Reserve Bank of India imposes monetary penalty of INR5,00,00,000/-on Airtel Payments Bank Limited

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          Reserve Bank of India has informed to public at large on march 9, 2018 that it has imposed, on March 07, 2018, a monetary penalty of ₹ 50 million on Airtel Payments Bank Limited (the bank) for contravening the ‘Operating Guidelines for Payments Banks’ and directions issued by RBI on Know Your Customer (KYC) norms.

The monetary penalty was necessary as Airtel Payments Bank has not adhered to guidelines/directions issued by RBI on Know Your Customer (KYC) norms.

          Reserve Bank of India has also clarified that this  action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.


Brief Background:-

Based on the complaints and adverse media reports alleging that the bank had opened customer accounts without a clear/specific consent of the customers, a supervisory visit to Airtel Payments Bank was undertaken by RBI between November 20 and 22, 2017.

The supervisory visit report and other relevant documents, revealed, inter alia, contraventions of ‘Operating Guidelines for Payments Banks’ and the directions issued by RBI on Know Your Customer (KYC) norms.

Based on the documents, a Notice dated January 15, 2018 was issued to Airtel Payments Bank  advising it to show cause as to why penalty should not be imposed for non-compliance with guidelines and directions issued by RBI.

After considering the Airtel Payments Bank’s reply and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI guidelines/directions were substantiated and warranted imposition of monetary penalty.

Additional Reading:-

Airtel Payments Bank slashes interest rate by 175 bps to 5.5%

Teleco Operated Payments Banks Need To Do KYC Verification Independently: RBI




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