Be conscious of data privacy and cybersecurity issues, State Bank of India MD Chaudhary tells MFIs

Posted on by

Micro finance Institutions (MFIs) need to pay special attention to data privacy and cyber security issues as they deal with large volumes of customers’ data, SBI MD Alok Kumar Choudhary said on Wednesday.

This is necessary even as these institutions should continue to march ahead in their digital journey, Chaudhary said at the Sa-Dhan-organised national conference on financial inclusion. 

Chaudhary highlighted that some kind of action plan needs to be in place to address the cybersecurity and privacy issues on customers’ data. 

“What is very important is the integration with the evolving regulation particularly when you have a data privacy law. The enormous amount of data which has been handled by all the MFIs, this particular aspect (data privacy) requires attention and some kind of action plan needs to be in place,” he said. 

“Financial education”

He also underscored the need to move away from financial literacy to “financial education”, noting that the financial education of the people on the ground is more important.

“We need to get out of financial literacy now. Financial literacy has no role. It’s not merely financial education of people but it should be financial education of people who deliver the services on the ground that are more important”, Chaudhary said. 

He highlighted that there is huge fiduciary responsibility for the banks and MFIsthat is why compliance with regulations needs to be understood thoroughly.

Without going into the numbers, Chaudhary said that SBI has a significant credit line to MFIs as well as to NBFCs that are trying to foster financial inclusion.

On SBI’s participation in the government’s financial inclusion drive, Choudhary said that SBI alone accounted for 36 per cent of the total accounts opened under the Pradhan Mantri Jan Dhan Yojana.

Under PMJDY, more than 50 crore bank accounts have been opened and the outstanding deposits in these accounts stood at over ₹ 2.03 lakh crore.

in the case of Atal Pension Yojana, SBI has enrolled 32 per cent of the total subscribers under the scheme. As of the end October, APY had 5.10 crore subscribers.