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Business News/ Industry / Banking/  A war of words over BoB's mobile app fiasco
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A war of words over BoB's mobile app fiasco

CEO Debadatta Chand says CDO Akhil Handa was dismissed; Handa says he quit on his own

On 12 October, RBI barred BoB from onboarding new customers through the app until its deficiencies were rectified and processes strengthened. (Mint)Premium
On 12 October, RBI barred BoB from onboarding new customers through the app until its deficiencies were rectified and processes strengthened. (Mint)

A verbal spat broke out between the Bank of Baroda (BoB) management and its former chief digital officer (CDO) over the weekend around irregularities in signing up customers through its mobile banking app bob World.

On 12 October, the Reserve Bank of India (RBI) barred BoB from onboarding new customers through the app until its deficiencies were rectified and processes strengthened.

Chief executive officer (CEO) and managing director (MD) Debadatta Chand said on Saturday that the bank had terminated the contract of its CDO, Akhil Handa, as part of a wider action against employees both at the branch and corporate office levels. Handa, meanwhile, claimed that he had resigned on personal grounds, and the bank was just “deflecting from its operational lapses" by saying it had terminated his contract.

“We have taken action on a large set of people on the field. As far as the (erstwhile) CDO is concerned, it is a cessation of service induced by the bank, and that is a termination," Chand said.

The bank’s stock exchange notification on 31 October described Handa’s exit as “cessation of employment" as head of the digital lending business but did not call it a termination.

To this, Handa clarified on Saturday that his exit was a personal decision and he had served a three-month notice period since August. Mint has seen a copy of his resignation letter marked to the bank’s human resources department dated 9 August.

“The narrative of termination seems a deflection of operational lapses at the branch level issues," Handa wrote in a mail to Mint. “Mobile banking onboarding process is controlled by the operations department methodology that requires mobile number seeding. The mobile number seeding is a pure branch-level process governed by the maker and checker process at the branch office level. The bob World application has no issues and is, in fact, ranked within the top mobile banking apps in India," he added.

CEO Chand on Saturday also said that the RBI’s concerns were largely related to the customer onboarding process through the app and that there were gaps in adequacies in documents along with wrong data being fed.

BoB is engaged with the RBI on multiple counts in connection with issues linked to the mobile application, Chand said, adding that the bank has internally strengthened its surveillance and vigilance mechanism.

According to the management, less than 3% of accounts are being opened via bob World. It expects business as usual for deposit growth since there are other channels that are working strongly.

According to BoB’s FY23 annual report, the bank added 20 million customers on to bob World platform over a period of two years , fiscal 2022 and fiscal 2023, taking the total count to 30 million.

The issue of alleged irregularities in onboarding came to light in July when an Al Jazeera report said bank officials linked bank accounts to unrelated mobile numbers in order to achieve stiff onboarding targets. The report cited internal emails from the bank to state that branches were asked to conduct a “discreet inquiry" into the issue and to recommend whether those mobile numbers should be withdrawn from those accounts.

“We believe the RBI’s embargo on bob World will have limited impact on the business but would still inflict some damage on customer and investor sentiment," said Anand Dama, head of BFSI, Emkay Global Financial Services.

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ABOUT THE AUTHOR
Gopika Gopakumar
Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
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Published: 05 Nov 2023, 11:54 PM IST
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