Bank of Baroda is banned by RBI Global app: The Finance Ministry may use this strategy to combat fraud

According to reports, the Finance Ministry is suggesting more stringent measures to shield people from online fraud. This follows a wave of occurrences, such as the most recent Bank of Baroda World app fraud.

These actions are purportedly part of a larger national effort to fight cybercrime. The sources brought up a recent interministerial conference that aimed to combat financial crime and strengthen cybersecurity.
The numbers highlight how urgent it is to take action.

The National Crime Records Bureau of India recorded more than 1.1 million incidents of cyber fraud in 2023 alone, with a total value of an astounding Rs 7,488.63 crore ($8.9 billion). The Indian Cyber Crime Coordination Centre (I4C) was established by the Ministry of Home Affairs in response to this increasing menace. The national effort to fight all forms of cybercrime is coordinated by this single institution.
Examine the business correspondents of the Bank
According to reports, the government is pushing for banks and other financial institutions to onboard new merchants with more extensive due diligence and stronger Know Your Customer (KYC) protocols. Business correspondents (BCs) in particular should be aware of this, as they may be more susceptible to security lapses. For those who do not know, BCs are bank agents that assist villages in opening bank accounts. The bank pays commission to business correspondents for each new account opened, transaction completed via them, loan application handled, etc.

Increasing Data Security at the Retailer Level
The need of better data security and protection procedures at the merchant and BC levels is emphasised in the proposal. This is due to the possibility that cybercriminals may take advantage of these regions’ flaws.
RBI Might Target Hotspots for Fraud, Including Micro ATMs
According to the sources, banks should reconsider the concentration of BCs in regions where cyber fraud is common. This recommendation might come from the Reserve Bank of India (RBI). The RBI can also suggest more stringent onboarding guidelines for BCs and perhaps ban micro ATMs linked to fraudulent conduct.
Bank of Baroda World app is banned by RBI
Due to serious regulatory concerns, the Reserve Bank of India (RBI) prohibited state-owned Bank of Baroda from onboarding new users on its mobile app, BoB World, in October 2023. In response to the RBI’s directives, the BoB said that it has already taken remedial action to address the central bank’s concerns and has started further actions to close any gaps that remain.
“The Reserve Bank of India has, 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,” the RBI said in a statement.
The RBI said that the move is based on specific, significant supervisory issues seen in the way their consumers were onboarded onto this mobile application. “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,” it said.