In India, a recent internal audit of the Bank of Baroda has revealed that agents misappropriated approximately 2.2 million rupees ($27,000) from 362 customer accounts. This discovery followed an investigation by The Reporters’ Collective (TRC) and Al Jazeera, which found that bank employees had linked unauthorized mobile numbers to customer accounts to register them on the bank’s mobile banking app, bob World.
These unauthorized numbers belonged to bank staff, managers, security guards, their relatives, and bank agents, especially in remote areas. Internal communications within the bank had previously acknowledged the potential for fraud in this practice.
The fraudulent activities involved business correspondents (agents of the bank) making unauthorized withdrawals from customer accounts using mobile banking. Some customers lost significant amounts of money, with one agent alone stealing more than 390,000 rupees ($4,750). The bank’s head office has directed concerned managers to take action to recover and restore the money to customer accounts.
The Reserve Bank of India (RBI) ordered an audit following the initial exposé. Subsequently, the RBI directed the Bank of Baroda to halt new customer registrations on the bob World app due to supervisory concerns.
During a nationwide audit, Bank of Baroda verified about 422,000 accounts suspected of wrongful registration on the app. This audit, conducted by branch staff across nearly 7,000 branches, revealed significant discrepancies and improper practices.
Some bank employees alleged that the audit focused more on covering up wrongdoings rather than genuinely identifying them, with documents being arranged or forged under instructions from regional offices. Experts in bank auditing and forensic accounting criticized the decision to have branch staff conduct the audit, suggesting that it should have been outsourced for impartiality.
The internal auditors were tasked with finding specific documents, such as bob World request letters and forms for changing linked mobile numbers. Many of these documents were reportedly missing, and audit reports showed serious gaps and irregularities.
Key findings included:
- Only a third of the accounts under investigation had the required bob World request letters.
- Many accounts were linked to mobile numbers of bank employees or business correspondents.
- Violations of the bank’s policy, which states that one mobile number can be linked with a maximum of eight bank accounts belonging to the same family, were common.
The Bank of Baroda’s Chief General Manager, B Elango, acknowledged the audit findings and emphasized the need to rectify the irregularities promptly. The bank has been instructed to contact customers for missing documents.
However, reports suggest that some regional offices encouraged the forgery of documents as part of damage control efforts. Employees from various states reported creating or altering documents, including obtaining signatures or thumbprints from customers after their accounts had already been registered on the app.
The audit process also uncovered that many accounts registered on the app belonged to illiterate customers or minors, who are ineligible for the app. Moreover, many accounts scrutinized for app enrollment were opened under the Pradhan Mantri Jan Dhan Yojana, a scheme aimed at linking the poor to the banking system.
The Bank of Baroda has not responded to queries about the internal audit and its findings, and the RBI has also not commented on its course of action regarding the matter.
Stay informed on supply chain news at The Supply Chain Report. Free international trade tools are at ADAMftd.com.
#BankOfBaroda #InternalAudit #bobWorld #MobileBankingFraud #RBI #FraudulentActivities #BusinessCorrespondents #BankingScam #CustomerAccounts #UnauthorizedWithdrawals #FinancialRegulation #DigitalBankingIssues #IndiaBanking #BankingSecurity #AuditInvestigation #PradhanMantriJanDhanYojana #ForgeryConcerns #FinancialMismanagement #BankingIrregularities #RBIAction #BankAudit #ForensicAccounting
