Bank Of Baroda Share Price Sheds 4% After RBI Suspends Onboarding Of New Customers On Its bob World App

Leading public sector lender, Bank of Baroda faced intense selling pressure on Wednesday after the Reserve Bank of India (RBI) directed the bank to stop onboarding new customers onto its bob World mobile application. The share price of the bank has nosedived by nearly 4% on BSE.

In the early deals, Bank of Baroda shares touched an intraday low of Rs 206.25 apiece, down by 3.7% on BSE. At the time of writing, BoB shares have dipped by nearly 3.2% to trade near the day's low to Rs 207.40 apiece. Its market cap stood over Rs 1.07 lakh crore.

In a circular on Tuesday, RBI said, "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."

This action is based on certain material supervisory concerns observed in the manner of onboarding their customers onto this mobile application.

RBI added, "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."

Also, the central bank further directed BoB to ensure that already onboarded 'Bob World' customers do not face any disruption on account of this suspension.

Right after RBI's direction, Bank of Baroda also gave its statement in an exchange filing.

Bob said, "While 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 bank assured its existing customers that they will not face any disruption whatsoever and will continue to enjoy uninterrupted services on the Bank's Bob World mobile app.

Further, the bank said, "This order does not impact any of the Bank's other Digital Banking channels such as Net Banking, WhatsApp Banking, Debit Cards, ATMs, etc. for servicing its existing customers as well as for onboarding of new customers."

Apart from this, BoB also tried to reassure its customers by saying, "Our Bank's Mobile Banking application is fully secure with robust security controls and features." It added, "The Bank has always endeavoured to provide seamless digital banking services to its customers and over the last few years, the Bank has made significant investments in technology, which provides customers with a seamless and secure banking experience, with robust controls and security features."

"We do not expect this action to have a material impact on the Bank's overall business and growth plans. We reaffirm our commitment in providing our customers with the best banking products, services and experience," BoB said in its filing.

Bank of Baroda's bob World application was launched to provide an all-inclusive and seamless virtual banking experience encompassing all its digital banking services under one roof for the convenience of its customers. The platform was designed to offer a wide gamut of banking products and services, to be rolled out in phases, under its four key pillars of Save, Invest, Borrow, and Shop.

More than 220 services were converged into this one single app, covering nearly 95% of all retail banking service offerings, which was also allowed to be accessed by customers, both, domestically and globally. The pilot launch of bob World was done in August 2021, followed by an official launch at full-scale in September of the same year.