The Reserve Bank of India (RBI) has directed the Bank of Baroda to immediately halt the onboarding of customers onto its ‘bob World’ mobile application due to significant supervisory concerns. This action, executed under section 35A of the Banking Regulation Act, 1949, calls for the rectification of identified deficiencies in the onboarding processes before any further customer additions can occur on the application. The RBI has emphasized that customers already using the ‘bob World’ app should not experience any service disruptions during this suspension.
Bank of Baroda has responded by assuring its customers that corrective measures have been implemented to address the concerns raised by the RBI. The bank is committed to working closely with the regulatory authority to swiftly resolve the issues to their satisfaction. In a filing to stock exchanges, the lender clarified that the RBI’s directive does not impact its other digital banking channels, such as net banking, WhatsApp banking, debit cards, ATMs, etc. Additionally, the bank stated that it does not anticipate the RBI’s action to have a material impact on its overall business and growth plans.
Abizer Diwanji, Partner & National Leader Financial Services at EY India, noted in an interview that while the RBI’s actions may not have a lasting impact from a technical standpoint, issues related to fraud could persist. He emphasized the importance of addressing any issues promptly, especially in the evolving landscape of fintech and digital lending, where challenges are likely to arise regularly. The Bank of Baroda’s ‘bob World’ business, while not currently significant, is undergoing scrutiny to effectively manage potential challenges as it scales up in the future.
