HDFC Bank dips 2% as RBI asks to halt digital launches, new credit cards

Topics Markets | Buzzing stocks | HDFC Bank

The stock had hit its 52-week high of Rs 1,464 on November 25.
Shares of HDFC Bank ended over 2 per cent lower at Rs 1,377 on the BSE on Thursday after the Reserve Bank of India (RBI) ordered the bank to halt digital launches and new credit cards. 

The move comes after the bank customers faced a number of incidents of outages in the internet banking/ mobile banking/ payment utilities of the bank over the past 2 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  RBI  vide  said  Order  has  advised  the  Bank  to  temporarily  stop  i)  all  launches  of  the  Digital  Business  generating activities planned under its program ‐ Digital 2.0 (to be launched) and other proposed business generating  IT  applications  and  (ii)  sourcing  of  new  credit  card  customers.  In  addition,  the  Order  states  that  the  Bank’s  Board  examines the lapses and fixes accountability," the bank said in an exchange filing. READ THE FILING HERE

HDFC Bank said that it has, over the last two years, "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".

Meanwhile, the market capitalisation of HDFC Bank went past Rs 8 trillion on November 25, making it the first domestic lender to achieve the feat. The private lender’s market valuation rose to Rs 8,05,742 crore on BSE before ending below the mark at Rs 7.72 trillion. HDFC Bank, which is at number three position in overall market-cap ranking of listed companies, has become the first lender to achieve the milestone. The stock had hit its 52-week high of Rs 1,464 on November 25. 

Analysts at CLSA were positive on the bank’s digital push in the wake of Covid-19 pandemic. The lender’s latest digital ecosystem platforms, currently being developed for pharma and autos, CLSA said, will house various stakeholders in the respective value chain and will provide them value added services.

"Through this, the bank will benefit from insight into cash flows which will eventually lead to higher loan/deposits accretion," the brokerage said in a recent note. READ ABOUT IT HERE

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