The Supreme Court of India has issued a notice in a plea alleging violations of the right to privacy by four foreign credit information companies operating in India. The case is titled Surya Prakash v. Union of India and Others.
Response from the Court
Although no one appeared for the petitioner, a three-judge Bench consisting of Chief Justice of India (CJI) DY Chandrachud and Justices JB Pardiwala and Manoj Misra sought responses from several government ministries, including the Ministry of Finance, the Reserve Bank of India (RBI), the Ministry for Electronics & Information Technology, and the Ministry of Home Affairs. The Court also sought a response from the four foreign credit information companies involved: TransUnion CIBIL, Experian Credit Information Company of India, Equifax Credit Information Services, and CRIF High Mark Credit Information Services.
The Court has also appointed Advocate K Parameshwar as amicus curiae in the case. The petitioner appearing in person will be informed of this order.
Allegations of Privacy Violations
The petitioner claims that these four credit information companies are violating individuals’ right to privacy by collecting, capturing, storing, maintaining, and processing confidential and sensitive financial data, as well as banking details of consumers, without their consent. These actions are said to be in violation of the Credit Information Companies Regulation (CICR) Act, 2005.
“Armed with the Credit Scores & Credit history the Respondents 5, 6, 7 & 8 completely dominate & control the entire Indian Banking ecosystem, literally deciding who should get all the Credit Facilities & who should not. Citizens who get low credit scores “are Financially Paralyzed for their entire lives thus making them incapable to achieve anything worthwhile in their entire lives and literally killing millions of honest struggling business entrepreneurs. This does not augur well for the benefit of the citizens & our country at large,” the petition stated.
The plea argues that these companies, in collusion with the RBI and central ministries, are committing blatant violations of the right to privacy of more than one billion individual private citizens and all business organizations operating in the country. It is further claimed that the principle of data localization is being violated, as the computer servers and data storage systems of these companies are located outside India.
Impact on Citizens and Business
The petitioner argues that these companies, after collecting sensitive data from banks, financial institutions, and other sources without customers’ knowledge or forced consent, package and sell this confidential information to their members, lending institutions, and the general public for profit. This is said to create a “parallel underworld economy” based on credit scores and credit histories created by these companies. The petitioner also highlights the unethical business relationship between these companies and entities like Bank Bazaar, Paisa Bazaar, My Loan Care, Loan Adda, and Credit Mantri. It is claimed that these companies dominate and control the Indian banking ecosystem, deciding who should receive credit facilities and who should not. Citizens with low credit scores are financially paralyzed, impacting their entire lives and hindering honest struggling business entrepreneurs.
Relief Sought
The petitioner seeks directions from the Court to the RBI and the concerned ministries to regulate data sharing by these companies and ensure their compliance with the CICR Act, 2005. The petitioner also requests the Court to address the issue of credit scores and credit history being used to pass judgment on citizens and discriminate against them based on creditworthiness. The petitioner argues that this practice hampers the progress of individuals and the country as a whole.
