The Telecom Regulatory Authority of India (Trai) has just implemented new requirements that banks in India must comply with. These regulations mandate digital consent for all commercial communications. Lenders have been spurred by this move to ask the government for clarification on whether disclosing transaction details—which is already done in accordance with Reserve Bank of India (RBI) guidelines—also requires digital consent. This regulation’s main goal is to prevent cyber fraud. In response to the finance ministry’s mandate from last month, banks have also asked for unique prefixes for client calls.
Trai’s Digital Consent Regulation
Customers’ digital consent is now required for all commercial communications, according a directive by the Telecom Regulatory Authority of India (Trai). This law is a component of a larger initiative to combat unsolicited commercial communications (UCC) and cyber fraud. According to the new criteria, all primary entities—including financial institutions—must gain new consents digitally, and consents received through other ways will no longer be acceptable.
Banks Seek Clarity and Special Prefixes
In response to these regulations, banks have reached out to the government to clarify whether digital consent is necessary for sharing transaction details. This inquiry stems from concerns about discrepancies between Trai’s new regulations and existing RBI guidelines. A bank executive noted, We have brought some issues to the government’s attention so that there is no discrepancy between existing regulations. The government’s aim is to curb cyber fraud, and issues around it need to be resolved for faster implementation.
Additionally, banks have requested special prefixes for numbers used to call customers. Currently, the 160 series is allocated for service calls made by entities regulated by financial sector regulators, including RBI, Sebi, and Irdai. Banks argue that obtaining digital consent annually is cumbersome and prefer a special prefix over a common series allocation.
Finance Ministry Directive and Implementation Challenges
The finance ministry issued directives to banks last month to stop sending unsolicited commercial communications (UCC) and to use the Digital Consent Acquisition (DCA) system in accordance with Trai rules. The directive seeks to guarantee adherence to Trai’s rules and expedite the procedure. Banks have called attention to the difficulties in putting these principles into practice, especially the requirement for yearly renewals of digital permission.
One banker commented, “Obtaining digital consent annually will be a cumbersome process, and banks will prefer a special prefix as opposed to a common series allocation.” This sentiment reflects the broader concerns within the banking industry about the practicality and efficiency of the new regulations.
Department of Telecommunications and Number Series Allocation
A distinct 10-digit numerical series, commencing with 160, was assigned by the Department of Telecommunications (DoT) in May for service and transactional calls made by governmental bodies, regulatory agencies, and financial institutions. The purpose of this allocation is to assist telecom users in identifying the calling party, the telecom provider, and the origin. The government is working to improve openness and lower the danger of cyber fraud, which includes the new numbering system.
Impact on Cybercrime and Financial Frauds
According to the latest government data, around 7 million mobile connections involved in cybercrime or financial frauds reported through digital intelligence platforms have been disconnected so far. This statistic underscores the severity of the issue and the need for stringent regulations to protect consumers and financial institutions from cyber threats.
Banks face a number of difficulties as a result of the new Trai requirement for digital consent for commercial communications. The goal of the regulation is to improve consumer protection and prevent cybercrime, but banks are having trouble putting it into practice. The industry’s worries over efficiency and compliance are shown in the requirement for yearly renewals of digital permission and in the request for unique prefixes for customer calls. It is unclear how these new restrictions will affect the banking sector and consumer protection as banks continue to press the government for clarification.
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