Airtel Deposits Rs 167 Crore In Their Payments Bank Without Customer Consent

Aadhaar-linked KYC verification of Bharti Airtel and Airtel Payments Bank has been canceled after Rs. 167 crore from 31.21 lakh customers was deposited in their Airtel Payments Bank, without their “informed consent”. Airtel customers have reported that their LPG subsidies were somehow being credited to their Airtel Payments Bank accounts, which were earlier linked to their savings bank accounts.

The UIDAI also took strong action against the fact that such payment bank account was being used to receive LPG subsidy.

UIDAI, in an interim order, “suspended e-KYC license key of Bharati Airtel Ltd and Airtel Payment Bank Ltd with immediate effect,” sources with direct knowledge of the development said, according to an Economic Times report.

What does it mean?

The malpractice came to light after the customer complained that not only was a payments bank main in his name, but the said bank was receiving his LPG subsidy too. UIDAI found that the case was same for several customers. Even though their savings accounts were linked to receive the subsidy, the money was automatically going to the Airtel Payments Bank account. It was also found that the amounts that were transferred from Hindustan Petroleum Corporation was Rs 40 crore, from Bharat Petroleum Corporation Rs 39 Crore and Indian Oil Corporation Rs 88 crore.

The order to suspend the e-KYC (Know Your Customer) means that Airtel essentially would not be able to do the ëlectronic verification or link Aadhaar with the mobile numbers of the customer. Also, they will not be able to open new Payments Bank account with the Aadhaar verification procedure. Although, alternative methods are available for that.

How did it happen?

When UIDAI reviewed the Airtel mobile app, it found that when the app is opened, along with the welcome message a pre-ticked consent box is momentarily flashed on the screen which states “Upgrade or create my Airtel Payment Bank wallet using existing Airtel mobile KYC.” This is in clear violation of Aadhaar Act and Regulations.

UIDAI has further asked Pricewatercoopers to conduct an audit of Bharti Airtel and Airtel Payments Bank to see if there are any malpractices with regard to Aadhaar within the company. An official with the UIDAI said that they hope the money is transferred back to the customers.

The amounts transferred from Hindustan Petroleum Corporation was Rs 40 crore, from Bharat Petroleum Corporation Rs 39 crore and Indian Oil Corporation Rs 88 crore, according to a Times of India report.

UIDAI Officials have suggested that it would be appropriate if the sums were returned to the customers since the amounts were collected improperly and they were flouting the Unique Identification Authority of India (UIDAI) norms and they have also said that the government should stop sending subsidy to payments banks
and wallets.

Effect of the order

On Wednesday, UIDAI move took a toll on the Bharti Airtel stock as at 2.20 pm, it was down 3 percent on the NSE. In comparison, the broader market was up 0.7 percent. After the interim order of the UIADAI, Bharti Airtel has been asked to shut down their SIM card distribution chains which as an official has stated is making the company suffer from losses.