Bank of Baroda, which is the second largest state-owned lender in India after State Bank of India, has been directed by the Reserve Bank of India to immediately halt any further onboarding of customers onto its mobile application 'bob World'.
The central bank has invoked its authority under section 35A of the Banking Regulation Act, 1949, to take action against the lender based on certain supervisory concerns it identified in the way new customers were being onboarded onto the mobile application.
"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," the central bank said.
Bank of Baroda responded by giving a clarification via an exchange filing.
“We would like to inform, in pursuance of the above LODR Regulations, that the Reserve Bank of India has vide its Press Release no. 2023-2024/1083 dated 10th October 2023, directed Bank of Baroda to suspend, with immediate effect, any further onboarding of customers onto its ‘bob World’ mobile application, based on certain supervisory concerns that RBI had observed in the Bank’s mobile banking onboarding processes. Further onboarding of customers on the 'bob World' application will be subject to further strengthening of related processes by the Bank to the satisfaction of RBI," the bank said in an exchange filing.
Bank of Baroda has also said that the action taken by the RBI would not have any effect on the app's current users. It has said that the BoB World application will continue to run smoothly.
In July 2023, it was reported that Bank of Baroda officials linked bank accounts to unrelated mobile numbers in order to achieve stiff onboarding targets.
The news report noted that in March 2022 the Bank of Baroda officials from the Bhopal zone were given a target of onboarding at least 150 existing bank customers for the bank’s new app, 'bob World', which was launched six months before.
Bank of Baroda's share was trading 3.20 per cent lower at Rs 207.45 apiece on the NSE today, at 1:50 PM.