HDFC gets orders to stop issuing any new credit cards

The Reserve Bank of India (RBI) has directed HDFC Bank, not to further issue any new credit cards as well as halt the launch of new digital businesses, according to a company filing with the stock exchanges. The order has come after a notable rise in the number of outages of its online services over the last two years, the most recent being on November 21.

"We take this opportunity to assure our existing customers that there is no reason to worry. You can continue to transact with the bank without any concern," said HDFC Bank MD and CEO Sashi Jagdishan in a statement.

"We realize that as our valued customer, you expect us to maintain a very high standard of service quality and experience. And sometimes, we have not been able to live up to your expectations. For that, please accept our sincere apologies," he added.

At the time, the bank’s only justification was an ‘unexpected outage’ at one of their data centres. No further details were given on whether it was an internal glitch, an external attack or just shoddy infrastructure acting up.

"Press releases issued by the bank from November 27 to December 5 clearly highlight the priorities of its PR department: it issued releases for the bank being selected for ‘Best MSE Bank (Private Sector)’, launch of a co-branded credit card, and partnering with a startup, but studiously avoided any mention of the failure of its digital platform," notes research analyst Hemindra Hazari.

In the past two years, this is the third time that the bank’s customers faced disruption at such a scale. While HDFC Bank claims that the RBI’s order will not affect any existing credit card, it should be noted that it’s currently the largest credit card seller in the country. The directions also come at a time when monthly trends indicate faster pick up in credit card spends and additions. In October, credit card requests crossed pre-COVID levels, according to TransUnion Cibil, a credit information company.