Many banks are now reevaluating their mobile app on-boarding processes following the Bank of Baroda case, with internal checks underway at public sector banks to investigate potential breaches, according to insiders.
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While the Reserve Bank of India is currently focused on Bank of Baroda, there is anticipation of action against other banks in the coming weeks. Allegations of bank employees fraudulently linking mobile numbers to customer accounts to inflate the app’s active user base are widespread across banks.
The unfolding of the BoB World App saga began in July when Al Jazeera reported, based on whistleblower complaints, that employees were pressured to boost customer numbers on the mobile app. In response, the RBI conducted a special audit on Bank of Baroda to investigate discrepancies in customer onboarding on the BoB World App. Unsatisfied with the results of the bank’s internal audit, the RBI, on Oct. 10, prohibited the onboarding of new customers onto the app until further notice.
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In the wake of the investigation, at least nine Bank of Baroda officers from the executive cadre have been suspended, primarily from branches in Gujarat. Regional heads suspected in the case have been temporarily reassigned as branch heads, while lower-level officers have been transferred to other branches. Over the past two months, the bank has conducted a thorough investigation into the case, scrutinizing branch-level data and individual accounts suspected of fraudulent mobile number linkage. The suspension of the officers is interim, with a final decision expected after the conclusion of a detailed investigation, likely within 3-6 months.
While the actions did not result in monetary losses for the bank or its customers, termination may not be the ultimate outcome.
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Cases like these, if widespread across banks, are attributed to technology loopholes that are often exploited. Rishi Agrawal, CEO and co-founder of TeamLease RegTech, emphasized the need for compliance in technology and improved fraud detection systems to prevent such incidents as financial services continue to grow.
