Airtel Payments Bank awaits nod to get full e-KYC facility
Airtel Payments Bank has been denied permission to use Aadhaar-linked Know Your Customer authentication¸ awaiting a report from the Reserve Bank of India (RBI). The central bank is yet to submit a report on allegations that the company routed government subsidy on LPG cylinders to accounts it opened for Bharti Airtel Telecom customers¸ without explicit prior consent.
In December, the UIDAI suspended Airtel and its payments bank’s facilities from using UIDAI’s eKYC services¸ following allegations of opening payments bank accounts without user consent and subsequently transferring LPG subsidies to these accounts. Experts contend that this setback, even if temporary, could put the company at a disadvantage over its competitors in acquiring new customers.
On May 16, UIDAI published a list, categorising companies using Aadhaar eKYC into global and local Authentication User Agencies (AUAs) — citing data privacy concerns. The list allowed most commercial and payments banks regulated by the RBI to continue using full e-KYC.
Fintech and e-wallets fall into the category of local AUAs, which are not allowed to collect or store Aadhaar numbers. They can carry out limited KYCs based on virtual IDs rolled out by UIDAI. In the list of global AUAs, which are allowed to carry out full eKYC, the circular did not mention Airtel Payments Bank. “We are writing to and working with the authorities on the non-inclusion of our name,” an Airtel spokesperson said.
Airtel had responded to UIDAI following this move, claiming it had completely overhauled and de-linked the process of opening bank accounts by reverification In a May circular, UIDAI categorised Aadhaar using authentication agencies into local and global AUAs. Global AUAs are allowed to do full eKYC using Aadhaar number but local AUAs must mandatorily use virtual IDs and cannot store Aadhaar numbers. Almost all payment and scheduled banks made it to the list but Airtel Payments Bank didn't make the cut. Sources said that the bank continues to face the suspension of its authentication facilities due to alleged linking of bank accounts without customer consent.
Airtel claims that it is speaking to UIDAI to get its name included in the list. of mobile numbers¸ which was being done by all telecom companies following the government’s orders. However, it only succeeded partially.
In March, the UIDAI revoked Bharti Airtel’s suspension from doing KYC verification for its telecom subscribers but precluded the payments bank from using the service. It reinstated the license on the basis of certain conditions, such as quarterly reports from the company.
But UIDAI did not revoke the suspension for Airtel Payments Bank.
UIDAI did not respond to emailed queries sent by Business Standard. A person with direct knowledge of the matter, however, said permission to use e-KYC facility remains suspended for Airtel Payments Bank pending an RBI report, which is supposed to give a lowdown of the alleged wrongdoing on the bank’s part. The person said the suspension was revoked after a report from the Department of Telecommunications that the telecom operator was ready for compliance. Also, the company is being regularly monitored to ensure compliance, they explained.
A tough period is expected for Airtel Payments Bank customers who won’t be able to use e-KYC to access various services, and the bank won’t be able to use it to add new subscribers. This could provide an opportunity for competitors to move past Airtel even as behemoth India Post gets ready for a launch.
“The market is definitely heating up and the issues aren’t new for Airtel Payments Bank,” said a payments industry professional. “The bank is expecting to get the suspension revoked¸ but the more UIDAI delays it, the more friction it creates in the consumer experience and thus helps their competition. As an industry, we should all stand for good practices that do not mislead the consumer in any fashion, so UIDAI’s action on Airtel Payments Bank is not being seen as too harsh by many.”