UIDAI pulls up Bharti Airtel for opening payments bank accounts without 'customer consent'

The Unique Identification Authority of India (UIDAI) has initiated inquiry against Bharti Airtel for allegedly opening payments bank accounts of its subscribers who went for Aadhaar-based SIM verification without their 'informed consent'. The Aadhaar-issuing authority has sought an explanation from Airtel by December 4 why a financial penalty should not be imposed on it in this case for violating Aadhaar regulations.

The UIDAI had issued notices against Bharti Airtel and Airtel Payments Bank in this regard in back in September this year. The need to seek further explanation arose after UIDAI found the initial response from Airtel unsatisfactory, an UIDAI official told PTI. The anonymous UIDAI official said that prima facie, the authority had found Bharti Airtel responsible for "wrongdoings" in the matter.

The matter came on the radar when the LPG subsidy of some Airtel subscribers was transferred in their Airtel Payments Bank account, and not 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. Presently, the subsidised amount is transferred directly to the bank accounts of beneficiaries under the Aadhaar-based Direct Benefit Transfer (DBT) scheme.

As of now, Bharti Airtel has been given time till December 4 to explain why action should not be initiated against it, including imposition of penalty on the issue, 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 judicious view of the matter," UIDAI CEO Ajay Bhushan Pandey told PTI. Pandey, however, did not identify the operator, saying the issue is under examination.

Meanwhile, Airtel said in its defence that "Airtel Payments Bank accounts are opened only after explicit consent from the customer". Meanwhile, according to company sources, Airtel is readying a detailed response to submit to the UIDAI within the stipulated time period.

As per a statment by an Airtel spokesperson to 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 the notice served at that time, 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.

(With PTI inputs)