There have been many cases where the private banks are misusing the Aadhaar based eKYC verification for opening accounts. RBI has now taken a step in this direction and is trying every bit to stop such misuse of Aadhaar. Recently RBI announced that any such eKYC verification done by the banks will be considered as invalid. RBI also stated that the banks which have used the same method for verification will have to re-verify the customer’s credentials.
RBI is aiming to stop the mal-practices of the telecom companies with this step. A recent case was seen when Airtel Payment bank allegedly opened many accounts last month. Further, the bank linked the Aadhaar of their customers to the accounts without their knowledge and permission. There was also LPG subsidy worth Rs 190 Crore routed with these accounts which the customers were not aware of. Customers who submitted their Aadhaar were not aware that their documents will be so used in Airtel payment banks.
What RBI Guidelines Says to Prevent Misuse of Aadhaar?
Since the customers and government agencies are not getting successful in stopping the misuse of Aadhaar, therefore RBI has now stepped in. RBI has announced,
If the KYC done by a telecom company, which is a promoter of the payments bank, is of the same quality as prescribed for a banking company, payment banks may obtain the KYC details of the customer from the telecom company, subject to customer consent.”
The changed view of the RBI towards the Aadhaar misuse is viewed to deeply affect the payment banks. The payment banks which rely on telecom companies for acquiring customers will face the greatest troubles. The compliance cost of such payment banks will increase now because they can no longer be dependent on the telecom companies for doing KYC. They either have to do the customer’s KYC on their own or have to hire any third party for the same.
It is a challenge to complete root out the misuse of Aadhaar. The major issue is that the telecom companies and payment banks share the same resource. However, the latest step by RBI is expected to enhance the situation to some extent. Let us wait and see what next step will RBI take for stopping the complete misuse of the Aadhaar.