Hyderabad, Nov 4 (FN Agency) All India Bank Employees’ Association (AIBEA) demanded Reserve Bank of India (RBI) Governor to disqualify and ban Vakrangee Limited, a chronic and repeated violator of RBI rules and guilty of non-compliance of RBI norms relating to undertaking of white Label ATM Services. The umbrella union body said Vakrangee Limited must be stopped by the central bank from acting as service provider for extending financial services to any bank. It is important to recall that this Vakrangee Limited applied for a license to start a Payment Bank. We believe that RBI has not granted them the license to start this, AIBEA General Secretary Ch Venkatachalam said in a letter to RBI Governor Shaktikanta Das on Thursday night.
He said on October 31, as per RBI Release, Vakrangee Limited has been imposed a fine of Rs 1.76 crore for non-compliance with certain provisions of the White Label ATM (WLA) directions. Last year in August, 2021, RBI imposed a fine of Rs. 1 crore on them for similar offence and non-compliance. It is a matter of serious concern that Vakrangee Limited. which one of the largest service-provider in extending financial services to various banks lacks integrity, honesty & transparency in its operations & hence RBI had to impose such fines on them, Venkatachalam remarked. It is observed that many banks are utilising Vakrangee Limited for various services such as account opening by obtaining KYC & eKYC documents, scouting, scrutiny of loan proposals which involves risk including reputational risk.
Some of the Banks are using the employees of Vakrangee Limited to work on the bank counters going beyond RBI directions in this regard. RBI should look into these aspects so that Banks do not get into problems besides safeguarding the interest of the customers, he said. Venkatachalam said We observe that at present Banking Correspondents/Bank Mitras/Business Correspondents are being employed by various private companies and agencies and provided to the banks for their services. These agencies not only exploit the Business Correspondents with inadequate commissions and remuneration, but are also resorting to unethical practices which may land the Banks into avoidable problems. Vakrangee Limited is only a tip of iceberg. We demand that Banking Correspondents/ Business Correspondents should be designed as a separate cadre of employees of Banks with defined duties, fair wages and service conditions, he added.