The Indian government is curbing the unauthorized use of PAN details by fintechs and tech companies. This crackdown, part of a broader effort to enhance data protection, has disrupted some services that relied on unauthorized data access. The growing emphasis on compliance is aimed at safeguarding personal information according to the newly implemented DPDP Act of 2023.
The Government of India is taking measures to prevent unauthorized access to Permanent Account Number (PAN) details by technology companies, particularly in the fintech sector. This practice, referred to as ‘PAN enrichment’, allowed companies to create customer profiles for lending purposes by accessing sensitive information from government databases. In response, the government has initiated the closure of such unauthorized services, disrupting operations for several firms. While this shutdown is part of a broader strategy to safeguard personal data, it is likely to lead to temporary setbacks for many businesses reliant on these practices.
The Permanent Account Number (PAN) is essential for financial transactions and links to an individual’s tax records and credit scoring in India. Unfortunately, some companies have exploited backend systems from the Income Tax department to access sensitive customer information without proper authorization. Such practices have faced increased scrutiny following recent regulatory changes aimed at protecting individual privacy, including the Data Protection and Digital Personal Data Protection (DPDP) Act of 2023, which mandates consent for processing personal data.
The crackdown on unauthorized access to PAN details reflects the government’s commitment to enhancing data protection for Indian citizens. As firms navigate through these new regulations, the emphasis on compliance will ultimately contribute to a more secure digital environment. Ensuring that personal data is handled appropriately will safeguard consumer rights and build trust in the financial system.
Original Source: m.economictimes.com
Leave a Reply