Airtel Payment Bank penalised for breaching KYC norms
09 March 2018
The Reserve Bank of India has imposed a penalty of Rs5 crore on Airtel Payments Bank for breaching Know Your Customer (KYC) norms.
According to the apex bank, a monetary penalty of Rs 50 million (Rs5 crore) has been imposed on Airtel Payments Bank Limited for ''contravening the Operating Guidelines for Payments Banks and directions issued by the RBI on KYC.
On 16 December the UIDAI had 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 (See: Airtel banned from e-KYC over opening unauthorised bank accounts).
On 15 January, RBI had issued a show cause notice to the Sunil Mittal-promoted Airtel Payment Bank asking it to explain why the penalty should not be imposed on it after a supervision report found it contravening the Operating Guidelines for Payments Banks.
The penalty on Airtel Payments Bank is being imposed based on complaints alleging that the bank had opened customer accounts without a clear or specific consent of the customers, the RBI said in a statement on Friday.
Airtel Payments Bank, however, maintained that no bank account was opened without the consent of the customers. A company spokesperson in December had said that the company has issued new instructions and urged customers to remain careful while completing their KYC processes.
Earlier on Wednesday, the RBI had also imposed penalised State Bank of India, Axis Bank and Indian Overseas Bank for non-compliance (See: RBI penalises Axis Bank, IOB for violating NPA, KYC norms).
It had imposed a penalty of Rs40 lakh on SBI for non-compliance with the directions issued by RBI on Detection and Impounding of Counterfeit Notes.
A penalty was imposed Axis Bank for being in violation of many regulations in the assessment of non-performing assets (NPAs) and on IOB for a fraud that was detected at one of its branches.