Airtel Payments Bank License Suspended; Airtel Barred From Conducting Aadhaar-based e-KYC!

In one of the biggest setbacks for Airtel so far, UIDAI has temporarily barred Airtel from carrying out Aadhaar-based SIM verification using e-KYC for its mobile customers and has suspended the license of its Airtel Payments Bank. This means that Airtel cannot sign-up new customers, which will have a direct impact on its market share and revenues.

UIDAI took this drastic step based on the complaint of a user stating their LPG subsidy was attached to their Airtel Payments Banks account without their permission or knowledge and also that the payments bank account was opened without their consent.

During the subsequent investigation, it was found that Airtel has created Airtel Payments Bank accounts for around 31.21 lakh customers and joined these accounts to receive the customer’s LPG subsidy into these accounts. So far, it has been reported that Rs. 167 crores have been deposited in these accounts over the course of time.

What is Airtel doing? Amidst a brazen violation of user’s privacy and breach of trust in opening accounts without their users’ express consent, we are forced to ask, “What more violations has Airtel committed?”

We look into the matter.

Airtel Violated UIDAI Norms Under The Pretext Of e-KYC!

Back in May, we had reported that Airtel retailers were opening Airtel Payments Bank Accounts, without users’ knowledge or permission, under the pretext of Aadhaar-based e-KYC. Since users were submitting their Aadhaar details and biometrics for the e-KYC process, they were used to open Airtel Payments Bank accounts in their names, without their consent.

UIDAI had served Airtel with two notices in this matter, on 18th September 2017 and 24th November 2017. But the authority was dissatisfied with Airtel’s response both the times. UIDAI has stated that when they checked Airtel’s mobile app, they found that along with the welcome message, the app momentarily flashed a pre-ticked consent box on the screen which states “Upgrade or create my Airtel Payment Bank wallet using existing Airtel mobile KYC.”

UIDAI found this to be contradicting what Airtel had stated in their reply to the notices. The body strongly objected to the fact that these accounts were being linked to receive LPG subsidies into the accounts, without the users’ knowledge or consent.

Finally, UIDAI took the drastic step wherein they have temporarily barred Airtel from carrying out Aadhaar-based e-KYC verifications for their new and existing customers. Sources who are close to the development have said that UIDAI has issued an interim order and “suspended e-KYC licence key of Bharti Airtel Ltd and Airtel Payment Bank Ltd with immediate effect,”

How Much Money Was Diverted To Airtel Payments Bank Accounts?

Since these accounts were linked to receive customers’ LPG subsidies, around Rs. 167 crores were deposited into these accounts over a period of time. Following is the breakup of payments received;

• Rs. 40 Crores from Hindustan Petroleum Corporation
• Rs. 39 Crores from Bharat Petroleum Corporation
• Rs. 88 Crores from IndianOil Corporation

This malpractice was exposed after UIDAI investigated a person’s complaint alleging that Airtel opened a payments bank account in his name and linked his LPG subsidy to it, all without his knowledge or consent.

Based on subsequent investigation carried out by UIDAI, Airtel and Airtel Payments Bank have been found to be in violation of different sections of the Aadhaar Act, 2016, which make it mandatory to obtain explicit consent of the users. Such violations are punishable with a fine of Rs 1 lakh per day and may result in termination of authentication user agreements.

So What’s In Store For Airtel In Future?

As fo now Airtel has been barred temporarily from carrying out Aadhaar-based e-KYC for their new and existing customers. While this is not a big issue for new customers who want to sign up with Airtel, their existing customers will be affected. If they are not able to complete their Aadhaar verification before the stipulated deadline, they might have their connections terminated.

Airtel should be held accountable for their actions here. But at the same time, UIDAI should take care that genuine subscribers do not end up paying the price for Airtel’s infractions.

Unless some really strict action is taken, what would prevent Airtel or any other telecom to take users’ privacy and consent for granted in the future?

We will keep you updated of any new developments.