For breaking the Know Your Customer (KYC) while opening bank accounts, Airtel Payments Bank has been slapped with a monetary penalty of Rs 50 million by India’s apex bank, Reserve Bank of India (RBI).
RBI while imposing the penalty said that Airtel Payments Bank have not complied with the ‘Operating Guidelines for Payments Banks’ and directions issued by RBI on KYC norms. Thus the penalty has been imposed taking into account failure of the bank to adhere to the guidelines or direction issued by RBI.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” RBI said in a statement.
RBI took the matter into consideration based on the complaints it received and media reports alleging that Airtel Payments Bank had opened customer accounts without a clear/specific consent of the customers. According to media reports, Airtel Payment Bank opened banking accounts for its customers when they tried to re-verify their Airtel SIM via Aadhaar. So they utilized this opportunity to on-board customers into their banks.
Based on the above matter, a supervisory visit to the bank was undertaken by RBI between November 20 and 22, 2017. “The supervisory visit report and other relevant documents, revealed, inter alia, contraventions of ‘Operating Guidelines for Payments Banks’ and the directions issued by RBI on Know Your Customer (KYC) norms“. Based on this documents, RBI issued a notice to Airtel Payments Bank on 15th January 2018, as to why the penalty should not be imposed for non-compliance with RBI guidelines and directions.
“After bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI guidelines/directions were substantiated and warranted imposition of a monetary penalty” the statement added.
UIDAI the epic body behind Aadhaar earlier suspended Airtel from using Aadhaar e-KYC for SIM card and Payments Bank account verification. Later, the authority allowed Airtel to re-verify its telecom customers SIM cards. However, it has not yet released the eKYC license for Airtel Payments Bank.