Shares of HDFC Bank dipped 1.3 per cent to Rs 1,388.20 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.
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”.
However, the stock recovered some of its losses as was trading 0.2 per cent lower at Rs 1,404 at 11:17 AM. In comparison, the S&P BSE Sensex was trading 0.3 per cent higher. Around 89 lakh HDFC Bank shares have already changed hands on the NSE and BSE combined, so far. The stock had hit its 52-week high of Rs 1,464 on November 25, 2020.
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 inoverall market-cap ranking of listed companies, has become the first lender to achieve the milestone.
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
