Delhi High Court Protects 18 Million SBI Credit Card Holders from IT Service Disruption

In a significant development, the Delhi High Court has come to the rescue of 18 million credit card holders by restraining Kony, Inc. from disrupting IT services provided to SBI Card, a subsidiary of SBI Cards & Payment Services Ltd.

SBI Cards & Payment Services Ltd. took legal action against four connected entities, including Kony, Inc., alleging potential disruption to their IT services. The dispute stemmed from a renewal negotiation process that took an unexpected turn, leading to a significant increase in costs proposed by Kony.

The case revolves around a licensing agreement initiated in 2014, which was subsequently renewed until 2023. Negotiations for further renewal were underway, with SBI anticipating a cost of approximately Rs 1.75 crore for an additional three-year term. However, unexpected changes in the commercial proposal raised the cost to over Rs 10 crore for just one year.

Faced with this sudden escalation and lack of communication, SBI issued a cease and desist notice to Kony, prompting legal action to safeguard its credit card services, which cater to millions of customers across India.

SBI argued before the Delhi High Court that any disruption to their IT services could pose serious risks to customers, including potential data breaches and financial losses. The bank emphasized the critical role of mobile banking apps, which rely on stable IT infrastructure, in delivering essential credit card services.

The court, after reviewing SBI’s submissions and evidence, issued a temporary injunction in favor of SBI Card, restraining Kony from disrupting IT services. However, the court’s order is contingent upon SBI Card depositing a sum of Rs 55 lakh with the Registrar General of the Court within one week.

This ruling provides a temporary reprieve for SBI and its millions of credit card holders, ensuring uninterrupted access to essential financial services. As the case progresses, stakeholders will closely monitor developments, awaiting a final resolution to the dispute.

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