Indian Banks

Indian Banks to use Face Recognition soon!

Finance Technology

In an effort to cut down on fraud and tax evasion, the Indian government is allowing banks to check individual transactions that exceed a specific annual limit using facial recognition technology and, in some situations, an iris scan.

One of the individuals, a banker, declined to identify the institutions but claimed that a few significant private and public Indian banks have started using the option. The verification-enabling advisory is private and hasn’t been previously publicised.

The Permanent Account Number (PAN) card, another government identification card used for tax purposes, is not shared with banks in some circumstances, therefore the verification is optional and only used in those situations. Some privacy experts are concerned about the possibility of banks utilising facial recognition. The lack of a specific rule on privacy, cybersecurity, and facial recognition in India presents serious privacy problems, according to advocate and cyber law specialist Pavan Duggal.

A new privacy law is expected to receive legislative approval by the beginning of 2023, according to the administration.

Two government officials who asked not to be identified because the information is private claimed that the new methods can be used to authenticate the names of those making deposits and withdrawals totaling more than Rs 2 million in a fiscal year. An individual’s fingerprints, face, and eye scan are linked to a unique number on the Aadhaar card.

In response to a letter from the Unique Identification Authority of India (UIDAI) that suggested verification be done through facial recognition and iris scanning, especially where fingerprint authentication of an individual fails, India’s finance ministry asked banks to take “necessary action” in December.

A consent framework for the verification is not mentioned in the letter from the UIDAI, which is in charge of issuing Aadhaar cards. Furthermore, it doesn’t specify what steps banks may take in the event that a client objects.

In response to questions from Reuters, a UIDAI spokeswoman stated that Aadhaar verification and authentication only take place with the user’s express agreement. According to him, using biometric verification that is based on an Aadhaar helps prevent potential exploitation. The most recent advice comes in response to a government directive from the previous year that required referencing an Aadhaar card or PAN number for deposits or withdrawals over 2 million rupees in a fiscal year. Inquiries for comment were not answered by the federal finance ministry.