Rs 2,335 cr penalty on telcos for violating KYC norms

Over 5 per cent of 7.84 crore Customer Acquisition Forms were found non-compliant during verification process as on September 2016, and a penalty of Rs 2,335.9 crore was imposed on erring telecom operators for violating verification norms, Parliament was informed today.
"As on September 30, 2016, out of total 7.84 crore CAFs audited, a total of 43.20 lakh CAFs were found non-compliant by TERM (Telecom Enforcement, Resource and Monitoring) Cells during such CAF verification process and a total financial penalty of Rs 2,335.90 crore has been imposed on erring TSPs for violation of CAF verification norms," Communications Minister Manoj Sinha said in a written reply to the Lok Sabha.

Telecom operators are mandated to verify all the customers as per prescribed Know Your Customer (KYC) norms, before enrolling them.
In order to ensure adherence by all the service providers in carrying out verification as per prescribed norms, TERM Cells carry out sample verification of CAFs of 0.1 per cent of all customers available in the system at the end of each month.
"The sample size in respect of J&K, North East and Assam Service Areas is 0.2 per cent on quarterly basis. In case a CAF is found non-compliant, penalty is imposed for each failed CAF ranging from Rs 1,000 to Rs 50,000 per CAF based on the CAF failure rate. The non-compliance report is also shared with TSPs for corrective actions," the Minister said.

This process of CAF verification is carried out by TERM cells on monthly basis since April 2007.

"The 100 per cent verification is mandated to be done by the TSPs, and TERM Cell carry out physical sample verification of prescribed sample size of all the customers available in the system at the end of each month, which is good enough size to represent the whole population," the Minister said.
Since the verification of mobile customers is carried out by the telecom service provider as and when customer is acquired and the TERM cell carry out the verification of prescribed sample size every month, thus customer verification for mobile connection is a continuous process, he pointed out.

As per the data, the total number of non compliant CAFs as on September 2016 stood at 63,691 for Assam, 51,957 for Jammu and Kashmir, and 26,830 for the North East.