HDFC Bank's frequent digital outages credit negative, says Moody's

Rating agency Moody’s said on Monday that the temporary ban on acquiring news credit card customers and new digital launches imposed on HDFC Bank is credit negative as the lender increasingly relies on digital channels to source and service customers.

Reserve Bank of India’s action was in response to weaknesses in HDFC Bank's digital infrastructure and operational resilience.

The recurring outages also risk hurting the bank's brand perception among a growing and increasingly digital-savvy customer base, and increase the chances of clients switching to other banks, which would lead to a reduction in revenue and low-cost retail funding, Moody’s said