Expressing multiple concerns over proposed personal data protection bill, overseas fund lobby Asia Securities Industry & Financial Markets Association (ASIFMA), has written a letter to the MeitY.
ASIFMA, which represents the interests of foreign portfolio investors (FPIs), said that the new data bill would create more problems in the financial services sector.
The lobby group primarily marked categorisation of all types of financial information as sensitive data under the new law as one of the major concerns.
In data bill, financial data have been categorised as sensitive, which makes compulsory for all entities handling them have at least a copy of such data within India.
The sensitive data, such as details of ultimate beneficiaries or offshore banking accounts of FPIs, are stored in regional financial hubs such as Singapore and Hong Kong. With the implementation of data bill, it will be mandatory to store even a copy of these crucial FPI-related details, said ET report quoting the letter.
ASIFMA appealed that Financial services be excluded from the extra-territorial applicability.
Data collected offshore under offshore data protection legislation should, therefore, be excluded from the PDPB regime, it added.
The lobby group further raised concern over the consultations process. There is no clarity yet on consultations regarding the regulation of financial data, it said.
Foreign funds also expressed concerns over the broader definition of financial data under the new data law, which include any data showing the relationship between a financial institution and a person.
As per the lobby group, the data bill should be applied to entities, which process the data of Indians.
This is not the first such opposition to data protection bill.
Earlier, Internet and Mobile Association of India (IAMAI) had also asked for the removal of financial data from the ambit of sensitive personal data. Only data related to second-factor authentication may be made SPD, it had suggested.
The proposed data bill, for which MeitY had sought the second consultation in August, also was criticised by the US government and Telangana govt for trade distortive and may lead to hurt foreign investments.