the RBI,” it added.

Jagdishan said the bank will now launch its digital initiatives after getting the RBI’s approvals.

“Some of our strategic digital initiatives to improve the front-end digital experience, improve digital origination, straight through processing, next generation of mobile and internet banking, API-based banking on the edge etc would now be readied and launched post the approval and clearance from the regulator,” the CEO said in the letter.

Further, the bank will work with experts and the regulator to fortify the identified areas for improvement. “Internally, we are looking at this as an opportunity to further improve ourselves and emerge stronger,” Jagdishan said.

Banks are under immense pressure because of the competition to come up with new digital banking products, often without proper testing and leading to such failures, said senior bankers. “There is intense competition from industry and new players such as payments banks to keep introducing new products. In their anxiety to remain at the top, banks often come with digital banking products that are not fully tested. Banks need to be careful to make sure they have enough technology capabilities to back such products,” said Naresh Malhotra, a senior banking consultant.

To be fair, technical glitches aren’t limited to HDFC Bank alone. Other banks too have been facing problems on the technical side, with the latest instance reported on State Bank of India’s (SBI's) mobile banking application, YONO, in the last two days with customers complaining on Twitter that they are unable to login to the application following an error. This issue has not been resolved yet.

In October, some of the customers of another leading private lender, ICICI Bank too took to social media complaining of issues with the bank’s online payment systems and mobile app.