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| Rs 8 cr fine imposed on J&K telecom firms for activating unverified SIMs | | | EARLY TIMES REPORT
NEW DELHI, July 15: The Centre has imposed a fine of Rs 8 cr on telecom companies in J&K for activating unverified SIMs.
Apart from J&K, action was also been taken against major telecom companies in other states for not fully meeting the Know-Your Customer (KYC) norms. The action is intended to send a message that the Centre is not averse to withdrawing the licence of an operator if it fails to comply with guidelines.
Official sources said a penalty of more than Rs 275 cr had been imposed on telecom operators across the country. In Jammu & Kashmir, where the government has asked all telecom firms to ensure full compliance of KYC norms within seven days, authorities have imposed fines amounting to at least Rs 8 cr. The sample study in the border state revealed unverified SIMs to an extent of 50 per cent of active connections.
As a special case in J&K, an applicant for a new connection has to produce a reference letter from an existing post-paid customer, besides providing proof of identity and address. The database of customers needs to be updated immediately by an operator.
However, a sample study of 17,000 subscribers in the state revealed that an average 15-20 per cent did not meet KYC norms - their proof of address or identity was not available - and in nearly 50 per cent cases, they failed both the KYC norms and were untraceable in the database of these operators.
Interestingly, the huge penalty is just for a period of four months between April-July 2009 when a department of telecom (DoT) probe found that nearly 1.5 lakh subscribers did not fully meet the KYC norms out of a sample study of 14 lakh. Subscriber verification is on for the post-July 2009 period, which could see a jump in the fines imposed.
The fines are graded on the basis on percentage of violation and accordingly the amount varies for each operator. For an operator whose accuracy rate of verified customer base is below 80 per cent, the penalty is Rs 50,000 for each fake SIM subscriber detected. Between 80-85 per cent accuracy rate, the penalty is Rs 20,000 persubscriber whose identity is found to be fake.
Besides the penalty, the CEOs and CMD of these telecom firms face criminal action if any of these SIM cards are misused. These top officials will be treated as co-accused in cases were unverified SIMs are found to be used in terror acts.
DoT has asked its state cells to issue notices for penalty in each telecom circle separately. The penalties were imposed after operators were given the opportunity to explain, a senior DoT official said. Penalties were imposed in only those cases where operators agreed to the shortcomings on their part.
Last year, after repeated violation of KYC guidelines, the government increased penalty amount from Rs 1,000 to a maximum of Rs 50,000 per unidentified customer.
The enhanced graded penalty was enforced from April 1, 2009 after a DoT audit revealed that the number of unverified SIMs had gone up substantially to more than 6 lakh of the nearly 35 lakh connections checked in the two years till April 2009.
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