The Unique Identification Authority of India (UIDAI) has suspended the eKYC licence of Airtel Payments Bank alleging it routed LPG subsidy payments worth Rs 190 crore to its payments bank accounts, wherein some of the accounts were opened and force-seeded with Aadhaar without the informed consent of the customers. The UIDAI has also penalised the bank Rs 2.5 crore. What Airtel has done seems like finding loopholes in the Aadhaar payments system and exploiting them. At the time of going to press, Airtel was given restricted relief for using its eKYC and authentication service only for reverification and issuance of SIM cards.
The department of telecom mandates operators to verify each mobile number with Aadhaar. The problem with this process is that it is difficult for government agencies to differentiate the nature of consent - whether the consent was taken for SIM verification or opening a bank account. Only users can take note of such violations and report to the UIDAI. While this is an area where Airtel has violated norms, but when it comes to subsidy transfers, banks have an easy way to exploit the system.
For instance, NPCI, the umbrella organisation for retail payments, says a bank is required to ask the user if he or she wants subsidy payments in a particular account. In this case, Airtel should have asked users if they want their subsidy transfers to be shifted from their other bank account to Airtel payments bank account. But in the absence of any statutory powers being given to NPCI, its rules could be easily flouted by banks. The agencies need to fix some of these loopholes to avoid repetition of such instances.