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DPDP Insights › Banking, financial services and insurance › HR department

Banking, financial services and insurance

DPDP for the HR department in BFSI

HR holds staff, candidate and background-check data.

Open this seat in the interactive tool

What is different here

You hold identity, money and sometimes health data, and you already answer to RBI, SEBI or IRDAI. DPDP does not replace that supervision. It adds one new thing: each customer can now ask you directly what you hold, who you shared it with, and complain if the answer is poor.

The first four things to sort out

  1. Give staff a privacy notice.
  2. Limit access to staff accounts.
  3. Set retention for ex-staff files.
  4. Check background-check vendor contracts.

A worked example: Background check vendor sends reports by email

  1. Day 1HR notices reports arrive unencrypted.
  2. Week 1A secure portal is set up.
  3. Week 2The contract is updated.
  4. AfterOld reports are deleted.

Evidence kept: Contract; Portal setup; Deletion.

Sensitive reports need a secure route.

What others in the sector usually do. Staff account marking in core banking is now common.

Where it usually goes wrong, by organisation type

Organisation typeHotspots
Scheduled commercial bankCross-selling insurance and mutual funds on account terms; Business correspondent devices and paper forms in villages; Old core banking archives with no deletion path
Co-operative bank (urban or rural)Vendor-run core banking with admin access from the vendor's office; Member and share registers kept on open shelves; Directors and staff who are also members and relatives of borrowers
NBFC and digital lenderApps asking for contacts, photos and call logs; Collection agents sharing borrower details with family or employers; Leads bought from aggregators with no consent record
Insurance company (life, general or health)Medical reports passed to TPAs and hospitals by email; Agent and broker access to policyholder data; Claims data kept long after the claim is closed
Broking, depository and wealthAuthorised persons with client lists on personal phones; Research-tip calls to people who never consented; Client KYC copies shared over email with partners
Payments and fintechCard numbers in logs and support tickets; Merchant onboarding documents in shared drives; Fraud models that use data beyond what users were told

7 guides for the HR department, in full

How long must we keep KYC and transaction records, and what happens after?

Short answer: At least five years after the relationship ends; then erase

Under PMLA and RBI's KYC Master Direction, keep identity records for at least five years after the relationship ends, and transaction records for at least five years from the transaction. During that time, keep them only for that legal purpose. After it, erase or anonymise unless another law requires more.

What the law says

Section 8(7) allows retention where a law requires it. PMLA and RBI's KYC rules are such laws. Section 8(7) · Rule 8 · Section 7

Steps
  1. List KYC and transaction record types.
  2. Set the start date: end of relationship or date of transaction.
  3. Restrict access to closed-account records.
  4. Erase or anonymise after the period.
  5. Explain this in erasure replies.
Evidence to keep
  • Retention schedule
  • Access restrictions on closed accounts
  • Deletion logs
Common mistakes
  • Keeping everything for ever
  • Deleting before the legal period
  • Using closed-account data for marketing
Related questions

Do we need consent for employee data?

Short answer: Not for employment purposes; yes for anything extra

Usually not for normal employment purposes. Section 7(i) lets you process employee data for employment, such as payroll, attendance, safety and preventing corporate espionage. Anything beyond that, such as wellness apps, photos for marketing or sharing with a bank for offers, needs consent.

From your seat: HR department. Prepare the employee privacy notice and give it to every joiner.
In BFSI

Background and credit checks on staff are employment purposes; explain them in the staff notice.

What the law says

Section 7(i) covers employment purposes and safeguarding the employer from loss or liability. Notice, security, retention and rights still apply to employees. Section 7 · Section 5 · Rule 3 · Section 8(7) · Rule 8 · Sections 11–14 · Rule 14

Steps
  1. List what you collect from staff and why.
  2. Mark which items are employment purposes and which are extra.
  3. Take consent for the extras, separately.
  4. Give staff a short employee privacy notice.
  5. Set retention for ex-employee records.
Evidence to keep
  • Employee data list with basis
  • Employee privacy notice
  • Consent for extras
Common mistakes
  • A blanket consent clause in the offer letter
  • Keeping candidate data forever
  • Sharing staff data with vendors without terms
Related questions

Are contract and agency workers our responsibility?

Short answer: Yes, for the data you decide about

Their data is your responsibility when you decide why and how it is used, for example gate passes, attendance, biometrics and safety records. The agency holds payroll and personal files, so your contract with the agency must cover how it protects that data.

From your seat: HR department. Agree with Admin and agencies who holds which worker records.
In BFSI

Branch guards, housekeeping and data entry operators are often agency staff.

What the law says

Section 7(i) covers employment purposes. Section 8(1) and 8(2) make you responsible for processors such as manpower agencies working on your behalf. Section 7 · Section 8(1)–(2) · Section 8(5) · Rule 6

Steps
  1. List what you hold about contract workers: ID copies, photos, biometrics, attendance, medical fitness.
  2. Decide who is the Data Fiduciary for each item: you or the agency.
  3. Put data terms in every manpower contract.
  4. Give a short notice in the workers' language at the gate or induction.
  5. Delete gate and ID records on a schedule.
Evidence to keep
  • Contract-worker data list
  • Agency contracts with data terms
  • Notice at the gate
Common mistakes
  • Photocopies of Aadhaar kept in open files
  • No terms in the agency contract
  • Biometric data with no deletion date
Related questions

How long can we keep personal data?

Short answer: For the legal or business period, then erase

Keep data for as long as its purpose needs, or as long as a law requires, and then erase it. Every organisation must keep personal data and logs for at least one year under Rule 8(3). Write a retention schedule by record type, with the law or reason against each period.

From your seat: HR department. Set periods for candidate, employee and ex-employee records.
In BFSI

PMLA and RBI KYC rules set the floor at five years for identity and transaction records.

What the law says

Section 8(7) asks for erasure when the purpose is over, unless a law requires retention. Rule 8(3) sets a one-year minimum for personal data, traffic data and logs. Section 8(7) · Rule 8 · Section 8(5) · Rule 6

Steps
  1. List the record types you hold.
  2. Write the period for each, with the law, regulator rule or business reason.
  3. Set a trigger for the period to start: end of relationship, date of transaction, exit date.
  4. Automate deletion where you can; for paper, schedule shredding.
  5. Keep a deletion log.
Evidence to keep
  • Retention schedule approved by Legal
  • Deletion log
  • Shredding or disposal certificates
Common mistakes
  • 'Keep everything forever' because storage is cheap
  • Deleting before the legal minimum
  • Forgetting email, shared drives and backups
Related questions

Who needs DPDP training, and what should it cover?

Short answer: Everyone who handles personal data, by role

Everyone who handles personal data needs short, practical training on what to do in their own job. Front-line staff need examples from their counter or desk. Managers need to know the clocks and their own duties. Management needs to know what to ask.

From your seat: HR department. Put DPDP into induction and the yearly refresher.
In BFSI

Branch staff need examples: KYC copies, walk-in requests, wrong sends.

What the law says

Section 8(4) and 8(5) ask for appropriate technical and organisational measures. Training is part of showing those measures work. Section 8(5) · Rule 6

Steps
  1. Group staff by what they handle: front line, back office, IT, managers, management.
  2. Write three to five real scenarios for each group.
  3. Keep sessions short: 20 to 30 minutes.
  4. Test with a few questions, and record attendance.
  5. Repeat every year, and at joining.
Evidence to keep
  • Training plan by group
  • Attendance and test results
  • Scenario material
Common mistakes
  • One long legal lecture for all
  • Training once and never again
  • No record of attendance
Related questions

What about CCTV, visitor registers and biometric attendance?

Short answer: Yes, with notice, limits and a deletion period

All three are personal data. Put a clear notice where people are recorded, collect only what you need at reception, keep footage and registers for a set period, and protect biometric templates carefully. Do not keep copies of ID documents unless you must.

From your seat: HR department. Biometric attendance data needs limited access and a deletion date after exit.
In BFSI

Branch and ATM CCTV needs notices and limited retention.

What the law says

Section 5 needs notice. Section 8(5) needs safeguards. Section 8(7) needs erasure after the purpose. For staff, Section 7(i) can cover security and attendance. Section 5 · Rule 3 · Section 8(5) · Rule 6 · Section 8(7) · Rule 8 · Section 7

Steps
  1. Put notices at CCTV points and reception, in the local language.
  2. Ask visitors only for name, phone and whom they are meeting, unless security needs more.
  3. Set a period for footage and registers, then delete.
  4. Restrict who can view footage, and log viewing.
  5. Check the vendor contracts for CCTV, guards and attendance systems.
Evidence to keep
  • Notices in place
  • Retention settings on the recorder
  • Viewing log
Common mistakes
  • Photocopying visitor IDs as routine
  • Footage kept until the disk fills
  • Biometric systems with vendor default passwords
Related questions

Someone asks what data we hold about them. What do we send?

Short answer: Yes, a clear summary, inside the published timeline

Send a summary of the personal data you hold about them and what you do with it, and the names of the other organisations you shared it with and what was shared. Check the person's identity first, log the request and keep a copy of your reply.

From your seat: HR department. Staff can ask what HR holds about them. Have the summary process ready.
In BFSI

The summary should list partner insurers, credit bureaus and collection agencies that received data.

What the law says

Section 11 gives the right to a summary and the list of organisations it was shared with. Rule 14 asks you to publish how requests are made and to answer within the period you publish. Sections 11–14 · Rule 14 · Section 8(9)–(10) · Rules 9, 14

Steps
  1. Log the request in one register the day it arrives.
  2. Verify identity using details you already hold.
  3. Search every system, including vendors' copies.
  4. Write a plain summary: what data, why it is used, who received it.
  5. Send it, and file the request, search notes and reply.
Evidence to keep
  • Request register
  • Search notes for each request
  • Copy of each reply with date
Common mistakes
  • Sending raw database dumps
  • Forgetting data held by vendors
  • No identity check before sending
Related questions

Practical examples

Notice wording, request log, retention schedule, vendor clause and breach notice for banking, financial services and insurance.

The sections you will use most

Other rules that sit alongside DPDP

RuleWhat it saysWhat it means alongside DPDPSource
Prevention of Money-laundering Act, 2002 and RBI KYC Master Direction, 2016Keep transaction records for at least five years from the transaction, and identity records for at least five years after the relationship ends.These periods override an erasure request. Explain the retention to the customer and stop every other use.RBI KYC Master Direction
RBI Master Direction on IT Governance, Risk, Controls and Assurance Practices, 2023In force from 1 April 2024 for commercial banks, larger NBFCs, credit information companies and all-India financial institutions. Requires IT governance under the board, audit trails, logging and incident reporting to CERT-In and RBI.Most of the DPDP security duty is already here. Map controls once and use the evidence for both.RBI
RBI Master Direction on Outsourcing of IT Services, 2023The regulated entity stays responsible for outsourced IT, with contracts, audit rights and exit plans.Line up DPDP processor contracts with this direction, so one schedule meets both.RBI
RBI direction on storage of payment system data, 2018All data relating to payment systems must be stored only in India.This is stricter than DPDP Section 16, and it continues to apply.RBI
RBI rules on card storage and tokenisation (from 1 October 2022)Only card issuers and card networks may store actual card data. Others use tokens, created with the cardholder's explicit consent.Check logs, call recordings and support tickets for card numbers.RBI
RBI (Digital Lending) Directions, 2025Collect only need-based data with prior explicit consent and an audit trail. Apps should not access contacts, files, media or call logs; one-time access to camera, microphone or location is allowed for onboarding or KYC with consent.Your app permissions and lending partner contracts are where DPDP and RBI meet.RBI
IRDAI Information and Cyber Security Guidelines, 2023Report cyber incidents to CERT-In within six hours, and to IRDAI within 24 hours of the CERT-In report.One incident plan should run the CERT-In, IRDAI and Data Protection Board steps together.IRDAI
SEBI Cybersecurity and Cyber Resilience Framework (CSCRF), 2024Security, logging and incident-reporting duties for SEBI-regulated entities. Stock brokers and depository participants report cyber incidents within six hours.Use CSCRF evidence for DPDP security, then add notices, consent and rights.SEBI
CERT-In Directions, 28 April 2022Report specified cyber incidents within six hours. Keep ICT logs for 180 days within India. Sync clocks to Indian time sources.Applies to every BFSI entity in addition to the regulator's own clock.CERT-In
Credit Information Companies (Regulation) Act, 2005Governs what credit information is shared with credit bureaus and how errors are corrected.Credit bureau sharing has its own law; DPDP rights requests about bureau data should point to that process too.Act
RBI Integrated Ombudsman Scheme, 2021Customers can escalate unresolved complaints to the RBI Ombudsman.Privacy complaints may reach both the Ombudsman and the Data Protection Board. One complaint log helps.RBI
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