RBI appoints external firm to audit HDFC Bank’s IT infrastructure | Business Standard News

Clipped from: https://www.business-standard.com/article/finance/rbi-appoints-external-firm-to-audit-hdfc-bank-s-it-infrastructure-121020200619_1.html

In December last year, irked at the repeated service outages, the RBI asked the lender to temporarily halt all its digital launches as well as new sourcing of credit card customers

Private lender HDFC Bank, which was penalised by the Reserve Bank of India (RBI) for repeated service outages in the internet banking, mobile banking, and payment utilities space, informed the stock exchanges on Tuesday that the central bank has appointed an external professional IT firm for carrying out a special audit of the entire IT infrastructure of the bank.

In a notification to the exchanges, the bank said, “…RBI has appointed an external professional IT firm for carrying out a special audit of the entire IT infrastructure of the bank under section 30 (1‐B) of the banking regulation act, 1949 (“the Act”), at the cost of the bank under Section 30 (1‐C) of the act”.

“The bank shall accordingly extend its cooperation to the external professional IT firm so appointed by RBI for conducting the special IT audit”, it added.

In December last year, irked at the repeated service outages, the RBI asked the country’s largest private sector lender to temporarily halt all its digital launches as well as new sourcing of credit card customers.

Post this action by the central bank, the private lender’s management issued a statement to its customers apologising for sometimes not being able to live upto their expectations. But they assured the customers saying they had already taken help from external experts and understood what needs to be done further and have substantially implemented the inputs to strengthen our IT infrastructure and systems.

The bank then submitted an action plan last month to the central bank detailing the steps they are taking to address the issue at hand. The bank said it was hopeful of improving its technology platform in three months. The plan is supposed to get implemented in 10-12 weeks the management had said last month during an analysts meet and further time-frame will depend on the RBI’s inspection.

The measures taken by the RBI against the bank will be lifted once it is satisfied that the bank is in compliance with major critical observations the central bank has made concerning the bank.

In the last monetary policy meet, RBI governor Shaktikanta Das commenting on the service outages many banks have faced in the past said, we cannot put thousands, or lakhs of customers who are using digital banking into any kind of difficulty for hours together, and especially when we are ourselves giving so much of emphasis on digital banking, it is important that the public confidence in digital banking has to be maintained.

He further went on to add that HDFC Bank has an overwhelming presence in the digital payment segment in the internet banking segment. We have some concerns about certain deficiencies (in the bank). And therefore, we felt that it is required and it is necessary that HDFC Bank strengthens its safety and the IT systems before expanding further.

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