Monday, 18 October 2021

HDFC bank allowed by RBI to issue a new credit card

HDFC bank allowed by RBI to issue a new credit card

Last year December, the RBI acted against repeated technological outages at HDFC Bank over two years by slapping unprecedented penalties, including a ban on any new credit card issuance and launching new digital initiatives.

On Tuesday, RBI allowed HDFC Bank to issue new credit cards after imposing a ban of eight months due to technical problems.

However, RBI stated that the temporary ban on a lender for introducing a new digital initiative continues, the report added.

As per reports, RBI has asked the lender to submit a board-approved letter indicating continued compliance with the IT reports.

The head of a bank of consumer finance, digital banking, and information technology, Parag Rao, said that it had used the last six months to "introspect, re-engineer and innovate" about the cards business, with 15.5 million customers.

He said

The bank lost the market share by fewer percentage points because of the ban imposed, but the actions were taking have to ensure that it could continue to hold on in the share market by spending,

Moreover, while addressing shareholders at his first annual general meeting as the managing director and chief executive of the largest private sector lender,

Shashidhar Jagdishan also clarified that HDFC Bank has complied with 85 percent of RBI's asks on technology.

HDFC bank allowed by RBI to issue new credit card 1getty image

Read More: Mastercard: India stops issuing new cards

He said a technology audit is also over, and RBI will be independently taking a view on when to lift the actions taken against the bank.

"We have given milestones to the regulator in terms of what are the things we are doing on technology, complying with directives and advisories. We have covered a significant portion as we speak.

He said.

Eighty-five percent of what we had to do has been covering," Jagdsihan, who has been with the lender for over twenty years and worked as ''change agent'' in years leading to his elevation,

HDFC Bank is not the only one to suffer RBI's harsh penalties over months. The central bank had also ordered Mastercard and American Express to not sell any new cards for data localization non-compliance earlier.

In this month's monetary policy review, RBI governor Shaktikanta Das stressed that a keenness to ensure regulatory guidelines had led the RBI to initiate decisive actions against entities like HDFC Bank, Mastercard, and American Express.

"Whenever there were deviations or violations of the regulatory guidelines, it is our job as the regulator. It is our responsibility to ensuring observation.

"All our actions are outcome of our keenness and our responsibility to ensure that regulatory guidelines have complied," Das told reporters in the customary post-policy review press conference

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