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Updated: Rs 47Cr LPG subsidy credited to 23 lakh Airtel Payments Bank accounts instead of regular accounts

Update: From June 9 this year till late last month, over Rs 47 crore worth of LPG subsidy was credited to more than 23 lakh consumers’ Airtel Payments Bank accounts instead of their regular bank accounts, according to the National Payments Corporation of India (NPCI), as reported by ET. Of this, about 11 lakh consumers belong to Indian Oil, and about 6 lakh consumers each of Bharat Petroleum and Hindustan Petroleum.

Note that earlier the Ministry of Petroleum & Natural Gas had said that the mix-up had happened because “as per subsidy transfer protocol, the LPG subsidy is transferred to the (latest) bank account of the beneficiary seeded with their Aadhaar.”

Earlier (October 30): The Ministry of Petroleum & Natural Gas has informed that after following up on several consumer complaints regarding non-credit of LPG subsidy over the past few weeks, it has learnt that the subsidy had been credited to their Airtel Payments Bank accounts instead of their regular bank accounts. The Ministry said that “as per subsidy transfer protocol, the LPG subsidy is transferred to the (latest) bank account of the beneficiary seeded with their Aadhaar.”

So, those consumers who are Airtel subscribers and have opened an Airtel Payments Bank account had their LPG subsidy transferred to this account. However, this wasn’t notified to them.

The Ministry added that to “redress the inconvenience caused to LPG consumers, MoPNG and Oil Marketing Companies (OMCs) have already taken up the matter with the concerned authorities in Department of Financial Services (Ministry of Finance), National Payments Corporation of India (NPCI) and Airtel.” However, no details have been provided regarding when this matter will be resolved.

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OMCs have been in the spotlight earlier as well: Last year in Karnataka, OMCs had stopped providing LPG subsidies in a bid to force people to link Aadhaar with their LPG connections, as reported by TOI. Apparently, they were doing this on the insistence of MoPNG.

Airtel Payments Bank had begun operations in November 2016, with a pilot in Rajasthan. In December 2016, it had confirmed to MediaNama that it’ll expand its operations to Andhra Pradesh, Telangana and Karnataka in a couple of weeks. At the time, Airtel had claimed that it had already opened more than 1 lakh savings accounts with its payments bank, according to this ET report.

It’s also worth noting that Airtel Payments Bank had decided to not to issue debit cards. In fact, it charges customers for cash withdrawals. However, it does have a partnership with card network MasterCard whereby customers are given a virtual card linked to their savings bank account that can be used for payments across all online merchants. As of August 2017, Airtel claims to have issued more than two million virtual debit and prepaid cards.

It doesn’t need to be reiterated that consumers who are dependent on LPG subsidies are unlikely to have the wherewithal to afford LPG cylinders sans the subsidy. Plus, with no access to debit cards they will remain at the mercy of the government till such time that this matter is resolved. One option is that Airtel Payments Bank steps up at this point and releases the subsidies to the affected consumers, many of whom are below the poverty line.

Accounts opened without consumer consent

Then there is this issue: Last month, reports surfaced that Airtel Payments Bank had opened bank accounts without informed consent from its customers and had received a notice from the UIDAI. Airtel’s retailers have allegedly used Aadhaar e-KYC to open bank accounts for customers when they went to stores for verification of their SIMs. The UIDAI reportedly in its notice asked Airtel Payments Bank take immediate corrective measures and report back to the authority on the same. It added that opening accounts without informed consent is a violation of rules and is punishable with financial penalties.

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