UIDAI probe against Airtel for opening payments bank accounts sans consent

The Unique Identification Authority of India (UIDAI) has initiated an inquiry against Bharti Airtel for allegedly opening payments bank accounts in the name of subscribers who underwent Aadhaar-based SIM card verification without their ''informed consent''.

The Aadhaar-issuing authority has sought an explanation from Airtel by 4 December why a financial penalty should not be imposed on it for violating Aadhaar regulations.

The UIDAI had issued notices to Bharti Airtel and Airtel Payments Bank in this regard in September this year. The UIDAI had sought further explanation after it found the initial response from Airtel unsatisfactory, an official told PTI.

The UIDAI official said that prima facie, the authority had found Bharti Airtel responsible for "wrongdoings".

The matter came to the UIDAI's attention when the cooking gas subsidy of some Airtel subscribers was transferred to their Airtel Payments Bank account and not to their designated bank account.

The UIDAI received complaints alleging that Airtel opened payments bank accounts without explicit consent of consumers and that the accounts were then linked for receiving LPG subsidy. Under current rules, the subsidy amount is transferred directly to the bank accounts of beneficiaries under the Aadhaar-based Direct Benefit Transfer (DBT) scheme.

Bharti Airtel has been given till 4 December to explain why action should not be initiated against it, including imposition of a penalty, confirmed UIDAI sources.

"We have issued notice to a telecom operator and are awaiting their response. After giving full opportunity of hearing to the company concerned, we will take a judicious view of the matter," UIDAI chief executive Ajay Bhushan Pandey told PTI. He did not name the operator, saying the issue is under examination, but it has been determined to be Airtel.

Airtel said that "Airtel Payments Bank accounts are opened only after explicit consent from the customer". The firm is readying a detailed response to the UIDAI within the stipulated time period.

An Airtel spokesperson told PTI the re-verification of mobile phones and the opening of Airtel payments bank account were separate transactions and not linked. "Airtel Payments Bank is fully compliant with all guidelines and follows a stringent customer on-boarding process," the Airtel spokesperson said.

He claimed that the consent for opening Airtel payments bank account as also DBT is taken separately from all customers. The DBT amount is automatically credited to the most recent Aadhaar-linked bank account of a customer as per the applicable norms, the spokesperson added.

"If the Airtel payments bank account is the latest Aadhaar-linked account opened by a customer, the DBT automatically gets routed to it," Airtel said, adding that such subsidy credit is also brought to the attention of the customers through a message or automated call.

In its notice, the UIDAI had said it had come to know that "Airtel retailers are allegedly opening Airtel payments bank accounts at the time of performing Aadhaar e-KYC verification without informing the purpose of e-KYC and also without taking informed consent of the customer". The authority also prompted both Bharti Airtel and its payments bank arm to take required corrective measures immediately and report back to the authority on the same.

Airtel Payments Bank was the first payments bank to go live in the country when it rolled out banking services from Rajasthan in November 2016. As per norms, payments banks can accept deposits and savings bank deposits from individuals and small businesses up to a maximum of Rs 1 lakh per account.