HDFC Bank's Shares Rise To A 2-Week high After RBI Removes Digital Ban

INSUBCONTINENT EXCLUSIVE:
HDFC Bank's Shares Rise To A 2-Week high After RBI Removes Digital Ban: ReportBENGALURU: HDFC Bank's shares rose nearly 3 per cent to a
two-week high on Monday after the Reserve Bank of India (RBI) removed restrictions placed on the company's digital operations."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
program
The members of the Board of Directors have taken note of the said RBI letter," HDFC Bank said."We are fully committed to ensuring continued
adherence to the highest standards of compliance with RBI recommendations," the lender added.In December 2020, the RBI had barred HDFC Bank
from launching any new digital products or services and issuing new credit cards till the lender resolved recurring tech issues, citing
to issue new credit cards in August 2021 but had kept the restrictions on its digital launches.The digital ban had stopped the bank's
ability to seamlessly tie up with vendors and launch digital personal loan products, Macquarie Research said in a note, according to
Reuters."What is more important here is the messaging from RBI
By lifting the ban, RBI is sending a signal that we are fine with the bank's IT system and capabilities," Macquarie said.Nomura said while
new businesses under Digital 2.0 would not visibly contribute to incremental revenue and profitability in the next few quarters, it expects
the digital acquisition of customers and wallet share to improve profitability over the longer term.Shares of HDFC Bank rose 3 per cent in
2021, underperforming a 13.5 per cent jump in the Nifty Bank index
The stock had declined 5.6 per cent this year by Friday's close, compared with a 2.6 per cent slip in the banking index, as worries about
high inflation and the Ukraine crisis pummeled investor sentiment."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," HDFC Bank said."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 lender added.