Bank of Baroda (BoB) on October 11, 2023 said that it has taken corrective measures in response to the Reserve Bank of India’s (RBI) directive to suspend the on-boarding of new customers onto its ‘Bob World’ mobile application. The RBI’s ban issued a day earlier with immediate effect, was prompted by “certain material supervisory concerns” surrounding the app’s customer on-boarding process.
“This action is based on certain material supervisory concerns observed in the manner of on-boarding of their customers onto this mobile application,” RBI had said in a release.
BoB’s Disclosure As Per Sebi Requirement
In a notification to the exchanges on October 10, 2023, Bank of Baroda said: “We would like to inform, in pursuance of the above LODR Regulations, that the Reserve Bank of India has vied its Press Release no. 2023-2024/1083 dated October 10, 2023, directed Bank of Baroda to suspend, with immediate effect, any further on-boarding of customers onto its ‘Bob World’ mobile application, based on certain supervisory concerns that RBI had observed in the bank’s mobile banking on-boarding processes. Further on-boarding of customers on the “Bob World" application will be subject to further strengthening of related processes by the bank to the satisfaction of RBI.”
It added: “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.”
Bank of Baroda has acted promptly to address RBI’s concerns and has initiated steps to close any remaining compliance gaps. The bank said it remains committed to working closely with the RBI to resolve these issues to RBI’s satisfaction.
The bank sought to reassure its customers and the public, stating that this directive does not affect its other digital banking channels, including Netbanking, WhatsApp banking, debit cards, ATMs, and more, for both existing and new customers.
Moreover, Bank of Baroda does not expect the RBI’s action to have a substantial impact on its overall business and growth plans.
However, the announcement of the RBI’s directive had a marginal impact on Bank of Baroda's share price, causing it to dip by 3.06 per cent to Rs 207.7 from the previous day.
Incidentally, RBI had also imposed restrictions on HDFC Bank in 2020, with restrictions on issuance of new cards and the launch of new digital initiatives. The ban from RBI came due to repeated technical outages that HDFC Bank customers experienced in Internet banking, mobile banking, and payment utilities over the past two years.
Following remedial action from HDFC Bank, the RBI partially lifted the ban on card issuances in August 2021. However, the ban on launching new technology initiatives continued and was lifted in 2022.
