Launching an internal probe after the UIDAI in mid-December suspended Airtel and Airtel Payments Bank from conducting Aadhaar-based verification of customer, Airtel Payments Bank has terminated relationships with nearly 1,000 retailers.
The Sunil Mittal-led company removed these retailers for not following the due process while signing up customers.
According to ET report, the company levied a penalty of around 50 times the commission paid on several retailers who violated the guidelines for the first time and removed repeat offenders from the network besides imposing a fine on them.
In the meantime, Bharti Airtel’s Payments Bank Managing Director and Chief Executive Officer (CEO) Shashi Arora quit amid controversy of UIDAI and Airtel’s Aadhaar based SIM e-KYC In December. Interestingly, Airtel’s chief executive, Gopal Vittal, had admitted to lapses in governance in its customer authentication process.
The recent probe also observed that some of the retailers that were also acting as designated banking points had not informed customers about savings account opening and direct benefit transfer (DBT) receipts in an upfront manner.
The company has suspended such 1,000 retailers, and they have been removed from the network and penalised as of December, and the number is likely to rise as the investigation continues.
Airtel was barred by UIDAI following allegations that Bharti Airtel was using the Aadhaar e-KYC-based SIM verification process to open payments bank accounts of its subscribers without their informed consent. Security and privacy of Aadhaar data have been fiercely debated and the Supreme Court is currently looking into its various aspects.
After a week of suspension, the UIDAI later temporarily allowed Airtel to do eKYC for its customers until January 10. However, Airtel Payments Bank continues to be barred from 12 digits biometric-based e-KYC verification.
The relief came to Airtel after it returned Rs 138 crore of LPG subsidy remitted to the unsolicited payments bank accounts.