RBI allows Bank of Baroda Approval for Customer Onboarding via BoB World App

The Reserve Bank of India has amended its previous decision to restrict BOB World, now permitting the platform to add customers via its application, the Bank of Baroda announced to the stock exchanges on May 8. The bank confirmed that this revision takes immediate effect for the PSU lender.

On October 10, the regulator directed Bank of Baroda to halt the addition of new customers to its BoB World mobile app due to issues related to service disruptions and unauthorized associations of mobile numbers with customer bank accounts, which were reportedly done to inflate registration numbers on its mobile banking platform.

The bank said, "We wish to inform that the RBI conveyed to the Bank its decision to lift the restrictions on Bob World with immediate effect, as such the bank is free to onboard customers through Bob World application in accordance with the applicable guidelines and extant laws /regulations." 

In October 2023, the banking regulator instructed Bank of Baroda to halt the addition of new customers to its 'Bob World' mobile application, citing 'certain material supervisory concerns' related to the operational processes.

In July 2023, media outlets reported allegations that Bob World had manipulated customer accounts by linking the contact details of various individuals to artificially boost the number of registrations on its mobile application.

After receiving directions from the RBI, Bank of Baroda stated that it had implemented corrective actions to resolve the issues identified by the RBI and was continuing to address any remaining deficiencies. In response, the bank has made changes at both the field and corporate levels, which included the resignation of Chief Digital Officer (CDO) Akhil Handa.  

In September 2021, Bank of Baroda introduced its digital banking platform 'BoB World'. This application offers a comprehensive virtual banking experience, consolidating all of its digital banking services in one location for its customers.

On October 16, Moneycontrol disclosed that Bank of Baroda is likely to submit a corrective report concerning the audit of the BOB World app to the RBI within the next two weeks. A senior official, who wished to remain anonymous, stated, "The RBI had halted new customer onboarding to our BOB World. We are currently undertaking a rectification effort and plan to forward a report to the RBI in the upcoming two weeks."

The RBI's decision to lift the ban on customer onboarding via the BoB World app could significantly benefit the public sector bank's stock. According to a report from Macquarie last year, the app is responsible for 43% of time deposits and three-quarters of all retail loans issued by Bank of Baroda.