RBI orders Bank of Baroda to suspend onboarding customers to its mobile app
New Delhi, Oct 10, 2023
RBI asked the bank to ensure that no existing customer of the app faces any disruption due to this suspension
The Reserve Bank of India (RBI) on Tuesday directed the Bank of Baroda to halt the onboarding of new customers onto its "bob World" mobile application. The bank has also been instructed to ensure that no existing customer of the application faces any disruption due to this suspension.
In an official notice, RBI stated, "The Reserve Bank of India, exercising its power under Section 35A of the Banking Regulation Act, 1949, has directed Bank of Baroda to suspend, with immediate effect, any further onboarding of customers onto the 'bob World' mobile application."
The action is based on "certain material supervisory concerns" observed in how customers were onboarded onto this mobile application. Any future onboarding of Bank of Baroda customers on the 'bob World' application will be contingent upon rectifying the identified deficiencies and the strengthening of the relevant processes by the bank to the satisfaction of RBI," the notice elaborated.
The notice also clarified, "The bank has been further directed to ensure that customers who are already onboarded on 'bob World' do not face any disruption due to this suspension."
Earlier this year, the central bank imposed a fine of Rs 30 lakh on Bank of Baroda for deficiencies in regulatory compliance related to Know-Your-Customer (KYC) norms.
On the preceding Monday, the Central Bureau of Investigation (CBI) arrested five individuals, including two retired officials from the Rail Land Development Authority (RLDA) and Bank of Baroda, in relation to an alleged misappropriation of Rs 31.50 crore.
The CBI registered the case based on a complaint from RLDA, alleging it had incurred a loss of Rs 31.50 crore due to actions by unidentified individuals.
"It was claimed that RLDA had initially invested an approximate amount of Rs 35 crore for one year in the form of a fixed deposit at the Bank of Baroda, Vishwas Nagar branch, Shahdara, Delhi. The maturity proceeds were supposed to be reinvested for a period of three months," a CBI spokesperson elaborated.
The spokesperson added that the bank had allegedly invested only Rs 3.50 crore and diverted the remaining Rs 31.50 crore to various shell companies in collusion with bank officials, RLDA officials, and private individuals.
[The Business Standard]
