Bank of Baroda surges 3% after RBI allows onboarding of new customers on 'BoB World' app

So far this year, the stock of this public sector lender surged over 15 percent, outperforming 2 percent rise in the benchmark Nifty 50 index

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Shares of Bank of Baroda surged 3.4 percent to Rs 271 per share on May 9 after the Reserve Bank of India (RBI) allowed the lender to onboard new customers on its mobile application 'BoB World.' The relaxation comes after six months following RBI's supervisory concerns observed during an inspection of the bank's processes.

So far this year, the stock of this public sector lender surged over 15 percent, outperforming a 2 percent rise in the benchmark Nifty 50 index.

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Bank of Baroda, in an exchange filing, said that the RBI conveyed to the bank its decision to lift restrictions on 'BoB World' with immediate effect and it will now be able to onboard new customers on its mobile banking app.

Earlier last year, the RBI had directed BoB not to add customers to its 'BoB World' app after complaints surfaced that some of the bank employees were using mobile numbers of strangers to onboard customers for mobile banking to meet enrolment targets.

The regulator had underlined material supervisory concerns in the onboarding process and said that further onboarding would be subject to rectification of deficiencies.

ALSO READ: RBI allows Bank of Baroda to onboard customers through BoB World app

The 'BoB World' app is a primary section for large section of customers, facilitating account openings through video KYC. BoB is the second-largest PSU bank and third-largest state-owned bank in terms of mobile banking active customers.

The lender will announce its Q4 results on May 10, 2024. Analysts at Axis Securities expect BoB's net interest income (NII) to marginally decline by 0.7 percent year-on-year (YoY) to Rs 11,439 crore in Q4FY24 from Rs 11,525 crore in the year-ago period. Net profit, too, is likely to dip by 0.7 percent YoY to Rs 4,742 crore in Q4FY24.

Some of the key monitorables post Q4 results would be the lender's asset quality outlook, loan book traction, and management's commentary on impact of RBI's draft project financing norms.

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