RBI takes punitive action against Airtel Payments Bank
Published: Mar 12, 2018
By TIOLCORPLAWS News Service
MUMBAI, MAR 12, 2018: THE RBI has imposed a monetary penalty of Rs 50 million on Airtel Payments Bank Ltd for contravening the ‘Operating Guidelines for Payments Banks' and directions on KYC norms.
The action was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Based on the complaints and adverse media reports alleging that the bank had opened customer accounts without a clear and specific consent of the customers, a supervisory visit to the bank was undertaken by RBI between November 20 and 22, 2017, which revealed contraventions of ‘Operating Guidelines for Payments Banks' and the directions on KYC norms. Thereafter, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance. After considering the bank's reply and oral submissions made in the personal hearing, RBI came to the conclusion that such charges of non-compliance with RBI guidelines and directions were substantiated and warranted imposition of monetary penalty.