The RBI governor, Shaktikanta Das, has been urged by a civil society platform to implement an information security (IS) audit mechanism for banks that have mobile banking apps, and asked banks detect any malpractices, such as substitution of biometric details of customers at the time of account opening.

“We now intent to convey our concerns about the recent expose that has vindicated an apprehension that the drive Initiated by various banks to onboard customers on mobile banking app through business correspondents as well as employee; has resulted in customers losing substantial amounts through frauds perpetrated by fraudsters. We strongly feel by such drives Initiated by various banks to achieve impossible targets set for the branch level functionaries on any banking channel activity viz.selling of third party products, opening of current accounts, onboarding customers for mobile banking app et al, often leads to Irregular and unlawful acts perpetrated by branchlevel functionaries for which the authorities turn a blind eye to as long as the numbers are achieved. It is Indeed a matter of consternation that the banks are breaching basic fulugary responsibilties are supposed to uphold all the time,” said Bank Bachao Desh Bachao Manch in its October 14, 2023 letter to the RBI.

According to Bachao Desh Bachao Manch’s social media account, X, it is a civil society platform to mobilise public opinion against Bank Privatisation and also to take up social causes.

“We feel that the number of such irregularities that have surfaced in the BoB World app scam is just the tip of the iceberg. The actual scam could be a humongous scale,” it stated.

In its letter Bank Bachao Desh Bachao Manch suggested the following, which if adopted peremptorily, could arrest such frauds to a large extent.

Appointment of independent information security auditors to undertake in-depth investigations in all banks using mobile banking apps in order to unearth facts, so that the entire sector becomes attentive to the safety of clients’ savings.

Instructions will be issued to all banks not to establish such targets on branch functionaries, which could lead to the adoption of unethical practises in order to please the authorities.

All banks have been instructed to investigate the operations of business correspondents in order to uncover any malpractices, such as the substitution of biometric details of consumers when creating accounts.

Surveillance of customer service kiosks.

Earlier in September, this forum had expressed worries about the frauds occurring through the Aadhaar Enabled Payment System (AEPS) and urged the RBI to initiate some preventive measures to protect depositors’ interests and their hard-earned savings.

In the September letter they stated, “We strongly feel by such drives Initiated by various banks to achieve impossible targets set for the branch level functionaries on any banking channel activity viz. selling of third party products, opening of current accounts, onboarding customers for mobile banking app et al, often leads to Irregular and unlawful acts perpetrated by branch level functionaries for which the authorities turn a blind eye to as long as the numbers are achieved.

RBI bars Bank of Baroda from onboarding new customers on BoB World app

The RBI has directed Bank of Baroda to suspend any further onboarding of their customers onto the ‘bob World’ mobile banking application. This direction to BoB from the RBI is with immediate effect. This action is based on certain material supervisory concerns observed in the manner of onboarding of their customers onto this mobile application, as per RBI’s press release from October 10, 2023.

Added to this, it has now been alleged that a few agents of the bank have stolen lakhs of rupees from many customer accounts. According to an Al Jazeera news report from October 12, 2023, “The audits come after an expose by The Reporters’ Collective (TRC) and Al Jazeera, which showed the bank’s employees had linked unauthorised mobile numbers to customer accounts that were missing a registered mobile number to onboard them on the bank’s new mobile banking app, bob World. These unauthorised mobile numbers to customer accounts that were missing a registered mobile number to onboard them on the bank’s new mobile banking app, bob World. These unauthorised mobile numbers were of bank staff, managers, guards, their relatives and bank agents in remote areas.”

The Al Jazeera news report stated that these agents stole Rs 22 lakh (Rs 2.2 million) from 362 customers, “internal audit reports and records of the bank have revealed”.

Source : https://economictimes.indiatimes.com/wealth/personal-finance-news/bob-world-app-scam-could-be-tip-of-iceberg-rbi-should-appoint-it-auditors-in-banks-forum/articleshow/104499561.cms