Recent developments revealed that India’s Bank of Baroda made it simple and easy for its agents to steal money from the accounts of its customers.
Bob Agents Steal Customers Money From Their Accounts
Internal audit reports and records of the bank have revealed that some of the agents did steal 2.2 million rupees ($27,000) from 362 customers.
The scandal came to light after an expose by The Reporters’ Collective (TRC) and Al Jazeera, which showed the bank’s employees had linked unauthorized 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.
It gets interesting as these unauthorized mobile numbers were of bank staff, managers, guards, their relatives and bank agents in remote areas.
In this story, they warned that the bank’s underhand tactics, devised under pressure to boost registrations on its app, could lead to identity theft and pose a grave risk to the money of customers.
Last year, the bank admitted this in its internal emails saying “It is a fraud-prone area,” multiple emails about the bogus mobile numbers noted.
How Did This Happen?
In the latest development, the internal documents of the bank’s head office acknowledge this malpractice now further showing that the bank’s agents, called business correspondents, have withdrawn tens of thousands of rupees from customers’ accounts by using mobile banking.
To be specific, Six customers have lost upwards of 110,000 rupees ($1,330) each, whereas one lost almost 177,000 rupees ($2,140).
This also revealed that one of the agents stole more than 390,000 rupees ($4,750).
In response to this revelation, the bank’s head office has asked the managers concerned to “initiate necessary action for recovery and restoration of money in customer accounts”.
There is also the admission of fraud that happened after the Reserve Bank of India (RBI), the country’s central bank, ordered an audit following The Reporters’ Collective-Al Jazeera investigation.
RBI Banned Bob In Registering New Customers
This Tuesday, the RBI said that it has directed the Bank of Baroda to stop registering new customers on bob World because of “certain material supervisory concerns observed in the manner of onboarding of their customers onto this mobile application”.
So far, the Bank of Baroda verified documents of about 422,000 accounts that were suspected to be wrongfully registered on the app by the bank staff, in its nationwide audit.
This was done by the bank’s branch staff as they audited these accounts spread over nearly 7,000 branches across the country on July 29 and 30, with each employee auditing documents of another branch.
Its final audit reports have duly pointed out discrepancies, indicating proper scrutiny at a higher level.
Further, these reports established the shoddy nature of the internal audit.
It appears that this audit was not so much about detecting wrongdoing as about covering it up as Many bank employees told The Reporters’ Collective (TRC).
Further adding that under instructions from their regional office, they arranged and forged documents for the audit.
“The bank knows it’s in the wrong [with regard to bob World enrolment]. Now, it is in damage-control mode,” said One such employee, who himself procured documents from customers.
According to experts from the field of bank auditing and forensic accounting, the Bank of Baroda should not have deputed its branch staff for the audit in the first place.
In fact, this task should have been outsourced for a fair investigation.
In this audit, Bob asked its internal auditors to mainly look for Bob World request letters that show customers requested the online app service on their phones, and forms that customers signed to change mobile numbers linked with their accounts.
Since the presence of these forms is the proof that bank staff did not perform the fraudulent workaround to flog the app.
Interestingly, the documents were not found in most of the cases as per the audit reports accessed by TRC show.
There is a serious gap as Audit reports of eight regions found Bob World request letters for barely one-third of the bank accounts under investigation.
