HDFC Bank has met 85 percent of the RBI's technological requests, and the ball is now in the regulator's court as to when the restriction on issuing new credit cards would be lifted, its managing director and chief executive Sashidhar Jagdishan said on Saturday. In his first annual general meeting as the executive head of the largest private sector lender, Jagdishan told shareholders that a technology audit was completed and that the RBI would now make an independent decision on whether to reduce the bank's penalties. Frustrated by frequent technical breakdowns at HDFC Bank, the RBI took an unusual move against the institution in December 2020, prohibiting it from issuing any new credit cards, a category in which it was a market leader, as well as establishing any new digital services. We have provided the regulator with a milestone in terms of what we are doing with technology and how we are complying with their advice and directions. As we speak, we have covered a considerable amount of the ground. "Almost 85 percent of what we needed to accomplish has been covered," said Jagdsihan, who has been with the lender for almost two decades and served as a 'change agent' in the years leading up to his promotion.
The ball is now in the hands of the regulator. "As they see fit, as they perceive that we are on the right road, I am certain that they will lift the embargo at some point," he continued. Recognizing that the bank has lost market share in the credit card category as a result of the ban, Jagdishan stated that while technical outages are a worldwide occurrence, it is the time required to recover from a setback where the bank miscalculated, leading to the ban. He said that the IT team has been working on this element of being able to invoke catastrophe recovery on time for the previous few months, and the trust in reacting to any crisis is currently very strong. The bank is working on a project to move all of its back-end operations to the cloud, but it must deal with old systems in the meanwhile, he said, adding that a board committee is looking into it.
Jagdishan voiced optimism that, although losing momentum, there is still enough energy to recover once the RBI fines are abolished. Until the RBI gives the go-ahead, the bank's plates are full with the work that has to be done by focusing on technology and enhancing customer service, he added.
The risk of being disrupted by agile fintech businesses is quite real, and the bank has opted to be like them in order to stay relevant, he said, adding that it has moved all of its procedures to the cloud and that the trip would be completed in three years. In response to a question about resolving responsibility, Jagdishan stated that the board and management have decided to take action against those who have erred not only on the technology front but also on other issues that have resulted in the bank receiving a rap on the knuckles in the last two years.
The year, the RBI fined HDFC Bank Rs 10 crore for flaws in the auto loans vertical, where GSP units were bundled with loan sales. Jagdishan also stated that any oversights are handled extremely seriously at the bank and that such incidents will decrease with time.
According to researchers, the impact of the pandemic on HDB Financial Services' target population has resulted in a 4-5 times rise in stress levels. He believes the firm will recover once the epidemic is finished and economic activity restarts. In the medium term, HDFC Bank may consider determining the price of HDB Financial Services and then considering a listing once the firm is rebounded, he added. Jagdishan stated that the bank received just 40 days of work in the first quarter and expressed pleasure with the 14% increase in profit that it was able to provide. He stated that the virus had infected over 17% of its 1.2 lakh employee base and that the company had lost many employees, including some children. Adequate assistance is being provided to the deceased's relatives, including job opportunities.
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