Hacked PM seeks Stronger IT Laws

India's Prime Minister Singh Seeks Stronger Data Privacy Laws

June 29 (Bloomberg) -- India's Prime Minister Manmohan Singh called for changes in the country's laws to strengthen data privacy and make breaches a punishable offence after a U.K. newspaper reported bank account details were sold for cash.

``Indian professionals have built for themselves an enviable global reputation through hard work, dedication and commitment and the occasional misguided acts of some individuals should not be allowed to damage the high reputation of all professionals,'' Singh said in a statement issued today, after a meeting to review steps to deal with cyber crimes.

Changes in the law may strengthen the protection of data and help Indian investigative agencies to convict people accused of misusing data at a faster pace, easing concerns about security at Indian customer contact centers that threatens to derail one of the nation's fastest growing industries.

``We will need to put in stronger methods to prevent such things,'' said Raman Roy, who founded Spectramind eServices Pvt., a customer contact center that was acquired by Wipro Ltd. ``There are enough laws but the cycle time for conviction is long. If there was a separate data protection law, it could make it shorter, faster and more robust.''

Kkaran Bahree, a former employee of a call center, allegedly sold personal information, including bank account and credit card details, of 1,000 customers of HSBC Holdings Plc, Barclays Plc and Lloyds TSB Group Plc to an undercover reporter of the U.K's Sun for $5,000.

The sting operation came after former employees of Mphasis BFL Ltd.'s call center unit in Pune were accused of stealing as much as $300,000 from customers of Citigroup Inc, the world's biggest financial services company. They have been arrested and are being tried.

Employee Database

Kiran Karnik, president of the National Association of Software and Service Companies, or Nasscom, said the grouping will build a database of employees in the nation's call center and transaction processing industry to ensure quality standards.

``India's brand equity in this area is very strong,'' Karnik said in a statement. ``The recent incident may well have been a sting operation directed to give Indian industry a bad name against the background of its growing competitiveness.''

Export revenue from the Indian call center and transaction processing industry is forecast to quadruple to $21 billion by 2009 from $5.2 billion in the year ended March 31, according to a 2002 study by McKinsey & Co. for Nasscom.

Under the Information Technology Act, 2000, Bahree, if found guilty, could be jailed for three years and be asked to pay a fine of 200,000 rupees ($4,600), said Pavan Duggal, managing partner of New Delhi-based law firm Pavan Duggal & Associates.

In addition, Bahree may face charges of cheating, theft and breach of trust under the Indian Penal Code, Duggal said.

The Indian government in January set up a committee to look into changes in the Information Technology Act.

To contact the reporter on this story:
Saikat Chatterjee in New Delhi at schatterjee4@bloomberg.net.