The Bank of Baroda World App has been at the center of a controversy involving fraudulent manipulation and operational issues. It all started with a reward system where Bank of Baroda branches would receive a daily budget of Rs 500 for a cake if they activated 30 connections on the app. The reward would increase to Rs 1,000 if a region completed 1,500 daily activations.
However, what began as a harmless celebration soon turned into a mess. The bank’s Managing Director and Chief Executive Officer, Debadatta Chand, openly called out the former Chief Digital Officer, Akhil Handa, during a conference call. Chand claimed that Handa’s exit from the bank was a termination of services due to irregularities found in the BoB World app case. Handa, on the other hand, stated that he had resigned on his own and shared a screenshot of his resignation letter as proof.
According to anonymous sources, the app had security vulnerabilities that allowed employees and third-party workers to exploit the system for personal gain. The app’s flaw allowed one mobile number to be registered with multiple bank accounts, leading to fraudulent activities. Additionally, leaked dynamic one-time passwords also contributed to fraudulent transactions.
The bank issued an internal circular acknowledging the fraudulent activities and taking steps to rectify the situation. However, it was revealed that certain regional offices set targets for app activations and rewarded employees and business correspondents with cake celebrations. This incentive-driven system further incentivized manipulation and misuse of the app.
As a result of the controversy, the RBI ordered the bank to block further customer onboarding on the app. The bank has also taken internal actions, including the suspension of employees and investigations into the matter. While the bank claims there will be no material impact on its financials, the reputational damage caused by the incident is significant.
The incident raises concerns about the trustworthiness of banking apps and the overall credibility of digital banking. If customers cannot trust a bank app, the foundation of digital banking is called into question.
