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RBI Penalises Airtel Payments Bank Limited For Violating KYC Norm

Airtel Payments Bank Limited has been levied a penalty of INR 5 crore by the Reserve Bank of India (RBI) for the violation of Know Your Customer (KYC) norms that there has been a deficiency in regulatory compliance. The RBI imposed the monetary fine of INR 5 crore holding the Airtel Payments Bank Limited guilty of violating the 'Operating Guidelines for Payments Banks' and the directions which RBI issued on KYC norms.
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Airtel Payments Bank Limited has been levied a penalty of INR 5 crore by the Reserve Bank of India (RBI) for the violation of Know Your Customer (KYC) norms that there has been a deficiency in regulatory compliance. The RBI imposed the monetary fine of INR 5 crore holding the Airtel Payments Bank Limited guilty of violating the ‘Operating Guidelines for Payments Banks’ and the directions which RBI issued on KYC norms.
The RBI has also assured the customers that it is just a matter of regulatory compliance violation, and does not effect on the validity of any transaction or agreement entered into by the customers with the bank. The apex bank stated that on a supervisory visit undertaken between November 20th and 22nd 2017, it was reported that the Airtel Payments Bank had opened customer accounts without a specific and clear consent of the customer which violated the ‘Operating Guidelines for Payments Banks’ regarding KYC norms issued by the RBI. It also issued a notice to the Airtel Payment Bank to show cause in defense of the accusation on January 15th, 2018, giving a proper chance for a fair hearing.
The RBI after the show cause and reply from the bank, based on the documents and oral submissions made on the event of personal hearing, came to the conclusion that the aforesaid charges of non-compliance with the guidelines issued by RBI should be substantiated and warranted the imposition of monetary policy.
Earlier on December 22nd, 2017, Shashi Arora, CEO and Managing Director, Airtel Payments Bank has stepped down following the Unique Identification Authority of India (UIDAI) which suspended the Aadhaar linked e-KYC service on alleged misuse by the company.
Based on the allegation by some of the customers, the UIDAI issued an interim order that the company had opened their bank account in Airtel Payment Bank without their consent when they used the Aadhaar linked e-KYC service, as the Aadhaar KYC service by UIDAI provides all the details of the customer including non-repudiable proof of identity, address proof, date of birth and gender, mobile number and email address to the service provider instantly.

 

 

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Reviewed by:
Rashmita Das
Published on 10th Mar, 2018
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