RBI Directs Bank of Baroda to Suspend New Customers Registrations
The Reserve Bank of India (RBI) has instructed Bank of Baroda to temporarily suspend new customer registrations for its Bob World mobile application. The directive also includes a mandate to ensure that existing app users face no disruptions during this suspension period.
Mumbai, India: The RBI, exercising its authority under Section 35A of the Banking Regulation Act, 1949, has taken this action in response to “certain material supervisory concerns” regarding the onboarding process for customers using the ‘Bob World’ mobile app. Effective immediately, the Bank of Baroda is required to halt any further onboarding of customers onto the app.
According to an official notice issued by the RBI, “The bank is obligated to rectify the identified deficiencies and strengthen the relevant processes to the satisfaction of the RBI before any future onboarding of Bank of Baroda customers onto the ‘bob World’ application can occur.”
Furthermore, the notice emphasizes that the Bank of Baroda must ensure that existing ‘Bob World’ users experience no interruptions during this suspension period.
This action comes after the RBI imposed a fine of Rs 30 lakh on the Bank of Baroda earlier this year due to regulatory compliance shortcomings related to Know-Your-Customer (KYC) norms.
Just a day before this directive, the Central Bureau of Investigation (CBI) made headlines by arresting five individuals, including two retired officials from the Rail Land Development Authority (RLDA) and Bank of Baroda. This arrest is connected to an alleged misappropriation of Rs 31.50 crore.
The case was registered by the CBI based on a complaint from RLDA, which claimed a loss of Rs 31.50 crore due to actions by unidentified individuals.
According to a CBI spokesperson, “RLDA had initially invested approximately Rs 35 crore for one year in the form of a fixed deposit at the Bank of Baroda’s Vishwas Nagar branch in Shahdara, Delhi. The maturity proceeds were supposed to be reinvested for a period of three months.”
However, it is alleged that the bank only invested Rs 3.50 crore and diverted the remaining Rs 31.50 crore to various shell companies in collusion with bank officials, RLDA officials, and private individuals.
About Bank of Baroda:
Founded on July 20th, 1908, the Bank of Baroda is a state-owned financial institution headquartered in Vadodara, Gujarat, formerly known as Baroda. As a leading public sector bank in India, it boasts a robust domestic presence and advanced self-service channels.
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