HDFC Bank has submitted a detailed plan of action to the Reserve Bank of India (RBI) to address repeated service disruption issues due to outage and hopes to improve its technology platform in three months. Progress is being made on the plan of action provided to the central bank and the private lender has taken this positively as it will raise the standard, according to a senior official of HDFC Bank.
The action plan will take 10-12 weeks for implementation, and further timeframe will depend on the RBI's inspection. Based on the satisfaction level, the regulator will lift the ban, the official said at an analysts meet, as per a PTI report.
Last month, RBI temporarily barred HDFC Bank from launching new digital banking initiatives and issuing new credit cards after taking a serious view of service outages at the lender over the last two years.
The bank has been penalised for two major outages, one in November 2018 and the other in December 2019.
Taking a stern view of the repeated outages, RBI Governor Shaktikanta had said the regulator had some concerns about certain deficiencies and it was necessary that the HDFC Bank strengthens its IT systems before expanding further.
"... we cannot have thousands and lakhs of customers who are using digital banking to be in any kind of difficulty for hours together and especially when we are ourselves giving so much emphasis on digital banking. Public confidence in digital banking has to be maintained," Das had said in December.
HDFC Bank, the largest private sector lender, has been classified as a systemically important entity by the RBI in the past. It is also the largest issuer of credit cards and has a significant share in the payment processing segment.
Earlier, HDFC Bank's Managing Director and Chief Executive Officer Shashidhar Jagdishan had apologised to customers and promised to work on the deficiencies.