In a notification to the exchanges, the lender said the audit will be carried out under Section 30 (1-B) of the Banking Regulation Act, 1949, at the cost of HDFC 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 as above,” the notification said.
On December 2, 2020, RBI had barred HDFC Bank from launching any new digital initiatives and issuing fresh credit cards. The penalty was issued in view of repeated outages at the bank’s data centres. In a recent post-results call, the bank management said it has envisaged two legs to its action plan for remedying its digital strategy. One is its cloud strategy, which involves a 12-18-month plan, and the other entails the implementation of other aspects of the plan over 10 to 12 weeks.
After the implementation of the short-term strategy, the lender expected RBI to inspect its progress.
The bank said it opened two million new accounts during the December quarter and the RBI directive to stop issuing new credit cards has not affected its deposit accretion. More than two-thirds of its credit card accounts come from its existing liability base.
Srinivasan Vaidyanathan, chief financial officer, HDFC Bank, said, “We haven’t seen any kind of an impact on that sense on an immediate basis, but to the extent that these are all temporary, we should get back and we know that the life cycle of a card to become a little meaningful is actually a two-year journey.”
In the meantime, the bank has to run programmes for activation and engagement. “There is enough room for having various intervention programmes to accelerate,” Vaidyanathan told analysts, adding, “It depends on what sort of programmes we implement at what time period so that we can crunch this build-up life cycle to a shorter one as we go along.”