Indian government makes verification of dealers selling SIM cards mandatory in a bid to check digital frauds

In an effort to combat instances of digital fraud, the government has taken steps to ensure the verification of dealers selling SIM cards and has ceased the practice of issuing bulk connections, according to Union minister Ashwini Vaishnaw’s announcement on Thursday.

Initially, when outlining these new measures, the minister had indicated that police verification of SIM card dealers was now obligatory.

However, he subsequently clarified that this verification process would be carried out by the respective telecom operator or “the licensee.” Furthermore, he specified that a penalty of one million Indian Rupees (INR 10 lakh, equivalent to around USD 12,034) would be levied on those found violating these regulations.

In an extensive crackdown aimed at countering digital fraud connected to SIM cards, the government has already deactivated 5.2 million mobile connections. Moreover, around 67,000 dealers have been blacklisted, and since May 2023, approximately 300 First Information Reports (FIRs) have been lodged against SIM card dealers.

Additionally, the minister disclosed that WhatsApp independently suspended roughly 66,000 accounts associated with fraudulent activities.

“To effectively tackle fraud, it is imperative to ensure unquestionable verification of SIM dealers. Those who breach the norms will be subject to a penalty of Rs 10 lakh,” stated Vaishnaw.

Telecom operators will oversee this verification process, wherein they will collect comprehensive information about each business owner and the relevant business-related documents for verification prior to appointing a dealer.

Formerly, there were no detailed guidelines outlining the documentation of dealers.

Vaishnaw assured that there are approximately one million SIM card dealers, and they will be provided with ample time to complete the verification process.

The Department of Telecommunications has also eliminated the practice of issuing bulk connections, introducing a new concept known as the business connection instead.

Furthermore, along with the Know Your Customer (KYC) process for businesses, there will also be a KYC procedure for individuals receiving SIM card handovers, Vaishnaw added.