The Indian authorities is permitting banks to confirm particular person transactions that exceed a sure annual restrict utilizing facial recognition and an iris scan in some circumstances, in a bid to scale back fraud and tax evasion, three sources instructed Reuters.
A number of giant non-public and public banks have begun utilizing the choice, mentioned one of many sources, a banker, who declined to call the banks. The advisory permitting the verification will not be public and has not been beforehand reported.
The verification will not be obligatory and is meant for circumstances the place one other authorities identification card used for tax functions, the Everlasting Account Quantity (PAN) card, will not be shared with banks.
The prospect of banks utilizing facial recognition has involved some privateness consultants.
“This raises substantial privateness issues particularly when India lacks a devoted regulation on privateness, cybersecurity and facial recognition,” mentioned Pavan Duggal, an advocate and cyber regulation knowledgeable.
The federal government has mentioned it’s concentrating on parliamentary approval of a brand new privateness regulation by early 2023.
The brand new measures can be utilized to confirm identities of people making deposits and withdrawals exceeding Rs. 2 million in a monetary yr, the place the Aadhaar identification card is shared as proof of identification, mentioned two authorities officers, who requested to not be named as a result of the data will not be public.
The Aadhaar card has a singular quantity tied to a person’s fingerprints, face and eye scan.
India’s finance ministry in December requested banks to take “needed motion” on a letter by the Distinctive Identification Authority of India (UIDAI), which steered verification needs to be finished via facial recognition and iris scanning, particularly the place fingerprint authentication of a person fails.
The letter from the UIDAI, which is answerable for Aadhaar card issuance, makes no point out of a consent framework for the verification. Nor does it say that banks can take any motion if a buyer refuses.
Responding to Reuters’ queries, a UIDAI spokesperson mentioned Aadhaar verification and authentication occurs solely with the express consent of the person. Use of Aadhaar-based biometric authentication helps in guarding in opposition to potential misuse, he mentioned.
“UIDAI recurrently advises all authentication and verification entities to make use of face or iris authentications to cater to residents whose fingerprint authentication fails.” He added that authentication and verification doesn’t imply storing of information.
The most recent advisory follows a authorities order final yr that mandated the quoting of an Aadhaar card or PAN quantity for making deposits or withdrawals exceeding Rs 2 million in a monetary yr.
The federal finance ministry didn’t reply to requests for remark.
© Thomson Reuters 2023