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HDFC Bank share price falls after RBI halts new credit card customers, digital 2.0 programme

The stock opened in the green and rose almost 2 percent before witnessing a sudden selling after the bank in a BSE filing reported the RBI's order.

December 03, 2020 / 04:05 PM IST

Shares of HDFC Bank witnessed a sudden fall of over 2 percent after the Reserve Bank of India (RBI) asked the private lender to stop sourcing new credit card customers and halt the launch of business activities planned under the Digital 2.0 programme, taking note of recent outages in internet banking.

The stock closed 2.13 percent lower at Rs 1,377.05 on BSE on December 3.

The stock opened in the green and rose almost 2 percent before witnessing a sudden selling after it the bank in a BSE filing reported about RBI's order.

The central bank on December 2, 2020, advised the bank to firstly, temporarily stop all launches of its digital business generating activities planned under Digital 2.0 and other proposed business generating IT applications, and secondly halt sourcing of new credit card customers.

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

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The order also said the bank’s board must examine the lapses and fix accountability.

The bank in its filing to the exchanges said it had taken “several measures to fortify its IT systems” over the last two years and will continue to work to “swiftly to close out the balance and would continue to engage with the Regulator in this regard.”

It also sought to reassure customers, saying, “(HDFC Bank) expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations and believes that these measures will not materially impact its overall business.”

“The bank has always endeavoured to provide seamless digital banking services to its customers and has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels,” it added.

The central bank’s action comes after it had on November 23 sought an explanation from HDFC Bank after its digital services were disrupted from the evening of November 21 to the morning of November 22 for more than 12 hours.
Moneycontrol News
first published: Dec 3, 2020 11:17 am
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