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CBI has successfully investigated a fraud in UCO Bank where two support engineers manipulated the system which resulted in credits to accounts without a corresponding transfer of money from the sending bank to the receiving bank.

See report in NewIndian Express

The fraud involved 8.53 lakh transactions resulting in credit to the accounts of customers. Some of them either knowingly or unknowingly withdrew the amount. Most of the amount has since been recovered.

However the incident which could be a sophisticated fraud or a technical glitch needs to be taken seriously by security experts and remedial measures are required to be taken.nt.

If the fraudsters had later withdrew the money and transferred it into the fraudster’s account as it happens in many phishing credits, the account holder would be accused of money laundering and his account would be frozen even if the balance is more than the disputed amount. In many such instances, innovent customers are left with frozen accounts for reasons they are not aware of.

One reason why even genuine customers may not be able to recognize the wrong credit is because today’s technology bankers donot provide full description of the transactions in the account. They only provide a transaction code which only they can decypher. It is important that as in the manual banking era, the description of credit has to indicate the source account number and name of the sender along with any purpose indicated by him all of which are captured at the sender’s end.

The least the Banks can do is to ensure that if the recipient clicks on the credit entry, the transaction ID should be deciphered and the details provided without the need to raise any help ticket.

RBI should work on this technology change to prevent blaming the genuine customers who without knowing the nature of the false credit may withdraw the money in due course.

I request REBIT to work on this updation of Banking software in consultation with the CBS software developers.

This incident falls within the “Jago Regulator Jago” campaign that we are highlighting since it has become a fashion to introduce technology with inadequate securities and then blame the public for the consequences.

It is an established principle of law that if the Bank customer has innocently altered his position with the knowledge of the balance in his passbook, the money can only be recovered without coercion. If the amount is in several lakhs it may be possible for the customer to realize that it was an erroneous credit. But if it is in few thousands, many customers may not think it is a wrong credit. They may think that it may be an arrears of pension or some thing similar. Hence it would be wrong to blame them for misappropriation if they have withdrawn the balance. In such cases thee “Negligence” of the Bank should be punished. If any account has been frozen in such cases, compensation should be paid to the customer for inconveniencing him.

If any cheques are dishonoured in the process, it has to be considered as “Wrongful Dishonour” and Bank should pay compensation.

Hope RBI makes necessary changes in this regard to the Account rules.

Naavi

DPDPA 2023 has introduced “Nomination” as a right of a data principal. We have in our two previous articles discussed certain aspects of nomination.

Why Privacy cannot survive the death of an individual?

Relationship between IPR and Privacy

It is now observed that “Digi Locker” has already introduced the system of “Nomination” for its application. While the Digi Locker mobile has a “privacy Policy” which does not seem to have been updated since March 14, 2017, but refers mostly to the Digit Locker portal, the privacy policy on the website is undated . There is no reference to the “Nomination” in the Privacy Policy or the Terms and Conditions. However,nomination has been introduced as a new link in the App some time back.

The nomination link leads to a form which collects the Name, e Mail address, Mobile number and the Aadhaar number of the nominee.

Digilocker being an entity of the MeitY, this method may be considered as a “Precedence” for other Data Fiduciaries to collect nomination.

This however raises two issues.

Firstly the issue is whether Digi Locker should have provided for collection of Virtual Aadhaar number instead of original Aadhaar number .

Secondly like in the True Caller case, it is a moot point whether the Digi Locker owner/registrant has the right to disclose the aadhar number of the nominee. Possibility of stretching the non applicability clause in DPDPA 2023 for “Personal Domestic use” to the declaration of the nominee’s information is also a matter to be explored.

It is noted that there is no notice to the nominee that he is being designated as the nominee and that his personal information has been provided to Digi Locker. There is not even a request for OTP from the nominee so that he remains informed.

Under DGPSI, if a similar system has to be introduced, it is recommended that only the e-mail and mobile number of the nominee may be collected and the request for Virtual Aadhaar has to be sent by Digilocker directly to the nominee. The disclosure of the e-mail address or mobile number is less sensitive and the notice may perhaps be considered as a reasonable compliance to the use of these identity parameters.

A better technical method would be for enabling a real time check for permission to be recorded as a nominee at the time of registering the nomination through an API which can be initiated by the registrant without revealing the email address or mobile number to the service provider. On receipt of permission, the service provider may initiate the identity verification process by directly contacting the nominee for the virtual aadhaar or any other means such as the OTP. In the meantime the nomination request may be kept pending.

A sample nomination form has been created for FDPPI which incorporates the definition of the role of a Nominee and his relationship with FDPPI. This is an important Jurisprudential observation and open for debate .

(Comments welcome)

Naavi

One of the requirements of DPDPA 2023 as a law of Digital Personal Data Compliance is that Personal Data shall be processed only for lawful purpose. Hence it is a compliance requirement that a Data Fiduciary shall adopt necessary measures to ensure that all their employees remember that “Making Profits” is only a goal secondary to “Being Lawful”.

In terms of compliance the Board should establish the norm through a resolution mandating DPDPA 2023 compliance that the organization shall take such measures as are required to be compliant with all laws of the land in their activities.

At the operational level, the compliance specification would require that all “Project Managers” who prepare new project proposals whether in Business, R&D, Finance etc., shall add an assurance that the “Project proposal is within legal boundaries of all applicable laws”.

For this purpose adherence to laws such as the ITA 2000 becomes mandatory for compliance of DPDPA 2023. If the new IPC (Bharatiya Nyaaya Sanhita 2023) or Telecom Act or the new Evidence Act (Bharatiya Nyaaya Adhiniyam) has any provisions applicable to Digital personal data, they shall also be complied with as part of DPDPA 2023 compliance.

Naavi

DGPSI or Data Governance and Protection Standard of India is an approach that follows the principles of compliance that is indicated in the DPDPA 2023.

Compliance to DGPSI means not only being in compliance with DPDPA 2023 but also to ITA 2000 as well as the BIS standard for Data Governance.

Just as Lord Rama is a symbol of Good Governance , DGPSI endeavours to be the symbol of a Good Compliance Framework that towers over other compliance frameworks.

Our next physical program is at Pune on 6th January 2024.

Watch out for DGPSI training sessions at your city or online. Contact FDPPI at fdppi4privacy[@gmail.com]

Naavi

We wish all the visitors of Naavi.org a very happy and prosperous new year. At the same time we welcome the emergence of the Ayodhya Rama Mandira to be in Bharat.

In the last few months of 2023 we saw a spate of new laws being passed including DPDPA 2023 which is of direct interest to the Data Protection community. The new Criminal Code, IPC and Evidence Act also are very significant and are connected with DPDPA 2023 and ITA 2000. Probably we may see in 2024, rules of DPDPA 2023 being notified, new ITA 2000 being introduced and many other laws such as the Broadcast Bill being passed. Let us watch the legal space as it develops.

Naavi

The Discussion on “Nomination” gave rise to a debate on Linked In why we should consider that the “Right to Privacy” is only for living persons. I would like to explore this further.

DPDPA 2023 is not specific about whether the Act applies to only living persons like what GDPR has stated. The reason is that DPDPA 2023 is not a “Privacy Protection Legislation”. It is only a “Digital Personal Data Protection” regulation. Hence there was no need to clarify this point.

DPDPA 2023 expects that data needs to be protected under the CIA concept. This responsibility starts from the collection as a “Fiduciary” and continues until the data is effectively given back to a legal heir of the deceased. DPDPA 2023 imposes additional obligations such as “Notice”, “Consent”,”Data Breach Notification” etc. which also the Fiduciary has to fulfill.

Notice and Consent are obligations to the Data Principal while data breach notification is an obligation for the regulator and the data principal. The Notice and Consent are relevant only if there is a living being to whom the notice can be given and consent obtained. If the individual who can give his consent is not alive, no consent can be given. Hence this right has to be considered as extinguished on the death of the data principal.

What survives after the death is a need to dispose of the property of the deceased that the “Fiduciary” obtained on trust for a certain purpose. During the lifetime of the individual he had the right of withdrawal of the consent and death snatches away this right. Hence the permission granted while the right to withdraw consent was available becomes infructuous on the death of the data principal.

Now coming to the “Right of Nomination”, it is the desire of the data principal expressed during his life time but exercisable only after the death. It is therefore a complex thought that has an inherent contradiction that has to be sorted out by a Jurisprudential thought process.

To be consistent with the ITA 2000 which does not recognize any electronic document of the nature of a testate document and assuming that it is impractical to get written paper nomination in the digital personal data scenario, we need to give an acceptable meaning to the word “Nomination”.

If we consider “Nomination” as a “Transfer of right in a property”, it contradicts ITA 2000 (in electronic form). On the other hand, it is a burden for the data fiduciary to obtain paper instruction for nomination nor implement a claim settlement.

The legal status of “Nomination” is that it is a method to transfer the responsibility of disposal of property to the legal heirs through an intermediary who is trusted by the erstwhile property owner. Just as a Will provides a “Executor” of the will who is a trusted person of the deceased when he was alive the power to collect, encash and distribute the property to the legal heirs, the Nominee is expected to discharge a similar responsibility. This responsibility has two steps. First is the taking custody of the property without doing anything else with it such as encashing it. Second is encashing it.

In the digital personal data scenario where “Nomination form” is not a “Will” and “Nominee” is not an “Executor” of the Will, we must recognize only a limited responsibility for the nominee to take custody of the property without discharging any responsibility other than safe custody. He may have to send a suitable notification to the legal heirs to take over the property with rights of further disposal including monetization.

In summary, the jurisprudence that develops out of this chain of thoughts is

1. Nomination is indicating the choice of the data principal while he was alive of to whom his property should be given for safe custody after his death. This indicates that the permission given for processing to the data fiduciary is terminated and it has to be safely handed over to the nominee.
2. The Nominee cannot further instruct for continuation of the processing or monetize the data in any other form.
3. The nominee as a “Trustee” similar to the “Executor” of the will has the responsibility to find out the legal heirs and transfer the digital property to them.
4. Just as an executor is entitled to cover his expenses for discharging his duties, the nominee can recover costs if any from the legal heirs.

In case of a will, Courts can grant a “Letter of Probate”. At present there is no equivalent document that can be called a “Letter of Administration of digital personal data issued by any judicial authority”.

A jurisprudential advise in this regard is that the Data Fiduciary shall issue a “Letter of Administration of Nomination” to the nominee which entitles him to contact the legal heirs and dispose of the property. It should be his discretion to approach a Court and validate the “Letter of Administration of Nomination” with a civil court and convert it into a “Letter of Probate” like document.

This would be a suggestion in the DGPSI toolkit by Ujvala Consultants Pvt Ltd.

It would be good if the MeitY incorporates such thoughts in the form of its own rules. Once the full set of rules are released by the MeitY, Naavi will release a toolkit for compliance of DPDPA 2023 based on DGPSI framework in which such thoughts would be included.

In the meantime, comments are welcome.

Naavi