HDFC Bank share drops 2% after RBI bans lender from issuing credit cards

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HDFC Bank shares were trading down nearly 2% at the start of trading on Thursday after the central bank banned India’s largest private lender from adding new credit card customers or continuing its digital innovations.

The Bank’s official notification read: “RBI issued an order dated December 02, 2020 (the“ Order ”) to HDFC Bank Limited (the“ Bank ”) regarding certain incidents of Internet banking / mobile banking outages / payment of the Bank over the past 2 years, including the recent outages of the Bank’s Internet banking and payment system on November 21, 2020, due to a power outage in the main data center. ”(RBI ) on Thursday asked HDFC Bank’s board of directors to review the failures. and correct accountability for frequent failures of its digital payment services. ”

HDFC Bank’s share price opened at Rs 1,420.10 and then hit an intraday high of Rs 1,431.60, up 1.75%. However, the stock dropped its early gains and hit a low of Rs 1,379.05, down 1.9% from the previous close of Rs 1,406.95 on BSE.

HDFC Bank stock was trading above the 20, 50, 100 and 200 day moving averages, but below the 5 day moving averages. HDFC Bank stock has fallen 4% in the past 3 days of consecutive losses.

The total market cap of the lender stood at Rs 7,61,535 crore at today’s trading day. The HDFC share price has fallen 3% in one week. However, the stock gained 10% in a month and 10% in a year.

The Bank’s official notification read: “RBI issued an order dated December 2, 2020 (“ Order ”) to HDFC Bank Limited (the“ Bank ”) regarding certain incidents of Internet banking / mobile banking outages / payment of the Bank over the past 2 years, including the recent outages of the Bank’s Internet banking and payment system on November 21, 2020, due to a power failure in the main data center ”.

HDFC Bank added, “Over the past two years, the bank has taken several steps to strengthen its IT systems and will continue to work quickly to liquidate the balance and will continue to engage with the regulator in this regard. ”

On November 21, HDFC Bank’s entire payment stack had dropped due to a technical glitch. The unexplained failure of the Bank’s data centers interrupted Internet banking, UPI, IMPS and ATM.

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