RBI Takes Action Against Bank Of Baroda, Bars New Customer Onboarding On Mobile App

The RBI has said the bank has been directed to ensure that existing 'bob World' customers do not face any disruption on account of this suspension.

New Delhi: The Reserve Bank of India (RBI) has barred state-owned Bank of Baroda from onboarding new customers on its mobile app, ‘bob World’, with immediate effect. The central bank cited material supervisory concerns for its action. The RBI said in a statement that the action is based on certain material supervisory concerns observed in the manner of onboarding customers onto the application, as per a report carried by news agency PTI.

The central bank did not elaborate on the specific concerns, but said that it is taking steps to protect the interests of depositors and promote financial stability.

RBI’s Action Against Bank Of Baroda

“The Reserve Bank of India has, in exercise of its power, under Section 35A of the Banking Regulation Act, 1949, directed Bank of Baroda to suspend, with immediate effect, any further onboarding of their customers onto the ‘bob World’ mobile application,” it said in a statement.

“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,” it added.

The RBI further said the bank has been directed to ensure that existing ‘bob World’ customers do not face any disruption on account of this suspension. The RBI’s action is likely to have a negative impact on Bank of Baroda’s customer acquisition efforts. The bank will not be able to onboard new customers on its mobile app, which is a popular channel for new customer acquisition. This could lead to a slowdown in the bank’s growth.

RBI Increases Gold Loan Limit

Recently, the RBI has increased the gold loan limit for UCBs that are good borrowers. Under the Bullet Repayment Scheme, UCBs can now lend up to Rs 4 lakh to customers against gold collateral. The loan must be repaid in full within 12 months. This move is likely to benefit both UCBs and their customers.

(With inputs from RBI)