The UIDAI has asked Airtel to explain, by December 4, why action should not be taken against it for allegedly opening payments bank accounts without “informed consent” of customers who went for Aadhaar-based mobile SIM verification.

Airtel, on its part, has refuted the allegations, saying all “Airtel Payments Bank accounts are opened only after explicit consent from the customer”. A company official added that Airtel is preparing to submit a detailed response to the Unique Identification Authority of India (UIDAI) within the stipulated deadline.

The Aadhaar-issuing body, the UIDAI, had slapped notices on Bharti Airtel and Airtel Payments Bank in this regard in September. A UIDAI source said the company’s initial reply was not satisfactory necessitating the need for seeking further explanation.

According to the UIDAI source, Bharti Airtel has been given time till December 4 to explain why action should not be initiated against it, including imposition of penalty on the issue.

The UIDAI official, who did not wish to be named, said that the authority had found prima facie “wrongdoings” on the matter.

When contacted, UIDAI CEO Ajay Bhushan Pandey said, “We have issued notice to a telecom operator and are awaiting their response. After giving full opportunity of hearing to the company concerned, we will take a judicious view of the matter.”

Pandey, however, did not identify the operator, saying the issue is under examination.

To an e-mail query by PTI, an Airtel spokesperson said the re-verification of mobile phones and the opening of Airtel Payments Bank accounts were separate transactions and not linked.

“Airtel Payments Bank is fully compliant with all guidelines and follows a stringent customer on-boarding process,” the Airtel spokesperson said.

He claimed that the consent for opening Airtel Payments Bank accounts as also Direct Benefit Transfer (DBT) is taken separately from all customers. The DBT amount is automatically credited to the most recent Aadhaar-linked bank account of a customer in line with the applicable norms, the spokesperson added.

“If the Airtel Payments Bank account is the latest Aadhaar-linked account opened by a customer, the DBT automatically gets routed to it,” Airtel said, adding that such subsidy credit is also brought to the attention of the customers through a message or automated call.

It may be recalled that the UIDAI had shot off a notice to Airtel in September warning that not taking consent and informing the purpose of authentication was a violation of the Aadhaar Act and punishable with financial penalties.

In the notice served at that time, the UIDAI had said it had come to know that “Airtel retailers are allegedly opening Airtel Payments Bank accounts at the time of performing Aadhaar e-KYC verification without informing the purpose of e-KYC and also without taking informed consent of the customer”.

It also asked both Bharti Airtel and its payments bank entity to take immediate corrective measures and report back to the authority on the same.

The move came after complaints were made to the UIDAI alleging that Airtel opened payments bank accounts without explicit consent of consumers and that the accounts were then linked for receiving LPG subsidy.

Airtel Payments Bank was the first payments bank to go live in the country when it rolled out banking services from Rajasthan in November 2016.

Payments banks can accept deposits and savings bank deposits from individuals and small businesses, up to a maximum of Rs 1 lakh per account.