The Reserve Bank of India (RBI) has prohibited Bank of Baroda (BoB) from onboarding new customers through its ‘Bob World’ mobile app due to significant supervisory concerns. In an announcement to the exchanges on Tuesday, Bank of Baroda acknowledged the concerns and stated that corrective measures were being implemented to address the identified deficiencies.
“We would like to inform, in pursuance of the above LODR Regulations, that the Reserve Bank of India has vide its Press Release no. 2023-2024/1083 dated 10th October 2023, directed Bank of Baroda to suspend, with immediate effect, any further onboarding of customers onto its ‘Bob World’ mobile application, based on certain supervisory concerns that RBI had observed in the Bank’s mobile banking onboarding processes. Further onboarding of customers on the ‘Bob World’ application will be subject to further strengthening of related processes by the Bank to the satisfaction of RBI,” stated BoB in an exchange filing.
While the bank has already taken corrective measures to address the RBI’s concerns, it is initiating further steps to address any remaining gaps identified. The bank assured that existing customers would not face any disruptions and would continue to enjoy uninterrupted services on the Bank’s Bob World mobile app. “Further, 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 of new customers,” added the lender. Bank of Baroda emphasized that it does not anticipate the RBI’s action to have a substantial impact on its overall business and growth plans.
The share price of Bank of Baroda witnessed a nearly 4 percent decline during morning trading on the BSE on Wednesday. By 9:40 am, the stock was trading 2 percent lower at ₹210.05 per share on the NSE. This decline is linked to actions taken by the Reserve Bank of India (RBI) due to substantial supervisory concerns associated with the onboarding of customers onto the ‘bob World’ mobile application. The RBI stated that “Any further onboarding of customers of the bank on the ‘bob World’ application will be subject to rectification of the deficiencies observed and strengthening of the related processes by the bank to the satisfaction of RBI,” in an official statement. This move by the RBI is reminiscent of its action against HDFC Bank in December 2020, where the bank was barred from issuing new cards and launching new digital initiatives due to recurrent technical outages.