Airtel banned from e-KYC over opening unauthorised bank accounts

The Unique Identification Authority of India on Saturday prohibited Bharti Airtel and Airtel Payments Bank from conducting e-KYC (Know Your Customer) verification for existing and new customers, after allegations that Airtel was using the Aadhaar numbers given for SIM cards to open bank accounts in the names of customers without their consent.

Additionally, UIDAI also objected to allegations about such accounts being linked to receive LPG subsidies.

The UIDAI, in an interim order, ''suspended the e-KYC licence key of Bharti Airtel Ltd and Airtel Payment Bank Ltd with immediate effect'', it was reported.

The move means that Airtel will not be able to conduct e-verification or link customers' SIM to Aadhaar through e-KYC, which is an efficient, paperless means to link SIM cards with Aadhaar. Any customer that comes to Airtel or its payments bank for KYC purposes will have to submit a hard copy of their Aadhaar, or the other permissible identity documents, and these will need to be verified physically.

Under the government's orders, Aadhaar verification of mobile customers needs to be completed by 31 March.

An Airtel spokesperson said, "We can confirm that we have received an interim order from the UIDAI regarding temporary suspension of Aadhaar linked e-KYC services till their satisfaction on certain processes relating to Airtel payment banks onboarding of customers.

"We are engaging with the authority and are hopeful of an early resolution. We are also undertaking to complete the said actions on priority and have commenced thorough checks of our process flows.

"Being compliant to all guidelines is paramount to us. In the interim, any inconvenience to our customers is regretted."

The issue of unauthorised linkages had come to the fore when the government's subsidy on LPG or cooking gas landed in the Airtel Payments bank accounts of many customers who said they had never signed up for an Airtel Payments Bank account.

When UIDAI reviewed the Airtel mobile app, it  discovered that when the app is opened, along with the welcome message a pre-ticked consent box is  flashed for a short duration which mentions ''Upgrade or create my Airtel Payment Bank wallet using existing Airtel mobile KYC.''

This was found to reflect a blatant violation of Aadhaar Act and Regulations.

Unverified reports said the subsidy amount transferred in this manner was believed to be over Rs47 crore and the accounts linked without permission are estimated to be over 23 lakh in number.

The UIDAI has ordered Price Waterhouse to conduct an audit of Bharti Airtel and Airtel Payments Bank to ascertain if their systems and processes are in compliance with the Aadhaar Act.

The alleged actions of Airtel and Airtel Payments Bank were found to be in violation of different sections of the Aadhaar Act, 2016, which mandates obtaining explicit consent of the individual. Violations are liable to be punished with Rs1 lakh per day fine and termination of authentication user agreements.

Both Bharti Airtel and Airtel Payments Bank were appointed as Authentication User Agencies (AUA) by UIDAI and had entered into an agreement with UIDAI in February 2015 and September 2016 respectively for the purposes of availing authentication services provided by the authority.