DATA LOCALISATION IS GOOD BUT NEEDS DISTINCTION-CAIT CAIT HAS SOUGHT PM’s INTERVENTION

In the wake of crucial issue of “data localisation” wherein the Reserve Bank of India has directed the Companies, Banks & other Institutions conducting activities in India to store their respective data secured from India within the Country, the Confederation of All India Traders (CAIT) has sought intervention of the Prime Minister to make distinction between such Companies or Institutions those who have real time data and others who use primary data for making transactions to happen.

While extending its support to the Government and the RBI on its bold move towards protecting Indian citizens’ data and privacy by ensuring the data is stored within infrastructure in India, the CAIT has said that  it will go a long way in moving India towards a data driven economy and the possibilities of misuse or unauthorised usage of data will be minimised.

The CAIT has also sent copy of PM’s letter to RBI Governor, Finance Minister Shri Arun Jaitley, Minister for IT Mr. Ravi Shankar Prasad, BJP President Shri Amit Shah & others.

At a Press Conference held today at New Delhi, CAIT Secretary General Mr. Praveen Khandelwal said that in his communication to Prime Minister it is said that large variety of Institutions secure data for various purposes and therefore some sort of distinction needs to be made among such Companies or Institutions. Same Yardstick can not be applied for one and all in the larger interest of economy. Therefore, there is a need of a distinction to be made between entities which have access to personal data and those who use the data only for enabling commerce through activities for example like payments.

In our considered view digital platforms (like Facebook, Amazon, Google etc) and Banks have access to personal consumer data such as name, address, contact details and other such know your customer ( KYC) data. This is used by entities above to provide their services. Such data should necessarily be stored in India to prevent any misuse, including for political purposes.

On the other side there are various Companies particularly the payment technology companies (Visa, Mastercard, RuPay) which only have a 16 digit card number which is stored with them, and as such that is not personally identifiable data and should not be forced to be stored in India, as it does not serve any purpose with regards to law enforcement, or misuse.

Mr. Khandelwal said that we have been strongly driving “digitization of payments” as an agenda for our small traders over the last five years. T Any move now to localize this payments data will nullify all of our efforts made over the past, and also bring in added risk and weaken the trust of our community with regards to digital trade. We would also like to state on record that such a move will cut us off from global fraud and security systems, which have provided immense value to our small traders by offering services like chargebacks, safety checks etc. which prevent any fraudulent transaction.

The concept of data localization is also concerning to us from a payments technology standpoint, as the same has been promoted in the draft data privacy bill and the earlier ecommerce policy.

The CAIT has urged the Prime Minister to ensure data localization is enforced strongly for banks and digital platforms and not towards financial data, which should not be classified as sensitive data, as that will also severely limit the development of the Indian fintech companies, along with the broader payments ecosystem.