'Taking corrective measures': BoB responds after RBI bars it from onboarding new customers through its mobile app

A day after the Reserve Bank of India barred Bank of Baroda (BoB) from onboarding new customers through its 'Bob World' mobile app, the public sector bank said it is taking corrective measures are being taken to address the deficiencies.

The central bank, in exercise of its power under section 35A of the Banking Regulation Act, 1949, on Tuesday noted that the step against Bank of Baroda was based on certain material supervisory concerns observed in the manner of onboarding of new customers onto this mobile application.

"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," the central bank said in a statement.

In reply, Bank of Baroda said: “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."

The lender further said the bank has already carried out corrective measures to address the concerns of the RBI. "We have initiated further steps to plug any remaining gaps identified and we will work closely with the RBI to address their concerns at the earliest to their satisfaction," the public sector bank added.

The PSU bank assured that existing customers will not face any disruption whatsoever and will 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 netbanking, WhatsApp banking, debit cards, ATMs, etc, for servicing its existing customers as well as for onboarding of new customers," the bank said in an exchange filing.

The bank does not expect the RBI's action to have a material impact on its overall business and growth plans.

On Tuesday, it was reported that the Bank of Baroda, which is second largest bank in India only after the State Bank of India, may raise Rs 10,000 crore ($1.35 billion) through the issuance of infrastructure bonds to finance infrastructure and affordable housing.

These long-term debt instruments are exempt from the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) as per Reserve Bank of India (RBI) guidelines.

As of September 22, bank credit growth was at 20 per cent year-on-year while deposit growth was at 13.2% over the same period, latest RBI data showed.

The bank's decision will be discussed further in a board meeting scheduled for Wednesday, October 11, where the issuance of a Rs 2,000 crore ($270 million) tier-1 bond will also be considered.

Bank of Baroda reported 17 per cent on-year growth in total advances at Rs 10.3 lakh crore, with domestic advances up 16.6 per cent on-year. International book, the bank said, rose 21 per cent YoY (6.4 per cent QoQ). Domestic retail loans grew 22.5 per cent YoY (5.4 per cent QoQ), as per the Q2 provisional business update.

Shares of Bank of Baroda were trading at Rs 208.90, down by 2.47 per cent, at 9.50 AM.

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