The Reserve Bank's directive to HDFC Bank for temporarily stopping all launches of the Digital Business generating activities and sourcing of new credit card customers is "credit negative for the lender", Moody's Investors Service said.

According to Moody's Investors Service, the move is credit negative as the bank is increasingly relying on digital channels to source and service its customers. "The recurring outages also risk hurting the bank's brand perception among a growing and increasingly digitally savvy customer base, and increases the potential that clients switch to other banks, which would lead to a reduction in revenue and low-cost retail funding," Moody's said. "We do not expect the regulators' action to materially affect the bank's existing business and financial profile."

Nevertheless, the ratings agency pointed out that RBI's action will delay the launch of HDFC Bank's Digital 2.0 initiative, under which the bank aims to consolidate all customers' digital transactions, including payments, savings, investments, shopping, trade, insurance and advisory services, into one platform.

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