HDFC bank has met 85 percent of RBI’s technology requirements, and the ball is now with the regulator as to when the ban on issuing new credit cards is to be lifted, the CEO and CEO of RBI said on Saturday.
Jagdishan reached out to shareholders at its first annual general meeting as executive head of the largest private lender, saying a technology audit was also over and the RBI will now independently decide when the punitive measures imposed on the bank should be lifted.
Frustrated by repeated technical failures at HDFC Bank, the RBI Took an unprecedented measure against the lender in December 2020 by freezing the issuance of new credit cards, a segment in which it was market leader, as well as banning the launch of new digital offerings.
“We gave the regulator a milestone on the things we do in technology and follow their recommendations and guidelines. We’ve covered a very significant part as we speak. Almost 85 percent of what we had to do.” is covered, “said Jagdsihan, who has been with the lender for over two decades and was a change agent in the years leading up to his appointment.
“The ball is up to the regulators. As they see fit, as they see that we are on the right track, I am sure that at some point they will lift the embargo,” he added.
Realizing the bank has lost market share in the credit card segment due to the ban, Jagdishan said technical failures are a global phenomenon, but it’s time to bounce back from a setback the bank got it wrong about leads to a knock on the knuckle The regulator.
He added that the technology team had been working on this aspect for the past few months in order to be able to perform a disaster recovery in a timely manner and that the confidence to respond to any situation is now very high.
The bank is working on a project to move all of its back-end work to the cloud, but has to deal with legacy systems in the meantime, he said, adding that there is a board committee that deals with the IT aspect deals.
Jagdishan exuded confidence that although they may have lost ground, there is plenty of energy to recover once the RBI Penalties are lifted. By the time RBI gives the green light, the bank’s plates are full of the work it needs to do to focus on technology and improve customer service, he added.
Defending the bank’s record in technology investments, he stated that it was able to reduce its cost-income ratio from 49 percent in the past six years to 38 percent simply because of the flow of resources.
The fear of being disturbed by the nimble fintech companies is very real and the bank has chosen how to stay like them in order to stay relevant, he said, adding that they had to and did in the next three years the journey will be over.
When asked about the determination of accountability, Jagdishan said the board and management have decided to take action not only on the technology front, but also other issues that have caused the bank to face rapeseed for the past two years. Action.
HDFC bank was ordered by RBI earlier this year to pay a fine of Rs 10 crore for deficiencies in the auto loan industry where APS units were bundled with loan sales.
Jagdishan also added that all failings at the bank are taken very seriously and assures that such cases will decrease over time.
When asked about the effects of the Mastercard ban, Jagdishan admitted that the American card issuer was a key partner for the bank, but added that it also has relationships with rivals Visa and Rupay that will be used once issuance resumes cards are allowed.
It is premature to discuss divesting stakes in its brokerage business, HDFC Securities, but the company is working on its own discount broking offering to regain market share, Jagdishan said.
He also said that HDB Financial Services suffered from the impact of the pandemic on the target demographic, resulting in a 4-5 fold increase in stress levels. The company will recover once the pandemic is over and economic activity resumes, he said.
In the medium term, HDFC bank could look at HDB Financial Services’ price and then look at a quote once the company has recovered, he said.
Jagdishan said the bank only got 40 working days in the first quarter and was pleased with the 14 percent profit growth it was able to achieve.
He said over 17 percent of the 1.2 lakh workforce were infected with the virus and had also lost many people, including some young. The deceased’s loved ones will be given adequate assistance, including the offer of work, he said.
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