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RBI And UIDAI Allow Airtel Payments Bank To Take New Customers, Do e-KYC

Inc42 2018-07-12 15:19:28

After receiving multiple complaints continuously, in an order issued on December 15, 2017, the UIDAI temporarily banned Airtel and Airtel Payments Bank from conducting eKYC of customers using Aadhaar.

Reports surfaced at the time that bank accounts of more than 2.3 Mn Airtel customers were created, with over $7.3 Mn (INR 47 Cr) being transferred to these accounts.

Further, many Airtel customers also complained that the company was redirecting LPG subsidies to these accounts without their consent.

It was also suggested that subsidies amounting to $26 Mn (INR 167 Cr) of nearly 4.7 Mn LPG customers had been transferred to these accounts without their knowledge.

With the ban, Airtel was not able to conduct e-verification of its telecom customers nor will it be allowed to link customers’ SIM to Aadhaar during the interim period.

Additionally, the Payments bank was barred from opening new accounts using Aadhaar-based eKYC. It will, however, be able to open bank accounts through “alternate methods”, if available.

After making a payment of $21.2 Mn (INR 138 Cr) in DBT subsidy, the company was given a conditional approval to perform Aadhaar-based e-KYC verification of its telecom users till January 10.

What’s Happening With Payments Banks In India?

RBI has been promoting these banks to bolster financial inclusion by giving services such as small savings accounts, payment or remittance services to migrant labour workforce, low-income households, small businesses and unorganised sector entities as well as other users.

A payments bank can accept deposits of up to INR 1 lakh, offer remittance services, mobile payments or transfers or purchases and other banking services like ATM/debit cards, net banking and third party fund transfers but cannot advance loans or issue credit cards.

In April, Reliance Jio commenced the operations of its Jio Payments Bank. While, Department of Posts opened its payments bank in January 2017, after which Paytm promoted Paytm Payments Bank began operations from May 2017.

While FINO kicked-off its operations in June 2017 and Aditya Birla Idea commenced its operations from February 22, 2018.

Apart from these, others that received the RBI’s license include Cholamandalam Distribution Services Ltd, Tech Mahindra Ltd,  Dilip Sanghvi (founder of Sun Pharmaceuticals Ltd) and National Securities Depository Limited.

With Airtel and its Payments bank finally back on track with operations, we can expect the competition to get tougher in the space.