Airtel Payments Bank Fined Rs 5 Crore for Violating Aadhaar Biometric KYC Rules
The Reserve Depository financial institution of India recently suspended Airtel Payments Bank's license for Aadhaar-based identity verification subsequently it was caught opening payments banking concern accounts for customers illegally. Now later hearing the payment bank's defense, the RBI has imposed a fine of ₹5 crores (₹50 1000000) for flouting norms regarding accounts opening and Know Your Customer (KYC) of customers.
The troubles for Airtel Payments Banking concern began back in November when after a series of complaints by users and news reports, the RBI discovered that the bank was opening accounts without the consent of users who linked Aadhaar with their mobile phones. The payments bank as well remitted these accounts of 23 lakh users with ₹47 crores in form of LPG subsidy. Following this, the primal bank suspended Airtel'due south license for Aadhaar linking temporarily. Meanwhile, KYC license of Airtel Payments Bank remains suspended and at that place is no information about when it volition be reinstated.
In January the RBI had likewise issued a observe to the Airtel Payments Banking company seeking clarity as to why it shouldn't be fined for its fraudulent activity. In February, with the aim of preventing such misuse of power in future, the RBI asked payments banks run by telecom operators to perform fresh KYC of all customers by engaging independent third-parties. This regulation was meant to make sure that payments banks such as the subsidiaries of Idea Cellular and Bharti Airtel comply with the national regulations confronting money laundering.
The regulation, yet, puts non-telco competitors ahead of Airtel which is one of the earliest payments banks in India. Other players in the segment include Paytm, Fino, and Republic of india Postal service Payments Bank. Meanwhile, Jio is preparing to launch its payments depository financial institution in collaboration with State Banking concern of Republic of india (SBI), the largest public sector bank in the country.
Before in the calendar week, the RBI had also imposed fines on SBI (₹forty lakhs), Axis Banking concern (₹3 crores), and Indian Overseas (₹ii crores) for violating KYC regulations.
Source: https://beebom.com/airtel-payments-bank-fined-5-crore-aadhaar/
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