Impact of HDFC Bank's Multiple Digital Outages on Zerodha?


Since HDFC bank is the bank for Zerodha, have these multiple digital outages impacted Zerodha’s users and business?

HDFC bank hasn’t implemented 24x7 NEFT yet for corporate/ business accounts. RBI had announced the mandate on 16 Dec 2019. Even after almost a year, it is not done otherwise, Zerodha users would have enjoyed faster credit of funds to their bank account upon withdrawal of funds from Zerodha trading account. No, please don’t tell me again I always talk about free float/ faster access to money. It’s about the value it brings in and not blaming you here, it’s the bank that hasn’t implemented it yet. :slight_smile:

Earlier this year, when the Yes bank moratorium was announced, at that time Zerodha users who had Yes bank as their primary account, had to take the trouble of changing their primary bank. Likewise, users having Laxmi Vilas Bank, etc more such cases where users had to take action to mend ways.

Zerodha users can have secondary and tertiary banks to their account. Likewise, does Zerodha also have such secondary/ tertiary bank provisions just in case of such outages or mishap?

None of the banks have implemented this for merchants yet.

We bank with HDFC, ICICI, Kotak, SBI, and more. So if you have SBI, on Kite, the fund transfers happen to the SBI exchange client account.
HDFC Bank is from where you receive the fund withdrawal payouts, but we have backups for that as well. We are working on enabling instant payouts through another bank for <Rs 50k withdrawals.


RBI’s action on HDFC Bank’s multiple digital outages reminded me of my experience with the bank. Bit off-topic, but sharing as it would throw light on digital capabilities of the bank:

Case 1:
In 2015, when the Govt launched PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) and PMSBY (Pradhan Mantri Suraksha Bima Yojana), I had opted-in for the program at HDFC Bank where annually Rs 330 + Rs 12 = total Rs 342 is the insurance premium amount. I had set-up a standing instruction for the premium debit with my HDFC bank account. I got an acknowledgment receipt.

In 2018, I was converting all my life, term and health insurance policies into digital format in an eIA (e Insurance account) so I reached out to HDFC Bank asking for the policy number of the PMJJBY and PMSBY policies. I was told there is no policy number, only the reference number in the acknowledgment slip is provided. I contested that SBI and other banks are allowing users to download PMJJBY and PMSBY policy certificates online. HDFC Bank has no provision for it. Through my bank manager who had become friendly, I got Aditya Puri’s email address. I sent him an email asking how do I trust the bank, how can I be sure that this is not another scam. Crores of customers have taken the PMJJBY and PMSBY policies which gets auto-renewed every year and HDFC Bank is not providing any policy details.

I received a response from his PA and Senior management that the said work is in progress and soon customers would be able to download the policy certificates online. It’s been over 2 years and yet the policy information is not available. In between, I responded back to that email asking if it will complete before you retire? No response received.

Case 2:
Last year RBI announced 24x7 NEFT free with faster settlement. Earlier NEFT transactions would take time to settle. If you have HDFC bank account and you initiate a payment, on the fund transfer page, by default IMPS is selected. It had happened with me a couple of times in the past that I forgot to select NEFT and after making payment I realized I paid through IMPS in hurry and it charged me about Rs 5 per transaction. I sent an email to Aditya Puri again saying now that RBI has made NEFT 24x7 free with faster settlement, why is NEFT not the default option selected. I have been a coder myself so I know it’s just one line of code change to set NEFT as the default option of the radio button, or you can remove the auto-selection of any option by default. By having IMPS as the default selection bank is making money on the ignorance of customers which doesn’t look good. When NEFT was not 24x7 fast, there was value in IMPS. But now the value is in NEFT. Moreover, let the customers decide how they want to pay. I got a response from the senior management that such decisions are taken by the technical team.

This apathy and slow speed of digital adaptation and resolution were enough for me to cut ties with HDFC bank. I removed the bank details from everywhere - insurance policies, mutual funds, salary account, demat account etc everywhere. I know my action of cutting ties with HDFC is a drop in an ocean but I can decide for myself at least.

So when I read about RBI’s action on HDFC bank, I was not surprised at all.

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That would be great. It is for things like this that i stick with zerodha,
Sometimes i feel tempted to switch so that i can save brokerage but then i am reminded that with such brokers i might end up losing much more than brokerage saved when some mishap happens. The expeirnece with zeordha is just so streamlined, that i dont think i’ll switch ever.
But please please fix the option buying issues. It hard to implement Iron Condors with limited capital. I can’t short first and then buy later. I need to buy first to reduce margin. Please allow baskets order where Buy and Sell legs are present to be executed. Because when i click on execute, i cant stop the order midway after only buying options. Shorts will also happen even if they’re placed lower in the basket. So if you can allow to short first and then buy, please also allow to buy first and short next second when all order are present in basket and “execute” is pressed. Thanks

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Not sure why RBI taking action against HDFC only. Same should happen with SBI also. Last week SBI Yono was not working for 3 days.
In September and October 2020 SBI has highest downtime. See this answer for more details.

Also as per my personal experience use bank for banking services not for insurance other products.

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