Big news for PAN card holders. The use of PAN cards in India has become not just an identity card but the biggest source of your financial information. But in recent times, its misuse has also been done on a large scale. Now the government has issued strict instructions, taking strict steps on this illegal use.

PAN card rules

According to many media reports, the Indian Cyber Crime Coordination Centre (I4C) under the Ministry of Home Affairs has ordered the immediate stop to the use of PAN cards of Indian citizens by financial technology companies and other consumer tech firms without permission. The government has taken this step to strengthen data security under the Digital Private Data Protection Act, 2023 (DPDP).

 

This service was known as “PAN Enrichment.” The service was primarily used by loan disbursement companies to create customer profiles and sell loans and other financial products. At times, this data was also used by customers to cross-check the information provided in the application form.

According to sources, in recent weeks, many illegal operations have been shut down due to the government’s crackdown on this service. According to three industry experts, many firms were using customers’ full names, addresses, phone numbers, and other personal information through PAN numbers. The data was obtained through the backend systems of the Income Tax Department. Since the PAN number is also linked to the credit score of the customer, this information has become very important for companies.

Illegal PAN card!

Sources said that this illegal service was being widely used by consumer credit platforms, loan sourcing channels, direct sales agents, and credit aggregators. But identifying specific companies using this service is challenging because it was part of their internal functions.

This action of the government is part of a larger campaign to end the illegal use of personal identifiable information (PII) by citizens. All such cases will be investigated once the data protection rules come into force. Under the DPDP Act 2023, companies have to obtain the right channels and proper permissions before processing any citizen’s information. Following the Aadhaar verdict by the Supreme Court, the government has started the process of strictly banning illegal access to any government database. Experts believe that these restrictions may also pose some operational challenges.

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