The Indian government is allowing banks to verify individual transactions over a certain annual limit using facial recognition and in some cases iris scans in a bid to reduce fraud and tax evasion, three sources told Reuters.
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Some large private and public sector banks have started using the option, said a banker, who declined to name the banks. The advisory allowing verification is not public and has not been reported earlier.
The verification is not mandatory and is intended for cases where another government identity card, Permanent Account Number (PAN) card, used for tax purposes, has not been shared with the banks.
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The prospect of banks using facial recognition has some privacy experts worried.
“This raises privacy concerns especially when India lacks a dedicated law on privacy, cyber security and facial recognition,” said Pawan Duggal, an advocate and cyber law expert.
The government has said it is targeting parliamentary approval of a new privacy law by early 2023.
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The new measures could be used to verify the identity of individuals making deposits and withdrawals of more than 20 lakh rupees ($24,478.61) in a financial year, where proof of identity is required, said two government officials who spoke on condition of anonymity. Aadhaar ID card is shared as Because the information is not public.
Aadhaar card contains a unique number linked to a person’s fingerprints, facial and eye scans.
In December India’s Ministry of Finance asked banks to take “necessary action” on a letter from the Unique Identification Authority of India (UIDAI) which suggested that verification should be done through facial recognition and iris scanning, especially Where fingerprint authentication of a person fails.
The letter from UIDAI, which is responsible for issuing Aadhaar cards, makes no mention of the consent framework for verification. Nor does it say what action banks can take if a customer refuses.
The latest advisory follows a government order last year making it mandatory to quote Aadhaar card or PAN number for deposits or withdrawals of more than Rs 2 million in a financial year.
The UIDAI and the finance ministry did not respond to requests for comment.
The text of this story is published from a wire agency feed without any modification. Only the headline has been changed.
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