NASSCOM complained Government’s New IT Rules to Adversely Impact Indian IT-BPO Industry

The industry body for software and services companies, NASSCOM disapproved of the new IT rules 2011, notified by the Indian government mentioning that the new rules will adversely impact the $76-billion Indian IT-BPO industry. According to NASSCOM, the new rules will impact a large number of BPOs that collect credit card or financial information from companies and individuals in US or Europe on behalf of banks like UBS, Wachovia, Wells Fargo and others.

The new section 43A of the Indian IT Act, notified in April 2011 specified that a corporate will have to obtain permission through letter or fax or email from each client before collection of sensitive information. BPOs will thus have to inform the client regarding purpose of usage before collection of such information, if they go by the new IT rules 2011.

Sensitive personal information refers to financial details related to bank account, credit card or other payment instruments. Sensitive information also refers to physical, physiological and mental health condition, medical records and history. All medical transcription firms operating out of India are required to have access to medical records of patients in US.

Nasscom complained about the new intermediary rules on behalf of Data Security Council of India ( DSCI) a non profit body under it. Under the new rules, websites would have to take down content within 36 hours, if an affected party complains in writing or through email signed with electronic signature.

Nasscom complained that it would put a lot of burden on the intermediaries, many of whom are its members. The government mandated that a grievance officer be appointed by internet companies to take care of complaints if a user's personal info has been misappropriated in cyberspace, or his reputation has been harmed. Nasscom's member companies however want to put the onus on the government.

Nasscom suggested that the government should instead appoint a designated officer who should notify intermediaries of such objectionable information. Private companies have gone into a tussle with the government on the new rules.