Finance Ministry takes steps to crack down on financial fraud

The Ministry of Finance recently banned Bank of Baroda’s World app after a series of incidents, including a scam. This is one of the steps the government has taken as part of a campaign to combat cybercrime.

The government has convened a meeting to discuss these issues, following the recent actions by RBIThe Times of India reported.

The Ministry of Finance has ordered banks and financial institutions to strictly enforce the know your customer (KYC) process when onboarding new businesses, as per the report. This applies particularly to business correspondents as they are more vulnerable to security breaches.

The ministry’s proposal emphasizes better data security and data protection measures at the level of businesses and business correspondents. Further, the report suggested that the RBI may instruct banks to review business correspondence in sectors with more incidents of cyber fraud.

Back in October 2023, the Reserve Bank of India (RBI) had referred to material supervisory concerns and prevented Bank of Baroda from enrolling new customers on its mobile app BoB World.

“The Reserve Bank of India has, in exercise of its power, under Section 35A of the Banking Regulation Act, 1949, directed the Bank of Baroda to suspend, with immediate effect, any further onboarding of their customers onto the ‘bob World’ mobile application ,” RBI had said.

“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 was added.