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Friday, September 24, 2021

RBI allows HDFC Bank to issue new credit cards

On December 2, the RBI directed the bank to temporarily stop all launches of the digital business generating activities planned under its programme Digital 2.0 (to be launched) and other proposed business generating IT applications, and sourcing of new credit card customers.

Written by ENS Economic Bureau | Mumbai |
Updated: August 18, 2021 12:14:44 pm
The RBI ban came after certain incidents of outages in the internet banking, mobile banking and payment utilities of the lender over the past two years. The bank had 1.48 crore credit card customers as of June.

After eight months of “restrictions”, the Reserve Bank of India (RBI) has allowed HDFC Bank to start issuing new credit cards. However, the RBI restrictions on the bank’s new offerings under its Digital 2.0 strategy will remain.

On December 2, the RBI directed the bank to temporarily stop all launches of the digital business generating activities planned under its programme Digital 2.0 (to be launched) and other proposed business generating IT applications, and sourcing of new credit card customers.

The RBI ban came after certain incidents of outages in the internet banking, mobile banking and payment utilities of the lender over the past two years. The bank had 1.48 crore credit card customers as of June.

In a communication to HDFC Bank on Tuesday, the RBI said, “The said restrictions are hereby lifted to permit the bank to undertake the sourcing of new credit cards. The restrictions on all new launches of the digital business generating activities planned under the Digital 2.0 programme of the bank will continue till further review.” On July 17, the bank’s CEO and MD Sashidhar Jagdishan said it has complied with 85 per cent of the RBI’s requirements on the improvements desired, and the ball is now in the regulator’s court to re-allow the bank.

The action against HDFC Bank has been followed with a ban on Mastercard and American Express from selling any new cards because of a failure to adhere to data localisation rules.

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