The Reserve Bank of India (RBI) has slapped a penalty of INR 50 million on Airtel Payments Bank for violating know your customer (KYC) norms.
RBI imposed, on March 7, 2018, a penalty of INR 50 million on Airtel Payments Bank for contravening the operating guidelines for payments banks and directions issued by RBI on Know Your Customer (KYC) norms, a statement said.
The apex bank said that 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 made a supervisory visit to the Airtel Payments bank between November 20 and 22, 2017 following complaints alleging that the Airtel Payments Bank opened customer accounts without a clear/specific consent of the customers.
Based on the documents, RBI issued a notice dated January 15, 2018 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 RBI.
After considering the bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the charges of non-compliance with RBI guidelines/directions were substantiated and warranted imposition of monetary penalty.
Earlier, Shashi Arora, CEO and managing director of Airtel Payments Bank has stepped down on December 22 following the Unique Identification Authority of India (UIDAI) suspending Aadhaar linked e-KYC services on December 16 because of alleged misuse by the company.
The UIDAI’s interim order had come after some customers of the telecom major alleged that the company had opened their bank account in Airtel Payments Bank when they used the Aadhaar linked e-KYC services without their consent.