The second-largest public sector bank in India, Bank of Baroda (BoB), is facing app-related issues. The Reserve Bank of India (RBI) has directed BoB to stop adding customers to its mobile app due to problems in the onboarding process. This action by the central bank comes in response to complaints that some BoB employees used strangers’ mobile numbers to onboard customers for mobile banking to meet enrollment targets.

BoB is the second-largest public-sector bank and the third-largest state-owned lender in terms of active mobile banking customers. The RBI had previously imposed restrictions on India’s top private lender, HDFC Bank, in its digital operations for over a year, before lifting them in March 2022.

RBI’s Directive to the Bank of Baroda

Bank of Baroda has been instructed to ensure that existing app users do not face any disruptions. The RBI’s action is based on concerns about the manner in which customers were being onboarded onto the “BoB World” application. The central bank stated, “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.”

Response from Bank of Baroda

In response to the RBI’s directive, Bank of Baroda stated, “While the bank has already carried out corrective measures to address the concerns of RBI, we have initiated further steps to plug any remaining gaps identified and will work closely with RBI to address their concerns at the earliest to their satisfaction.” The bank assured that new customers would still have access to other digital channels, including net banking and WhatsApp banking, in addition to debit cards and ATMs.

Bank of Baroda’s App and Customer Impact

Bank of Baroda had previously stated that they have checks in place to ensure that the app cannot be linked to a mobile number more than once. The lender also mentioned that customers need to follow a two-factor authentication process to register or update a mobile number. The restriction on onboarding new customers through the app could potentially impact new account openings, as the mobile app is a primary channel for a significant portion of customers. The app also caters to non-customers by enabling account opening through video KYC.

BoB’s App Usage Statistics

In its presentation following the FY23 results, Bank of Baroda revealed that its app had over 3 crore activated users, with 41 lakh customers conducting 86 lakh transactions every day. The app, which boasts 8.1 million daily transactions, also facilitates 43% of time deposits for the bank. It’s worth noting that the action taken against BoB marks the first instance where the RBI has directed a bank to block the mobile banking channel for new customers, highlighting the gravity of the situation.

The Bank of Baroda’s mobile app is named ‘BoB World.’

Key points regarding Bank of Baroda’s app troubles and the RBI’s actions:

RBI Directives: The Reserve Bank of India (RBI) has instructed Bank of Baroda (BoB) not to add new customers to its mobile app due to concerns over the onboarding process.

Lapses in Onboarding Process: The central bank’s action follows complaints that some BoB employees used the mobile numbers of strangers to onboard customers for mobile banking to meet enrolment targets.

Ranking and Customer Base: Bank of Baroda is the second-largest public sector bank and the third-largest state-owned lender in terms of active mobile banking customers.

Previously Lifted Restrictions: The RBI had previously placed restrictions on the country’s top private lender, HDFC Bank’s digital operations for more than a year, before lifting the curbs in March 2022.

RBI’s Directive: The RBI has directed BoB to rectify the deficiencies observed in the onboarding process and strengthen related processes before adding new customers to the ‘BoB World’ application.

Bank of Baroda’s Response: BoB has stated that it has already taken corrective measures to address RBI’s concerns and is working closely with the regulator to resolve any remaining issues to its satisfaction.

Alternative Channels: New customers are encouraged to use alternative digital channels, including net banking and WhatsApp banking, in addition to debit cards and ATMs.

App Usage: Bank of Baroda’s app is a significant channel for customer transactions, with 87% of the bank’s funds transfers using the immediate payment system taking place through the app.

Customer Base: The bank’s app serves both customers and non-customers, enabling account opening through video Know Your Customer (KYC).

RBI’s Unprecedented Action: The RBI’s directive to block the mobile banking channel for new customers is a rare move and underscores the seriousness of the issues identified.

App Name: The Bank of Baroda’s mobile app is named ‘BoB World’ and plays a crucial role in the bank’s digital banking services.

App Statistics: As of August, the ‘BoB World’ app had over 3 crore activated users, with 41 lakh customers conducting 86 lakh transactions daily.

These key points summarize the situation regarding Bank of Baroda’s app-related issues and the RBI’s response.

Via @ gadgetsnow