Former Deputy Governor of Reserve Bank of India (RBI) R .Gandhi on Tuesday said banks and financial institutions, especially payment sector entities, were concerned about data localisation requirements.

Mr. Gandhi, who inaugurated an international conference on Identity, Security and Behaviour Analysis (ISBA 2019) here, said this, pointing to the ban proposed on cross-border transfer of sensitive data, which was likely to include passwords and financial data. Banks and FIs outsourcing processing of their data were “now a worried lot” because of the proposed ban.

They, more specifically the payment sector entities, were concerned about the data localisation requirements, he told the three-day conference organised by the Institute of Development and Research in Banking Technology (IDRBT).

Great uncertainty

The former RBI Deputy Governor referred to the proposed ban, even while citing how there was “great uncertainty, confusion and reluctance” on the part of banks and FIs to use biometrics as the basis for identifying individuals in the wake of the Supreme Court order in the Aadhaar case. “Several fintech companies have to redraft their business models because of this. Their cost of operations has tremendously increased consequently, affecting their profitability and threatening their existence,” he added.

Mr.Gandhi and former Governor of RBI Y. V. Reddy, who participated in the inaugural session of the conference, launched IDRBT’s Journal of Banking and Financial Technology, co-published in association with Springer; and a ‘Blueprint of Blockchain Platform for Banking Sector and Beyond’ brought out by the institute.

IDRBT Director A.S.Ramasastri said for the Institute, set by RBI, 2019 was a special year as it marked the beginning of its silver jubilee celebrations.