RBI lifts all restrictions on HDFC Bank permits new digital launches


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Highlights

  • RBI lifts ban on HDFC Bank, allowing it to launch new digital ventures
  • In December 2020, the RBI barred HDFC Bank from issuing new cards
  • Rival ICICI Bank and SBI Cards use the opportunity to bridge the gap with HDFC Bank

The RBI lifted all sanctions on HDFC Bank, allowing it to launch new digital ventures, private sector lenders said on Saturday.

“We would like to inform everyone that the Reserve Bank of India (RBI) in its letter dated March 11, 2022 has lifted the ban on commercial production activities planned under the bank’s Digital 2.0 program,” HDFC Bank said in a statement. Statement

The bank’s Digital 2.0 program is designed to deliver products to its customers for a non-abrasive financial experience. It will help customers move from a single transaction to a complete financial solution such as loan disbursement, repayment and investment.

In December 2020, the RBI barred HDFC Bank from issuing new cards and launching new digital ventures following repeated instances of lender technical glitches, leading the market in the credit card segment.

The RBI’s move comes after the bank’s customers experienced a number of setbacks in internet banking, mobile banking, and payment utilities in the last two years.

Rival ICICI Bank and SBI Cards have used the opportunity to bridge the gap with HDFC Bank.

The new card issue was banned after MasterCard and American Express failed to comply with data localization rules after taking action against HDFC Bank.

Following HDFC Bank’s remedial action, the regulator partially lifted the ban on the card issue in August last year. However, restrictions on the introduction of new technology initiatives continued.

In addition to lifting both sanctions, the bank said in a statement that it was fully committed to ensuring continued adherence to the highest standards of compliance with RBI recommendations.

“We have used this time to draw short, medium and long term plans to meet the evolving digital needs of our customers and we will launch these initiatives in the coming days,” it added.

Also read | The RBI has stopped Paytm Payments Bank from onboarding new customers, ordering an IT audit.

Also read | EPFO has reduced interest rates on EPF deposits from 8.5% to 8.1% for 2021-22.

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