UIDAI, the nodal authority for Aadhaar, has been receiving complaints that Airtel has opened payment bank accounts in their names without consent.

UIDAI suspends Airtel Airtel Payments Banks eKYC license for flouting Aadhaar rulesImage source: Andrew Currie via Flickr
Atom Aadhar Monday, December 18, 2017 - 21:27

Leading Indian Telecom player Airtel is in trouble with the way it handled the e-KYC license issued for verifications of their mobile phone customers. The company obtained a license to operate a Payments Bank and the charge against Airtel is that they used the e-KYC verification process for the mobile connection to automatically apply to the opening of a bank account in the customers’ names, reports NDTV Gadgets.

UIDAI, the nodal authority controlling the issue and use of Aadhaar has been receiving complaints from the public that Airtel has opened accounts in their names without taking their consent. It did not stop at that. These accounts also started to receive their cooking gas (LPG) subsidy into this Airtel Payments Bank account instead of the account they had designated with the oil marketing companies. The figures being quoted are, 23 lakh customers with Rs 47 crore. This is quite huge by any reckoning.

The UIDAI took this stern step of barring both Airtel and its Payments Bank from conducting the e-KYC verifications of its customers.

This practically means that Airtel cannot verify its new customers’ personal details using the Aadhaar card route. They may have to revert to the conventional method of physical verification before activating the SIM cards. Similarly, the Airtel Payments Bank has to find alternate methods of doing the KYC (know your customer) exercise before opening accounts of customers till it is able to sort out the issue with the UIDAI.

The penalty will be based on the number of days for which the rules were violated and could run upwards of Rs 2 crore, UIDAI official told ET

At the center of the controversy appears to be the Airtel mobile app that has a dialogue box that compels the customer to tick a box where it says "Upgrade or create my Airtel Payment Bank wallet using existing Airtel mobile KYC". Unless the user ticks this box, a user cannot move to the next screen.

This is in gross violation of the agreement that Airtel had entered with the UIDAI in February 2015 and September 2016 under the Aadhaar Act 2016, by virtue of which, the telco and the bank were made Authentication User Agencies (AUA). Obtaining an explicit consent of the customers is vital under this agreement and violations can lead to termination of this agreement even, besides being fined.

The UIDAI had issued 2 notices to Airtel, once in September and again in November 2016 and the reply filed by the company was not satisfactory, according to the authority. They then appointed Price Waterhouse Coopers to conduct an audit of both the companies and possibly that is how the anomaly got revealed.

In the books of the UIDAI, Airtel and Airtel Bank had made "false statements" to "deceive and mislead" UIDAI; hence this strong action.

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