Customer data with account aggregators safe in India: FM

NEW DELHI: Finance Minister Nirmala Sitharaman on Thursday assured that customer data shared with account aggregators (AA) is completely safe in India.

Concerned over the slow movement of the AA scheme, she said, “It is not as much as I would want to see. It can be better, which means either the building of awareness exercises are not sufficient, adequate” or there is a need for simplification of technology.

“Banks, both public and private, have reviewed it with me once. Banks have become a member or a part of this account aggregators working, and it has actually helped, “ she said at the ‘DATE with Tech’ event here.

She stressed that the enthusiasm of the banks has to be accentuated, only then that it will reach every customer.

Allaying concerns about data security, she said, “Initially, there were some apprehensions that possibly, account aggregators are going to sit over data bank. They cannot hold data. They are just a pass-through. Neither the beneficiary customer nor the bank can sit on it through the AA. They will deal with it only for the purpose of giving credit “.

AAs are entities that enable financial data sharing from Financial Information Providers (FIPs) to Financial Information Users (FIUs), based on the consent from the customers. Asked about what kind of assurance she can provide to customers, Sitharaman said the government’s approach in creating public platforms for banking facilities ensures customer data protection.

“The moment you agree to be willing to give it, it will be shared without much hindrance. On data protection, I can assure Indian citizens your data remains completely safe, “ she said.

Sitharaman also said there was a need to build awareness among people on cyber frauds and take the reins of technology in our hands to stop scamsters from gaming the system. The minister said to stop cyber frauds, where people are duped by way of a phone call or SMS, the government periodically reviews public sector banks, and regulator RBI reviews its own systems. Insurance companies also review their systems.

“We are constantly doing what is required…. Unless awareness, unless we are able to build that alertness in the mind of people that I should not go by anything that is said on my phone is built, citizens are at risk,” Sitharaman said.

She said at the micro level there is concern about people getting random calls putting them in a situation where they are getting trapped and as a result ending up losing money. “Those people who game the system probably are one notch ahead of us in terms of using and misusing technology. On that, there is a lot of work required. It is a never-ending game because technology is such an animal that keeps moving and racing much ahead of you. You have to be sure that you got the reins in your hand, “ Sitharaman said.

NBFCs must remain cautious on lending; need not go overbowled

The FM also said NBFCs and small finance banks need to remain cautious while lending as suggested by the Reserve Bank. She cautioned that NBFCs and small finance banks should respect the red line and should not go too far in their enthusiasm. “Enthusiasm is good but sometimes it becomes a bit too far for people to digest. So as a measure of caution the RBI has also alerted small finance banks, NBFCs to be careful that they don’t go too far too soon and face any downside risks later,’’ she said.