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    RBI Governor says HDFC Bank needs to strengthen its IT systems before expanding further

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    RBI Governor says HDFC Bank needs to strengthen its IT systems before expanding further

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    HDFC Bank needs to strengthen its IT systems before expanding further and hence the Reserve Bank of India (RBI) imposed temporary restrictions on HDFC Bank’s new digital banking launches, said RBI Governor Shaktikanta Das.

    HDFC Bank needs to strengthen its IT systems before expanding further and hence the Reserve Bank of India (RBI) imposed temporary restrictions on HDFC Bank’s new digital banking launches, said RBI Governor Shaktikanta Das.
    Addressing the press briefing after the monetary policy announcement on Friday, Das said that the regulator saw deficiencies in HDFC Bank's digital services and felt that HDFC Bank is required to strengthen its IT systems before expanding further.
    The comment comes after the RBI, on Thursday, imposed temporary restrictions on HDFC Bank’s new digital banking launches and proposed business generating IT applications until it resolves the outage issues.
    The country’s largest private lender, HDFC Bank was hauled up by the regulator for a series of technical glitches it has experienced in the past two years. RBI has also temporarily barred HDFC Bank from onboarding any new credit card customers.
    "The RBI's decisions to impose a monetary penalty or take a supervisory action depend upon case to case," Das said.
    "In the case of HDFC Bank, there were earlier episodes also. HDFC Bank has an overwhelming presence in the digital payment and internet banking segment. We have some concerns about certain deficiencies in the bank's digital services. Therefore, we felt that it is required that HDFC Bank strengthens its IT systems before expanding further. Therefore, these business restrictions have been imposed on them," Governor Das said.
    Das was sure that HDFC Bank will comply with RBI's suggestions.
    "The public confidence in digital banking has to be maintained especially when we are placing so much emphasis on it," Das said.
    RBI projects FY21 real GDP contraction at 7.5%
    With regards to SBI's YONO issues, Das said that it was too early to comment and RBI's teams were studying it.
    Governor also emphasized the need for the banks and financial institutions to invest more in technology and IT systems.
    "If you want to remain competitive in the coming years, technology is the key, the robustness of your IT system is the key," Das said.
    He advised banks, NBFCs and other financial institutions to invest more in technology to strengthen all their IT system so that public confidence is maintained.
    He believes that the entire financial landscape will become more IT-dependent in the future.
    The RBI is constantly engaged with the management of various banks and NBFCs where it sees deficiencies in their procedures and systems. The RBI will continue to work with banks internally and advise them to improve the systems, he added.
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