At a time when the government is gearing to introduce the draft data protection Bill, people believe that financial institutions, including insurance companies, banks and loan agencies, are the top offenders in compromising their personal data.

A survey by community social media platform LocalCircles shows that 6 in 10 people have reported personal data breach by their loan service providers, while 4 in 10 people have pointed fingers towards insurance providers or banks.

“Most respondents hold the last mile (such as service providers) of financial institutions and in many cases employees responsible for the breach,” the survey said. The survey covered over 41,000 people located in over 319 districts of the country.

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People believe a weak internal and external governance at the financial institutions is the main cause of data breach.

Simply put, these organisations employ contract workers or external service providers without briefing them about the rules and regulations related to data protection. Among others, whenever any employee leaves any such company, they take personal data of clients with them and then approach the clients through their new organisation, thereby resulting in breaches.

The reason for people to call out organisations, especially financial institutions for data breach can be attributed to the fact that “59% of the respondents with existing loans have been approached with alternative offers in the last five years”.

“This indicates a massive data breach as the sender has access to an individual’s personal loan data which is being used to send unsolicited loan offers”, the report said.

Similarly, 40% of the respondents surveyed have been approached for alternative offers to switch to a different insurance policy, whereas 34% with existing bank accounts admitted to being approached by other banks for account opening.

“All in all, the survey points to a clear need for a strong data protection law with clear disincentives for non-compliance, implemented effectively by financial institutions at every level,” the report said.

Apart from the breach of personal data, there have been instances of financial fraud. In August, MoS for finance Bhagwat Karad told Parliament that private and public banks have reported data frauds amounting to `6,861 crore in the April-June quarter.

According to people aware of the matter, the government is expected to come up with a draft data protection Bill within this week. On Tuesday, MoS for IT Rajeev Chandrasekhar said that the upcoming Bill will penalise companies in case of misuse of customer data. In the revamped version of the Bill, the government could penalise companies to the tune of Rs 200 crore if they fail to take reasonable measures to prevent data breaches, as per a report by The Indian Express.