HDFC Bank is working on resolving its digital banking issues over the next 10-12 weeks and has submitted a plan of action to the Reserve Bank of India (RBI), the bank’s management told analysts during an earnings call on Saturday.
In December, the RBI imposed business sanctions on HDFC Bank due to a number of incidents over the last two years which saw the banks’ internet banking, mobile banking, and payments channels go offline. The central bank told the bank to temporarily stop all launches of its digital business activities, under the banks’ Digital 2.0 initiative, which is yet to be launched, and other proposed business generating IT applications. It also advised the bank to temporarily stop sourcing new credit card customers.
Srinivasan Vaidyanathan, chief financial officer, HDFC Bank said that the bank has put in place several action plans from strengthening disaster recovery, recovery point, recovery time, automating the orchestration tools to get on to disaster recovery side or improving architectural efficiencies, cloud strategy. While some of these strategies are long term, like cloud computing which could take 12 to 18 months others are short term. “We want to mention that progress is being made on the plan of action provided to the regulator. We have taken it positively as it will raise the standard. The regulator will institute a process to (review the) action plan and the progress,” he said.
“The rest of the things we have envisaged in the action plans we are working out, could take anywhere to 10-12 weeks, from our side. But then from then on, the further time frame is not something that we manage, we will leave it to the regulator to manage in the form of further inspections. As I mentioned in my initial remarks, where they can inspect and institute the process… That is not something that we can manage or we can tell you” Vaidyanathan said.
HDFC Bank reported a net profit of ₹8,758.3 crore, for the October to December quarter of 2020, up by 18% from ₹7416.5 crore in the same period of the previous year. While the banks’ overall loan book grew by 15.6% year-on-year (YoY) to ₹10.82 lakh crore at the end of Q3FY21, its retail loan book witnessed tepid growth during the quarter — 5% compared to the same quarter last year.
- HDFC Bank sees tepid growth in retail lending in Q3
- RBI orders HDFC Bank to examine lapses within digital platforms
- Power issues over the weekend leave HDFC Bank customers in the dark
- HDFC Bank aims to grow merchant payments base to 20 million in 3 years