HDFC bank free to allow credit cards, RBI lifts ban
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Mumbai: After a ban of eight months, RBI has allowed HDFC bank to issue credit cards. The ban on launching new technology is still in place.
HDFC bank informed stock exchanges on Tuesday that it has received a letter from the RBI that the restrictions have been relaxed. "The restrictions on all new launches of the Digital Business generating activities planned under Digital 2.0 will continue till further review by RBI. We will continue to engage with RBI and ensure compliance on all parameters," read the statement by HDFC.
Chief Executive and Managing Director of HDFC Bank, SashidharJagdishan said on July 17 that they have complied with 85% of the RBI's requirements on the improvements.
Jagdishan had said that the bank has completed its technology audit as well. Now, the RBI will independently take a view on it. "We have given a milestone to the regulator in terms of what are the things we are doing on technology, complying with their advisories and directives," said the MD.
HDFC, the largest private sector lender, was banned from selling new credit cards in December 2020. Repeated instances of technological outages at the lender prompted the RBI intervention. HDFC is the market leader in the credit cards segment.
HDFC's existing users (1.48 crore credit card customers) were not impacted by the ban. But, rivals ICICI Bank and SBI Cards have seized the opportunity to catch up with the leading bank.
Jagdsihan said that the tech outages are a global phenomenon but it is the time taken to recover from the setback that leads to the "rap on the knuckles" from the RBI. He also acknowledged that the bank has lost market share in the credit card segment due to the ban.