Moneycontrol
Last Updated : Mar 09, 2018 07:03 PM IST | Source: Moneycontrol.com

RBI fines Airtel Payments Bank Rs 5 crore for violation of KYC norms

More than 23 lakh customers reportedly received Rs 47 crore in their Airtel payments bank accounts, which they did not know had been opened.

Beena Parmar @BeenaParmar
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Sunil Mittal-owned Airtel Payments Bank has been fined of Rs 5 crore by Reserve Bank of India (RBI) for breaching Know Your Customer (KYC) norms.

The central bank said that a "monetary penalty of Rs 50 million has been imposed on Airtel Payments Bank Limited for contravening the Operating Guidelines for Payments Banks and directions issued by RBI on KYC."

Earlier this week, RBI had fined three other banks — State Bank of India (Rs 40 lakh), Axis Bank (Rs 3 crore) and Indian Overseas Bank (Rs 2 crore) — for non-compliance of RBI norms relating to detection and reporting of counterfeit notes, classification of non-performing assets (NPAs) and violation of KYC norms, respectively.

In December 2017, it was learnt that Bharti Airtel had been using the Aadhaar-eKYC based SIM verification process to open its payments bank accounts of subscribers without their "informed consent".

According to reports, more than 23 lakh customers had reportedly received Rs 47 crore in their Airtel bank accounts, which they did not know had been opened.

Based on complaints and adverse media reports alleging that the bank had opened customer accounts without a clear/specific consent of the customers, a supervisory visit to the bank was undertaken by RBI between November 20 and 22, 2017, the banking regulator said on its website.

It added that 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 KYC norms.

UIDAI had also taken strong objection to the allegations as such payments bank accounts are being linked to receive LPG subsidy granted by the government.

Following the incident, in an interim order, the UIDAI had suspended e-KYC licence key of Bharti Airtel Ltd and Airtel Payment Bank Ltd.

Airtel Payments Bank had, however, maintained that no bank account was opened without the consent of the customers.

Giving the background, RBI said that based on the documents, a Notice dated January 15, 2018 was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with guidelines and directions issued by the central bank.

“After considering the 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 monetary penalty,” it said.

Uday Kotak-led Kotak Mahindra Bank has 19.9 percent stake in Airtel Payments Bank.
First Published on Mar 9, 2018 07:01 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant