Airtel Payments Bank has made a rather bold move of late, ending relationships with almost 1, 000 retailers for not following the right process in terms of customer sign-ups. This decision came after internal investigations were undertaken by Airtel Payments Bank, a division of the biggest telecommunications carrier in the country. This investigation aimed at finding out errors which led to the suspension of the license for e-KYC (Aadhar-based).
The company imposed penalties of close to 50 times of the commissions paid out to many retailers who were violating these guidelines for the very first time while repeat offenders were swiftly eliminated from the entire network along with having to pay up fines. Warnings have been issued to all retail partners against any violation of the proper guidelines. The internal investigation came after the Unique Identification Authority of India decided to suspend Airtel Payments Bank and Airtel from carrying out verification procedures for customers (Aadhar-based) after complaints regarding the usage of e-KYC Aadhar based SIM verification systems being used for setting up subscriber bank accounts without taking informed consent.
The internal probe unearthed that many retailers that were functioning as banking points, had not intimated their customers about the opening of savings accounts and the DBT (direct benefit transfer) receipts in a proper manner. Relationships have been ended in cases where there are multiple violations. The issue was highlighted after the oil ministry and companies claimed that Rs. 167 crore worth of LPG subsidies were deposited into Airtel Payments Bank accounts without customers having prior knowledge of the same.
UIDAI has also fined Airtel Payments Bank Rs. 2.5 crore although Bharti Airtel has now got the nod for taking up Aadhar-based e-KYC verification procedures for subscribers till the 10th of January, 2018, for enabling linkage of mobile SMSes with Aadhar as per Supreme Court guidelines. UIDAI has also directed the department of telecommunications, Reserve Bank of India and PricewaterhouseCoopers for holding audits of Airtel Payments Bank and Bharti Airtel for seeing whether all process, documents, systems and applications conform to regulatory norms. The reports should be available by the 10th of January, 2018. The e-KYC license still remains suspended for Airtel Payments Bank. Airtel Payments Bank commenced operations in January, 2017, offering all basic banking solutions with the exception of loans. Kotak Mahindra also has a stake of 20% in Airtel Payments Bank.