Court stops rollout of Equity Bank’s thin SIM cards
A member of the House Committee on Communication and Energy tries out a thin SIM card during a hearing on September 5, 2014. PHOTO | FILE
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The High Court on Thursday barred the bank from issuing the thin SIM cards following a case filed by Legal Advice Centre (LAC) which claimed that the Communications Authority of Kenya approved the technology before a full audit was done on its security risks.
The decision to permit the use of thin SIM technology prior to a complete satisfaction as to its security is improper use of regulatory power,” the lobby said.
Equity Bank is seeking an entry into mobile phone based banking by issuing its own SIM cards to customers.
The High Court has stopped Equity Bank’s planned rollout of thin SIM card technology until a case filed against the telecommunications regulator is heard, dealing a blow to the bank’s entry into the lucrative mobile money business.
Justice George Odunga on Thursday barred the bank from issuing the thin SIM cards following a case filed by Legal Advice Centre (LAC) which claimed that the Communications Authority of Kenya (CA) approved the technology before a full audit was done on its security risks.
Equity Bank is seeking an entry into mobile phone based banking by issuing its own SIM cards to customers.
The bank has already started issuing ordinary SIMs to customers who choose to join the Equitel network, but it is the plan to issue special thin SIM cards that are embedded on the primary SIMs that has caused concerns over privacy of customers’ data.
“The authorisation has been done without a full audit of the security of data or personal identification number (PIN) on the primary SIM card.
The decision to permit the use of thin SIM technology prior to a complete satisfaction as to its security is improper use of regulatory power,” the lobby said.
The paper-thin SIM cards work by riding on the primary SIM which acts as a bridge, transmitting information to the mobile subscriber’s phone.
The lobby wants the judge to reverse the communications regulator’s decision allowing the use of thin SIM cards, arguing that a full audit on the security risks posed by the technology was not done prior to giving Equity Bank the green light to roll out the SIM cards.
Mr Justice Odunga ordered the lobby group to serve the regulator and Equity Bank and appear before him on January 20 for further directions. The three parties are expected to have filed their responses by then.
The communications watchdog awarded Equity Bank the licence in August after dismissing opposition from Safaricom, the industry’s pioneer of mobile banking.
The bank is expected to challenge the virtual monopoly that Safaricom has enjoyed in the mobile money transfer industry for about seven years.
The thin SIM card is overlaid on the phone’s primary SIM, allowing the user to access the mobile transfer services. Fears have been raised over the possibility of the thin SIM card intercepting data from the primary SIM card, which could expose personal data to third parties.
Equity however maintains that the cards are safe, as it argues that Groupe Speciale Mobile Association-—the international regulator—is yet to prove any such claims.
LAC’s suit follows another petition by a businessman who has opposed the use of the thin SIM cards over the security fears. Bernard Murage in his suit claims that the bank has not given proper assurance to its clients that their personal data will be safe.
“In the absence of data protection laws in Kenya I have no redress if there is intrusion of my privacy through the thin SIM technology,” said Mr Murage.
Justice Isaac Lenaola will deliver judgment on Mr Murage on notice, Equity and CA have maintained that the technology is safe, and is in use in several countries in the world. CA said in its response to Mr Murage’s suit that there are laws to protect the bank’s clients.
LAC filed the suit after the communications regulator advertised a tender for consultancy services to evaluate the performance and security of the thin SIM cards.
The tender bidding closed on November 12. The winning bidder will be expected to carry out the evaluation study for one year, but will also be tasked with developing standards on thin SIM cards in Kenya.
LAC’s executive director Gertrude Angote however believes the evaluation should have been done before authorising Equity’s bid to roll out the technology.
“There is real danger that unless this application is heard in a timely manner data on the primary SIMs of millions of mobile telephone customers including banks, utility companies and security agencies risk being compromised in an irreparable manner,” Ms Angote added.
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