In today’s world, most financial companies keep the details of their customers with them and this includes details like Aadhaar and PAN card. Although these companies claim that these have not been used in an unauthorized manner, many times such cases have come to light in which these details have been used. In such a situation, the government is very alert towards this and can take action against these companies.
The government gave these instructions
The government has planned a major action on the unauthorized use of PAN details. The Indian Cyber Crime Coordination Center (I4C), working under the Union Home Ministry, has given some instructions to financial technology companies and other consumer technology firms for this. The government has said that these companies cannot use the Permanent Account Number (PAN) details of Indian citizens in an unauthorized manner. The government has implemented the Digital Personal Data Protection Act, 2023 (DPDP) and has initiated strict action against technology companies for the unauthorized operation of personal data.
What do the companies do?
A top executive of a fintech firm told the media that it was known as the ‘Pan enrichment’ service. It will help loan distribution companies create profiles of their customers based on their PAN numbers for cross-selling credit and other financial products. They further said that sometimes this data is also used by customers to cross-check the details given in their application. However, this service has changed due to the new rules of the government.
Action on misuse of PAN card
Some Media reports have revealed that many firms have accessed the personal information of customers, such as their full name, address, phone number, etc., using their PAN number from the backend system of the Income Tax Department. Also, the connection of PAN numbers with consumer credit scores makes it important data. Although this is not a data breach, it points to unauthorized access to the back-end infrastructure of the Income Tax Department.
In such a situation, this unauthorized access was used by different financial companies, including lending platforms, loan-sourcing channels, direct sales agents and credit aggregators. Under the DPDP Act of 2023, businesses must obtain appropriate consent and use authorized channels while processing citizens’ information. Now these companies will not be able to access this information directly from the Income Tax Department.