RBI imposes 5 Cr fine on Airtel Payments Bank

Airtel Payments Bank has been faced with violation charges with The Reserve Bank of India (RBI) imposing a penalty of Rs 5 crore for flouting operating guidelines and know your customer (KYC) norms. Seen as one of the biggest penalties imposed by RBI, the regulator has fined Sunil Mittal-led digital payment bank under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.

RBI had conducted a supervisory visit to the bank from 20-22 November 2017 and issued a show cause notice to the digital payment bank on 15 January.In December 2017, it was reported that Bharti Airtel has been using Aadhaar-based eKYC SIM verification process to open new accounts with its Airtel Payments Bank with the consent of its users.

Over 2.3 million customers have reportedly received about Rs 47 crore in their Airtel bank accounts, which they did not know had been opened. The cellular major has allegedly been linking payments bank account to receive LPG subsidy.Earlier, UIDAI has taken stringent action and suspended e-KYC license key of Bharti Airtel and Airtel Payments Bank with immediate effect on the payment bank having breached KYC norms. 

Following the incident, UIDAI had asked the apex banking body, Department of Telecom (DoT) and audit and consultancy firm PricewaterhouseCoopers to conduct an audit to ascertain if Airtel’s systems and processes are in compliance with the Aadhaar Act or not.

Tags: RBI, reserve bank of india, rbi fine Airtel Payments Bank, airtel payments bank, kyc, digital payment bank, Bharti Airtel, UIDAI, varindia