Action Will Be Taken Against Those Misusing PAN

Action Will Be Taken Against Those Misusing PAN

Many financial companies claim they do not misuse customers' PAN and other data. However, instances of misuse have surfaced several times. The government has now decided to take strict measures in such cases. Under the Ministry of Home Affairs, the Indian Cyber Crime Coordination Center has issued strict instructions to fintech companies and other online technology platforms on this matter.
The government has implemented the Digital Personal Data Protection Act, 2023 and has started taking strict actions against violating fintech companies. These companies must now obtain explicit consent from citizens when accessing their personal information.
This data is often used by financial companies, including lending platforms, loan sourcing channels, direct sales agents, and credit aggregators. Known as "PAN Enrichment Services," these companies use customers' PAN numbers to build profiles for granting loans and other financial products.

Collection of Customer Details by Income Tax Department
Some companies access customer information, including full name, address, and phone number, through the Income Tax Department’s banking systems using PAN numbers. While this may not be data theft, it shows that these companies have unauthorized access to banking infrastructure.
Increased Strictness After Aadhaar Ruling
Following the Supreme Court’s decision on Aadhaar, the government has tightened restrictions on access to government databases. Experts believe that while this may pose operational challenges, these steps will help align with future data protection regulations.