The Reserve Bank of India (RBI) has asked Airtel Payments Bank to pay a fine of Rs. 5 crore for violating Know Your Customer (KYC) norms, said an official statement. The apex bank said that their action is based on deficiencies in regulatory compliance and it will not affect the validity of any transaction or agreement entered into by the bank with its customers.
"The Reserve Bank of India has imposed, on March 7, 2018, a monetary penalty of Rs. 50 million on Airtel Payments Bank Limited for contravening the 'Operating Guidelines for Payments Banks' and directions issued by RBI on Know Your Customer (KYC) norms," said the statement.
RBI looked into the complaints and media reports accusing the Airtel Payments Bank of opening customer accounts without a clear/specific consent of the customers. They also made a visit to the back between November 20 and November 22, 2017.
"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. 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 RBI."
"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," added the statement.
Shashi Arora, CEO and Managing Director, Airtel Payments Bank recently stepped stepped down from his position following the Unique Identification Authority of India (UIDAI) suspending Aadhaar linked e-KYC services on December 16 due to alleged misuse by the company.
The UIDAI's interim order had come after some customers of the telecom major claimed that the company had opened their bank account in Airtel Payments Bank when they used the Aadhaar linked e-KYC services without their consent.
Written with IANS inputs