RBI restriction on mobile app causes Bank of Baroda to suspend employees

19 Oct 2023 , 12:48 PM

After the RBI banned the bank from onboarding new users into its ‘Bob World’ mobile application last week, it suspended certain workers and launched an investigation to improve accountability.

Some employees have been suspended in Bhopal, Baroda, and Rajasthan, and an investigation has been launched. So far, the suspension has been limited to smaller villages outside of major cities, according to a source familiar with the situation.

The bank’s decision followed the RBI’s restriction on the public sector bank onboarding new clients due to what the regulator described as ‘certain material supervisory concerns observed in the manner in which the bank has taken on customers thus far.’

The central bank’s decision came nearly three months after a news network revealed how the bank linked bank accounts to unregistered mobile numbers and signed these numbers up for the app. Even if users were de-registered after signing up, the number of downloads and sign-ups increased artificially.

The RBI stated that any further onboarding of clients on the ‘Bob World’ application will be conditional on the bank correcting the shortcomings and strengthening the related processes to the satisfaction of the regulator.

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