Mumbai: The Reserve Bank of India (RBI) has imposed Rs 5 Crore penalty on Airtel Payments Bank Limited for failing to comply with Know Your Customer (KYC) norms.

“The Reserve Bank of India (RBI) on March 07, has imposed a monetary penalty of Rs 50 million on Airtel Payments Bank Limited (the bank) for contravening the “Operating Guidelines for Payments Banks” and directions issued by RBI on Know Your Customer (KYC) norms”, said an official statement.

Detailing the background of the issue, RBI statement said, “Based on the complaints and adverse media reports alleging that the bank had opened customer accounts without a clear/specific consent of the customers, a supervisory visit to the bank was undertaken by RBI between November 20 and 22, 2017. The supervisory visit report and other relevant documents, revealed, inter alia, contraventions of ‘Operating Guidelines for Payments Banks’ and the directions issued by RBI on Know Your Customer (KYC) norms.”

“Based on the documents, a notice dated January 15, 2018 was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with guidelines and directions issued by RBI. 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”, the apex bank clarified.

It may be recalled that, in December last year, the UIDAI had temporarily suspended Airtel Payments Bank from using e-KYC process by Aadhaar-based SIM verification of mobile customers. Many customers had complained to the UIDAI that Airtel misused the e-KYC process to open payments bank accounts without “informed consent” of its subscribers.