RBI ban on Bank of Baroda World app: Finance ministry’s likely plan on frauds

Union finance ministry might suggest stricter measures to guard residents from cyber fraud, it was reported. This comes after a rise in incidents of frauds, together with the Financial institution of Baroda World app rip-off, the Instances of India reported citing sources who “talked about a latest inter-ministerial assembly targeted on bolstering cybersecurity and tackling monetary fraud”, it famous.

What was RBI’s motion on Financial institution of Baroda World app?

In October 2023, the Reserve Financial institution of India (RBI) stopped Financial institution of Baroda from onboarding new clients on its cellular app ‘BoB World’ citing materials supervisory considerations. The financial institution mentioned in response that it had already carried out corrective measures to deal with the considerations.

“The Reserve Financial institution of India has, in train of its energy, beneath Part 35A of the Banking Regulation Act, 1949, directed Financial institution of Baroda to droop, with rapid impact, any additional onboarding of their clients onto the ‘bob World’ cellular utility,” RBI mentioned in an announcement.

“Any additional onboarding of consumers of the financial institution on the ‘bob World’ utility can be topic to rectification of the deficiencies noticed and strengthening of the associated processes by the financial institution to the satisfaction of RBI,” it added.

What report mentioned on steps Finance Ministry may take?

The report claimed that Finance ministry may very well be in assist of stricter Know Your Buyer (KYC) procedures and due diligence by banks and monetary establishments whereas onboarding new retailers. This is applicable to Enterprise Correspondents (BCs) as they might be extra susceptible to safety breaches, as per the report.

Moreover, the ministry’s proposal additionally stresses on the necessity for improved knowledge safety and knowledge safety practices on the service provider and Enterprise Correspondents degree. The report claimed that the RBI might ask banks to overview focus of Enterprise Correspondents in areas with a excessive incidence of cyber fraud.