Indian Banks Plan to Use Face Recognition and Iris Scan for Some Transactions From 2023
According to primary sources, the Indian government is allowing banks to verify individual transactions that exceed a certain annual limit using facial recognition and, in some cases, an iris scan in an attempt to reduce fraud and tax avoidance.
As per one of the sources, a bank teller who declined to be identified, a few large private and public banks have begun to use the option. The verification new guidance is not public and has not initially been disclosed.
The verification is voluntary and is aimed at situations in which another government identity card, the Permanent Account Number (PAN) card, is not shared with financial institutions.
The idea of banks largely using facial recognition has concerned some privacy experts.
Pavan Duggal, an advocate and cyber law expert said, “This raises substantial privacy concerns especially when India lacks a dedicated law on privacy, cybersecurity and facial recognition,”
The government has declared that it hopes to have new privacy rules approved by parliament by early 2023.
Thus according to two government officials who asked not to be identified because the information isn’t really public, the new measures can be used to verify the identities of individuals making deposits and withdrawals exceeding Rs. 2 million in a fiscal year, where the Aadhaar identity card is shared as proof of identity.
The Aadhaar card contains a unique number that is linked to a person’s fingerprints, face, and eye scan.
In late December, India’s finance ministry directed banks to take “necessary action” in response to a letter from the Unique Identification Authority of India (UIDAI) going to recommend that verification be done through facial recognition and iris scanning, particularly when fingerprint authentication of an individual fails.
The newest advisory reveals a government order issued last year requiring the use of an Aadhaar card or PAN number when making deposits or withdrawals in excess of 2 million rupees in a fiscal year.
Requests for comment were not returned by the federal finance ministry.
© Thomson Reuters 2023