SIDBI teams up with IBA for preparing MSME credit scores

SIDBI teams up with IBA for preparing MSME credit scores

Small Industries Development Bank of India (SIDBI) is working with Indian Banks’ Association to get the member banks to provide borrower details so as to enable it to pull out alternate sources of data to come up with credit scores for MSME customers.

According to Sudatta Mandal, DMD, SIDBI, it will generate “fit” rank based on GST data, bank statements and income tax returns so as to get a proper credit score for MSME borrowers and enable them to avail a bank loan. SIDBI has collaborated with TransUnion Cibil and Online PSB Loans (OPL) for the same.

……………

To avert fraud, Govt allows banks to use face recognition, iris scan for some transactions

The Indian government is allowing banks to verify individual transactions that exceed a certain annual limit using facial recognition and an iris scan in some cases, in a bid to reduce fraud and tax evasion, three sources told Reuters.

A few large private and public banks have begun using the option, said one of the sources, a banker, who declined to name the banks. The advisory allowing the verification is not public and has not previously been reported.

The verification is not mandatory and is intended for cases where another government identification card used for tax purposes, the Permanent Account Number (PAN) card, is not shared with banks.

The prospect of banks using facial recognition has concerned some privacy experts.

“This raises substantial privacy concerns especially when India lacks a dedicated law on privacy, cybersecurity and facial recognition,” said Pavan Duggal, an advocate and cyber law expert.

The government has said it is targeting parliamentary approval of a new privacy law by early 2023.

The new measures can be used to verify identities of individuals making deposits and withdrawals exceeding Rs. 20 lakhs ($24,478.61) in a financial year, where the Aadhaar identity card is shared as proof of identify, said two government officials, who asked not to be named because the information is not public.