RBI Imposes Suspension on Bank of Baroda for Onboarding New Customers on Mobile App

The Reserve Bank of India (RBI) has issued an immediate directive to Bank of Baroda (BoB) to cease the onboarding of new customers for its mobile banking platform, 'bob World,' citing significant supervisory concerns regarding the customer onboarding process. The RBI has stipulated that BoB must address the identified deficiencies and align its procedures with RBI standards before accepting new customers.

BoB, a public-sector bank, responded by stating that it is taking corrective measures to rectify the identified issues and will work closely with the RBI to ensure the regulator's satisfaction. This action by the RBI comes at a time when digital platform transactions are expected to surge during the festive season.

The bank has reassured existing 'bob World' customers that they will not experience any disruptions and will continue to receive uninterrupted services through the mobile app. Additionally, the RBI has confirmed that existing customers of the application will not face service disruptions due to this directive.

BoB emphasized that this directive does not impact its other digital banking channels, including Net Banking, WhatsApp Banking, Debit Cards, ATMs, and more, for serving both existing and new customers. The bank does not anticipate that this action will have a significant impact on its overall business and growth plans.

In July, BoB faced allegations in the media suggesting that the bank tampered with accounts to boost registrations on 'bob World.' The bank denied these allegations. According to BoB's financial year 2022-23 report, 'bob World' had 30 million customers, with activations rising significantly from 10.14 million to 10.27 million during FY22. Transactions on the platform increased by 25.66 percent, from 148.39 million in FY22 to 186.47 million. The bank's annual report for FY23 noted that it had incrementally added 10 million new customers to 'bob World' each year over the past two years, making it one of the highest additions in the Indian banking space.