HDFC Bank has lost over $2 billion in market value after the RBI crackdown on the lender’s digital business
- The HDFC Bank lost over $2 billion in market value after the Reserve Bank of India (RBI) asked it to stop all launches of its upcoming digital business-generating activities temporarily.
- The share price of private-sector lenders cracked nearly 2% during the afternoon session after trading in the green for almost two hours.
- Check out the latest news and updates on Business Insider.
The share price of private-sector lenders cracked over 2% during the afternoon session after trading in the green for almost two hours. The crack in its shares also brought the Indian benchmark index down from 300 points higher to 30 points higher.
The RBI decision came after the recent outage at its data centre, which impacted operations last month. It is noteworthy that among all the lenders, HDFC is the largest credit card seller in the country.
“RBI has issued an order dated December 2, to HDFC Bank Ltd with regard to certain incidents of outages in the internet banking/ mobile banking/ payment utilities of the bank over the past two years, including the recent outages in the bank’s internet banking and payment system on November 21, 2020, due to a power failure in the primary data centre,” the bank said in a regulatory filing.
According to the bank the RBI order “has advised the bank to temporarily stop all launches of the digital business-generating activities planned under its program Digital 2.0 and other proposed business generating IT applications and sourcing of new credit card customers”.
In addition, the order has directed the bank board to examine the lapses and fixes accountability. The lender said the above measures should be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.
HDFC Bank said “over the last two years, it has taken several measures to fortify its IT systems and will continue to work swiftly to close out the balance and would continue to engage with the regulator in this regard.
“The bank has been taking conscious, concrete steps to remedy the recent outages on its digital banking channels and assures its customers that it expects the current supervisory actions will have no impact on its existing credit cards, digital banking channels and existing operations. The bank believes that these measures will not materially impact its overall business,” it added.
SEE ALSO: Sensex, Nifty hit record high — these are the top movers in trade today
India may reportedly block Wikipedia if the site doesn't delete the map showing Aksai Chin as a part of China
- Do not panic when Finance Minister Nirmala Sitharaman reads out the revised estimates
- India records 14,545 new COVID-19 cases in last 24 hours
- Google says it will pull Search out of Australia if the government doesn't back down on the media bargaining code
- Recession in India will end latest by March, says a top economist
- Amazfit GTS 2 review – feature-rich, but there’s still room for improvement