"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," the 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.
The RBI further said cased on the complaints and media reports alleging that the Airtel Payments Bank had opened customer accounts without a clear/specific consent of the customers, a supervisory visit to the bank was undertaken by RBI between November 20 and 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," the statement added.
Earlier, Shashi Arora, CEO and Managing Director, 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.
The "Aadhaar linked e-KYC" service of UIDAI provides an instant, electronic, non-repudiable proof of identity and proof of address along with date of birth and gender, resident's mobile number and email address to the service provider.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)