When KYC norms go for a toss with prepaid mobile connections  

May 26, 2010

Unless all documents are verified, one is not supposed to use a prepaid SIM card to make and receive calls. However, in reality, you can use any prepaid card without getting your documents verified, for one or two days

Regulators like the Reserve Bank of India, the Securities and Exchange Board of India (SEBI) and the Telecom Regulatory Authority of India (TRAI) are insisting on strict implementation of know your customer (KYC) norms. However, in practice, these norms are not being followed vigorously.

In the case of prepaid subscriber identity module (SIM) cards, it is observed that you cannot only buy, but also use these cards for making and receiving calls for a few days before the verification of documents. Usually, verification of documents for a new prepaid SIM card takes one or two days and the subscriber can make and receive calls during this period. This may be used by anti-social elements for any purpose like extortion and even by militants for spreading terror.

"We just need documents like a filled-up application form, address proof and photo-identification from a customer for selling prepaid SIM cards. We do not bother to check whether the person buying a prepaid SIM is the same person whose documents have been submitted," said a retailer, who did not want to be named.

Agents, who roam from one retailer to the other, collect these documents and send them to the company. The representative from the mobile service provider then checks these documents for any error and marks it as verified. In case there is an error, then the representative calls up the subscriber and asks for rectification. In the meantime, the subscriber can use his new SIM card for making or receiving calls. In short, this can be used by anti-social elements as a 'use-and-throw' type of service.

According to a customer care executive from Reliance Communications, the company tries to provide permanent connection on the same day. Its representative visits the subscriber's place and then sends a positive address verification report (AV report). In case the report is negative, then the customer is asked to submit the correct documents. "Usually when we feed the document details in our systems, we immediately come to know whether that particular address is valid or not. In case it is not valid then we immediately deactivate the number," the executive said. However, he admitted that during the buying and verification process, the customer can make and receive calls, without any problem.

Further, since there is no check on whether the buyer is the same person whose documents have been submitted, the connection can be misused. This could become a constant worry for people who have lost their ID proof like driving licence or PAN card as one is not sure if the document is being misused for buying SIM cards or not.

Unfortunately, there is no central database of mobile subscribers. So you cannot check if any other mobile number has been issued in your name.

In case you have lost any of your documents that can be used for purchasing a mobile connection, file a first investigation report (FIR) at the nearest police station. It may come in handy in case someone is misusing your documents for buying and using a new prepaid SIM card.— Yogesh Sapkale