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DoT fines operators Rs 2335.90 crore for violating KYC norms

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The Department of Telecommunication (DoT) has imposed a penalty of Rs 2335.90 crore on telecom operators whose Customer Acquisition Forms (CAF) were found to be “non-complaint” with existing regulations, telecom minister Manoj Sinha said in a written reply to Lok Sabha questions. CAF forms requires a customer to enter his/her details while buying a new SIM card. This is required to prevent fraudulent use of SIM cards and to verify details of the subscriber under current Know Your Customer (KYC) norms.

The Telecom Enforcement, Resource & Monitoring (TERM) Cells conducts regular monthly audits of CAF forms collected by telcos. TERM does not review all CAF forms submitted but takes in a sample size of 0.1% to 0.2% of all forms collected by telcos in a circle. As of September 3oth 2016, TERM cell found that out of 7.84 crore CAFs audited, a total of 43.20 lakhs CAFs were found to be non-compliant. The names of telcos who had failed CAF forms were not mentioned.

Sinha mentioned that the small sample size of 0.1%-0.2% each month “is good enough size to represent the whole population” since TERM cells carryout verification of sample sizes every month, making it a continuous process. “Penalty is imposed for each failed CAF ranging from Rs. 1,000/- to Rs. 50,000/- per CAF based on the CAF failure rate,” added Sinha in his reply.

State-wise failure rates

Maharashtra circle had 4.26 lakhs CAF forms (out of 64.37 lakh forms) that were found to be “non-complaint” with norms, which is the highest out of 22 circles. Karnataka closely followed with 4.08 lakh “non-complaint” CAF forms out of 47.62 lakh forms audited. Andhra Pradesh had 3.51 lakh failed CAF forms out of the total 55.04 lakh forms audited.


TRAI fines incumbents for denying interconnection to Jio       

Note that this isn’t the first penalty imposed on telcos in this year. In October, India’s telecom regulator TRAI  recommended the DoT to impose a combined penalty of Rs 3050 crore on Airtel, Idea and Vodafone, as these operators were found to “willfully violate the license conditions” by denying Points of Interconnection to new entrant Reliance Jio. However the penalty is up for review with DoT till data, while there is no official word on whether this will be implemented yet.

TRAI proposed Rs 50 crore penalty per circle for 21 circles of Airtel; Rs 50 crore in penalty for Vodafone in each of its 21 circles; and Rs 50 crore per circle as penalty for Idea in 19 circles.

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