Explain payments bank a/c issue by Dec 4: UIDAI to Airtel

Published On: 30, Nov 2017 | Source: business-standard.com

The has asked Airtel to explain, by December 4, why action should not be taken against it for allegedly opening payments accounts without "informed consent" of customers who went for Aadhaar-based mobile SIM verification.

Airtel, on its part, has refuted the allegations, saying all "Airtel Payments accounts are opened only after explicit consent from the customer". A company official added that Airtel is preparing to submit a detailed response to the Unique Identification Authority of (UIDAI) within the stipulated deadline.


The Aadhaar-issuing body, the UIDAI, had slapped notices on and Airtel Payments in this regard in September. A source said the company's initial reply was not satisfactory necessitating the need for seeking further explanation.

According to the source, has been given time till December 4 to explain why action should not be initiated against it, including imposition of penalty on the issue.

The official, who did not wish to be named, said that authority had found prima facie "wrongdoings" on the matter.

When contacted, CEO Ajay Bhushan Pandey said, "We have issued notice to a telecom operator and are awaiting their response. After giving full opportunity of hearing to the company concerned, we will take judicious view of the matter."

Pandey, however, did not identify the operator, saying the issue is under examination.

To an e-mail query by PTI, an Airtel spokesperson said the re-verification of mobile phones and the opening of Airtel payments account were separate transactions and not linked.

"Airtel Payments is fully compliant with all guidelines and follows a stringent customer on-boarding process," the Airtel spokesperson said.

He claimed that the consent for opening Airtel payments account as also Direct Benefit Transfer (DBT) is taken separately from all customers. The DBT amount is automatically credited to the most recent Aadhaar-linked account of a customer as per the applicable norms, the spokesperson added.

"If the Airtel payments account is the latest Aadhaar-linked account opened by a customer, the DBT automatically gets routed to it," Airtel said, adding that such subsidy credit is also brought to the attention of the customers through a message or automated call.

It may be recalled that the had shot off a notice to Airtel in September warning that not taking consent and informing the purpose of authentication was a violation of the Act and punishable with financial penalties.

In the notice served at that time, the had said it had come to know that "Airtel retailers are allegedly opening Airtel payments accounts at the time of performing e-KYC verification without informing the purpose of e-KYC and also without taking informed consent of the customer".

It also asked both and its payments entity to take immediate corrective measures and report back to the authority on the same.

The move came after complaints were made to the alleging that Airtel opened payments accounts without explicit consent of consumers and that the accounts were then linked for receiving LPG subsidy.

Airtel Payments was the first payments to go live in the country when it rolled out banking services from Rajasthan in November 2016.

Payments banks can accept deposits and savings deposits from individuals and small businesses, up to a maximum of Rs 1 lakh per account.