Exclusive: Bank of Baroda likely to file rectification report on BOB World app audit to RBI soon

The Reserve Bank of India (RBI), on October 10, directed BoB to stop onboarding new customers through BOB World, the lender’s digital banking application.

Public-sector lender Bank of Baroda (BOB) may soon file a rectification report based on the former’s audit of the BOB World app to the Reserve Bank of India (RBI) in the next two weeks, a senior bank official told Moneycontrol on October 16.

"The RBI had suspended new on-boarding of customers to our BOB World," the official said. "We are doing a rectification drive and hoping to send a report to the RBI in the next two weeks," said the official on condition of anonymity.

The Reserve Bank of India (RBI), on October 10, directed BoB to stop onboarding new customers through BOB World, the lender’s digital banking application.

“Bank of Baroda should suspend, with immediate effect, any further onboarding of customers onto the BOB World mobile application. This action is based on certain material supervisory concerns observed in the manner of onboarding customers onto this mobile application,” the central bank said in a press release on October 10.

The senior BoB official said that the bank is expecting the RBI to revoke the suspension before Diwali.

"We are very hopeful and are doing all rounds of checks diligently to satisfy the regulator. We are very sure that RBI will revoke this ban before Diwali," said the official.

RBI also said that any further onboarding of customers to the application will be subject to rectification of the deficiencies observed and strengthening of the related processes by the bank to the satisfaction of RBI.

An email sent to RBI and BoB seeking comments, remained unanswered till the time of publishing this report.

Aggressive rectification drive

A branch-level BoB employee, who did not wish to be identified, said the rectification process is progressing aggressively.

"We have been asked to work even on Sundays for the auditing. The top management is serious about the process," a BOB employee told Moneycontrol.

According to a branch manager, many business correspondence (BCs) were involved in the process of adding new customers as they used to get commission on opening new accounts. "But this could not have happened without the branch's consent," said the manager.

Earlier, in July 2023, media reports said that BOB World was tampering with customer accounts. The report alleged that the lender linked the contact details of different people to increase the number of mobile application registrations.

On this, the lender said that unauthenticated or non-customer mobile numbers for boosting app registrations are factually incorrect.

Defaults in only some areas

A senior official told Moneycontrol that, initially, the bank had found defaults only in some specific areas.

"See, we have over 8,200 branches, out of which there are over 52,000 BCs. So, in some areas, we have found irregularities in companies which are trying to fix it," said a person familiar with this matter.

However, BoB has assured its customers that they will not face any disruption whatsoever and will continue to enjoy uninterrupted services on the mobile application.

It also clarified that “this order does not impact any of the bank’s other digital banking channels such as Net Banking, WhatsApp Banking, Debit Cards, ATMs, etc., for servicing its existing customers as well as for onboarding new customers”.

“We would like to reassure all our customers that our bank’s Mobile Banking application is fully secure with robust security controls and features. The bank has always endeavoured to provide seamless digital banking services to its customers, and, over the last few years, the bank has made significant investments in technology, which provides customers with a seamless and secure banking experience, with robust controls and security features,” the BoB official added.