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RBI imposes Rs 50 million penalty on Airtel Payments Bank for KYC norms violation

March 12, 2018

The Reserve Bank of India (RBI) has imposed a penalty of Rs 50 million on Airtel Payments Bank for violating operating guidelines and know-your-customer (KYC) norms. The fine was imposed after RBI scrutinised the bank's documents relating to opening of accounts without any specific or clear consent from the customers. Earlier, it was reported that more than 2.3 million customers had reportedly received as many as Rs 470 million in their Airtel bank accounts, which they did not know had been opened.

Based on the complaints alleging that the bank had opened customer accounts without clear or specific consent of the customers, RBI conducted a supervisory visit to the bank from November 20, 2017-November 22, 2017. The supervisory visit report and other relevant documents, revealed contravention of operating guidelines for Payments Banks' and the directions issued by RBI on KYC norms.

Subsequently, RBI issued a show cause notice to the bank on January 15, 2018 stating as to why penalty should not be imposed for non-compliance with guidelines and directions issued by the central bank. RBI stated that after considering the bank's reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI guidelines/directions were substantiated and warranted imposition of monetary penalty. Further, it stated that the action was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

 

 
 

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