DoT erects iron KYC curtain to prevent misuse of SIMs for certain business connections

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Continuing with its resolve to prevent misuse of phone connections, online theft and cyber fraud, the Department of Telecommunications (DoT) has deployed additional KYC conditions that will be applicable for business connections, especially in instances where the users of the SIMs are not identifiable, The Economic Times has reported.

In an unprecedented crackdown, the government is about to direct the telecom companies to disconnect services to about 18 lakh SIM cards specifically to curb cyber frauds. The new strictures to issue SIM cards to business entities is a part of that umbrella objective of sanitising the ecosystem of cybercrime.

These new connections would be issued by telecom operators who would extract an undertaking from the subscribing entity that the SIMs would be out to specific purposes such as testing. Unlike the current practice, retailers won’t be allowed to issue these connections as KYC of every number won’t be done in these instances.

Telecom companies can also issue a maximum of 100 connections for any single entity at a time. Moreover, one of the conditions stipulate that such SIMs should not be used for machine-to-machine communications.

In August 2023, DoT said it was making KYC mandatory for every SIM, even for business connections. But this stricture led to a situation where the telecom companies found that in some instances, bulk connections did not have identifiable end users, making it impossible to conduct KYC. “In those scenarios where end-users are not identifiable in a business connection such as SIMs obtained for R&D & testing activities for a specified purpose, the requirement of end-user KYC is optional,” DoT said in its directions issued to telecom operators on May 20. To find a way around, DoT also said that in these cases, SIM cards shall be issued by the licensee’s employees only.

Just to be extra cautious DoT has also directed that the telecom companies should insist on an undertaking from the subscriber which would describe the situation without any end users and SIM issuer should be satisfied that the claims by the applicant are realistic. “During physical verification of the entity’s address and premises before issuing such connections, the licensee shall verify that the proposed use case scenarios of the subscribing entity are realistic,” the DoT said.

DoT has also asked the telecom companies to monitor the use of these SIMs. “If it comes into the notice of licensee, licensor, or designated LEAs about misuse of these connections by the subscribing entities, such business connections shall be disconnected immediately without prejudice to any other action that may be taken under the law,” the DoT added.

There would be more tightening measures. Telocom companies are required to provide such connections with limited call/SMS/data facility for a maximum period of one year after which the validity period has to be renewed.

Before renewing the validity of the SIM, the telecom company should satisfy itself about the cleanliness of the usage pattern.

Resale of SIMs by business connections subscribing entities will not be allowed. Telecom companies should also ensure that subscribing entities must not obtain such connections for third parties.