RBI fines Airtel Payments Bank Rs 50 million for KYC norms breach

The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 50 million on Airtel Payments Bank for breaching payment bank guidelines and Know Your Customer (KYC) norms.

The central bank made by a supervisory visit to the payments bank between November 20 and 22, wherein it was concluded that there were deficiencies in the payment bank’s regulatory compliance. Following which, the RBI sent a show cause notice to Airtel Payments Bank on January 15, 2018.

This visit was due to complaints and adverse media reports alleging that “the bank had opened customer accounts without a clear or specific consent of the customers”, said the RBI in a statement.

The Unique Identification Authority of India (UIDAI) had slapped notices on Bharti Airtel and Airtel Payments Bank in September 2017, for using the Aadhaar-eKYC based SIM verification process for opening payments bank accounts of subscribers without their “informed consent”. In December 2017, UIDAI had also temporarily barred the two entities from conducting KYC verification and later instructed payments banks to complete the customer KYC verification process independently of their telecom partners, through third parties.

The RBI also fined State Bank of India, Axis Bank and Indian Overseas Bank this week, for non-compliance of directions on detection and impounding of counterfeit notes, non performing asset(NPA) norms and KYC regulations respectively.

The central bank said that the fine was due to the bank’s failure to adhere to the guidelines/directions issued by RBI and not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.