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.