The Reserve Bank of India (RBI) on August 17 partially lifted its technology ban on HDFC Bank effective today.
The RBI has allowed HDFC Bank to source new credit cards as per a letter sent to the bank on August 17, CNBC-TV18 reported.
In December last year, the RBI had asked HDFC Bank to put all new digital launches on hold till the bank resolve the tech issues. HDFC was barred from launching any new digital products or services and issuing new credit cards as a penalty for repeated instances of outages in its online platforms.
HDFC Bank's chief executive officer Sashidhar Jagdishan had said a month ago on July 17 that the RBI ban on new digital launches over tech issues has impacted the business. He had further said that HDFC is ready to bounce back and launch new products once the ban is lifted, but it will take around 12 to 15 months to complete the technology transformation.
Laying the blame of the outages on capacity issues, he had said: “We realised as a company, we have been victims of our own success. What one would have envisaged is that from a base level you normally size up for four-five times the capacity. We realise the volumes have gone even beyond the five times capacity that we had originally sized up. So, it is more of a capacity issue.”
Starting December 2020, HDFC brought in better monitoring systems and a more resilient system of shifting to disaster recovery mode, Chief Information Officer Ramesh Lakshminarayanan had said earlier this year. After the embargo on digital launches came into force, HDFC took a set of actions, including bringing an external auditor for its systems. The audit went on between February and April. “The reports have been submitted to the regulator. We are awaiting further directions from the regulator in this matter,” Lakshminarayanan had said.
Pointing out the differences between outages that had occurred before the RBI embargo on new digital launches and those that took place after, he said: “We have had outages in December, in March, and one yesterday (June 16, 2021) …. We process record numbers of transaction volumes. Having said that, none of these issues has been on account of capacity. We’ve had issues like a hardware failure somewhere, sometimes some components may not have worked effectively.”