The Reserve Bank of India‘s direction to Bank of Baroda to suspend onboarding of customers through its mobile application, bob World, is likely to impact the bank’s ability to sustain its liability growth, primarily CASA (current account, savings account) generation through onboarding of new salary accounts in urban and metro regions, according to India Ratings & Research (Ind-Ra).
The credit rating agency said about 98 per cent and 91 per cent of savings account (SA) and current account (CA) are being sourced digitally.
Moreover, 58 per cent of fixed deposits and 42 per cent of recurring deposits, which are being booked through bob World, are likely to be negatively impacted, it added.
However, in terms of assets, the impact would be limited as cross-selling for retail products (personal loans and credit cards) to existing bob World customers would be sufficient to meet growth requirements in the medium term.
Ind-Ra emphasised that the continuing of transactions through internet banking, tab banking and branch banking would remain unaffected.
The agency said it understands that BOB has already taken remedial measures and is awaiting a review of the measures taken by the RBI to resolve the issue.