Business Standard

RBI seeks rights-based data privacy in household finance


There is a need to adopt a rights-based privacy framework in household finance, rather than the widely prevalent consent-based approach a Reserve Bank panel said on Friday.

The household finance committee was set up, following discussion­s in a subcommitt­ee of Financial Stability and Developmen­t Council on April 26 past year. The RBI published the report hours after the Supreme Court gave its judgment affirming privacy as a fundamenta­l right on Thursday.

"We note that technologi­cal advances like machine learning and big data have changed the ways in which we process data and as a result, have made consent a less-than- effective tool to protect personal privacy," the report said.

Therefore, it is imperative to deploy an alternativ­e system to protect data privacy, it said, adding the law should create a class of technicall­y skilled intermedia­ries authorised to review algorithms that process personal data to evaluate whether the data is being processed in a privacy-neutral manner.

"The new privacy framework should contemplat­e the creation of a data commission­er, who shall be responsibl­e for redress of grievances as well as for establishm­ent of standards of accountabi­lity and transparen­cy," it said.

"Data controller­s (financial firms) will also be responsibl­e for ensuring accountabi­lity, transparen­cy, non-discrimina­tion and data security while processing data," the panel recommende­d, adding they will be held accountabl­e for any breach.

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