The Reserve Bank of India (RBI) has lifted the restrictions imposed on HDFC Bank which had prevented the country’s largest private sector lender from launching any new initiatives planned under its Digital 2.0 programme.

In December 2020, the RBI had directed HDFC Bank to temporarily halt all digital launches as well as new sourcing of credit card customers, following various outages or technical glitches in its internet banking platform for over two years.

In August 2021, the RBI had partially lifted the ban on HDFC Bank allowing it to resume issuance of new credit cards but had continued the embargo on the latter’s digital activities planned under its Digital 2.0 programme. 

“The RBI vide its letter dated March 11, 2022 has lifted the restrictions on the business generating activities planned under the bank’s Digital 2.0 programme. The members of the board of directors have taken note of said RBI letter,” the lender said.

"We have utilised this time to draw up short, medium, and long-term plans to meet the evolving digital requirements of our customers and we will roll out these initiatives in the days to come. We are happy that we will once again be able to offer our customers our full suite of best-in- class services and continue to serve them with dedication and humility," the bank added.

After the ban, the bank made substantial investments to upgrade its technology backbone to prevent disruptions when the traffic increased.

Some of the key initiatives that the bank undertook include tripling the UPI capacity, net banking and mobile banking capacity, which was doubled to manage 90,000 users concurrently. “This is a significant step, as most of our customers rely on digital channels for the banking needs,” HDFC Bank chief financial officer Srinivasan Vaidyanathan told analysts after the bank’s fiscal-third quarter earnings call.

RBI was expected to lift the ban with the bank rejigging its entire gamut of technology systems including its data centres.

The bank also migrated its four data centres in Bengaluru and Mumbai to state of the art-facilities. HDFC Bank said it is moving to the next level of disaster recovery with DR automation and implementation of hot DR active asset setup for key applications. “We have made significant upgrades in the network and security infrastructure to support our exponential growth in digital transactions,” Vaidyanathan had earlier told analysts.