The Reserve Bank of India (RBI) has directed Bank of Baroda (BoB) to suspend any further onboarding of their customers onto the ‘bob World’ mobile banking application. This direction to BoB from the RBI is with immediate effect. However, do note that the RBI directive to BoB has specified that existing customers of ‘bob World’ mobile application should not be impacted in any way.
“The bank has been further directed to ensure that already onboarded ‘bob World’ customers do not face any disruption on account of this suspension,” said the RBI in a press release dated October 10, 2023.
Why has the RBI suspended onboarding of customers onto ‘bob World’?
“This action is based on certain material supervisory concerns observed in the manner of onboarding of their customers onto this mobile application,” said the RBI press release.
What does BoB have to do now to fix the issue?
The RBI has said that further onboarding of customers of BoB on the ‘bob World’ can only be made if BoB has fixed the deficiencies noticed by the regulator (RBI).
“Any further onboarding of customers of the bank on the ‘bob World’ application will be subject to rectification of the deficiencies observed and strengthening of the related processes by the bank to the satisfaction of RBI,” said the RBI.
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In a stock exchange filing dated October 10, 2023 the BoB has said: “While the Bank has already carried out corrective measures to address the concerns of the RBI, we have initiated further steps to plug any remaining gaps identified and we will work closely with the RBI to address their concerns at the earliest to their satisfaction. We would also like to assure all our existing customers that they will not face any disruption whatsoever and will continue to enjoy uninterrupted services on the Bank’s bob World mobile app. Further, this order does not impact any of the Bank’s other Digital Banking channels such as Net Banking, WhatsApp Banking, Debit Cards, ATMs, etc. for servicing its existing customers as well as for onboarding of new customers. We would like to reassure all our customers that our Bank’s Mobile Banking application is fully secure with robust security controls and features.”
Allegations against BoB earlier
According to a Times of India (TOI) from July 2023, there was an allegation of malpractice by BoB employees reported by a news channel which quoted various whistleblowers. According to the whistleblowers cited by the news channel, BoB’s employees used mobile numbers of sanitation workers, security guards, and others to register with bank accounts in order to give a picture of increased adoption of the ‘bob World’ mobile app.In the same TOI report cited above, a BoB spokesperson had denied allegations that their employees had indulged in malpractices to increase the customer base of ‘bob World’ mobile app.
As per the TOI report, the BoB spokesperson had said: “The Bank reiterates that a fully system-authenticated and customer consent-based process has been and is currently being followed for undertaking any mobile banking app registrations in the bank. The bank has a current mobile banking activated user base of 3 crore customers, all of whom are linked to a unique mobile number seeded with their bank account.”
Similar move by RBI in case of HDFC bank in the past
In a similar move in the past, the RBI had barred HDFC Bank from launching new digital banking initiatives and issuing new credit cards on December 2, 2020. The restrictions were imposed on the bank due to multiple glitches in the bank’s internet and mobile banking systems over the past two years, as per media reports.
At the time of imposing the restrictions, RBI said it would relax on norms only when the bank manages to address the issue of glitches in its online banking systems. As per a media report, HDFC Bank had added 1 lakh new credit card customers every month between April and November, 2020, following which it was banned. RBI lifted the ban in March 2022.