RBI directs Bank of Baroda to halt customer onboarding for 'bob World' app
The central bank expressed certain material supervisory concerns around the manner of onboarding of new customers
The Reserve Bank of India (RBI) has issued a decisive order, instructing the Bank of Baroda to immediately cease enrolling new customers into its digital banking app, bob World.
The directive, issued on 10 October 2023, follows RBI's concerns over the bank's customer onboarding practices, including accusations of tampering with customer accounts.
RBI's decision was communicated through an official press release that stated: 'Bank of Baroda to suspend, with immediate effect, any further onboarding of their customers onto the 'bob World' mobile application. This action is based on certain material supervisory concerns observed in onboarding their customers onto this mobile application.'
The central bank further stipulated that the resumption of onboarding new customers onto the 'bob World' application would be contingent upon rectifying the deficiencies identified and strengthening related processes to the satisfaction of the RBI.
While taking this action, the RBI has also been careful to ensure that existing customers who have already been onboarded on the 'bob World' platform do not face any disruptions.
The RBI said, “The bank has been further directed to ensure that already onboarded 'bob World' customers do not face any disruption on account of this suspension.”
The directive from the RBI comes after reports emerged in July 2023 suggesting irregularities in the bank's onboarding processes for 'bob World.' The reports alleged that Bank of Baroda had tampered with customer accounts by linking contact details from different individuals to boost the number of registrations on the mobile application artificially.
In response to these allegations, Bank of Baroda has vehemently denied any wrongdoing.
The bank refuted claims that unauthenticated or non-customer mobile numbers were used to inflate app registrations.
Bank of Baroda stated, “The point raised on using unauthenticated, strangers, or non-customer mobile numbers for boosting app registrations is not factually correct, as one mobile number can be counted with only one mobile app at any time. The bank targets only active users, who can get onboarded only through the system controls in place, rather than mobile app downloads or registrations.”
The allegations against Bank of Baroda and the subsequent RBI directive have raised concerns about the integrity of digital banking services and the need for robust customer onboarding processes in the evolving financial landscape. The bank's compliance with the RBI's requirements will be closely monitored as it seeks to rectify the deficiencies and regain regulatory confidence.
As this situation unfolds, customers of 'bob World' will want to watch closely for updates and ensure the continued smooth functioning of their digital banking services.