Govt. Moves to Fast-Track Compliance under DPDP Act: Impact on FinTech, Banking and Insurance
Recent reports suggest that the Indian government is moving to accelerate compliance requirements under the Digital Personal Data Protection (DPDP) Act, 2023, with businesses handling personal data to likely have significantly less time than expected to prepare for full enforcement.
The move is slated to have a direct impact on data-intensive sectors such as fintech, banking and insurance, which processes large volumes of customer information on the daily.
While the Act has already been notified and is in force, the allied Digital Personal Data Protection Rules, 2025 were formally notified by the Ministry of Electronics and Information Technology (MeitY) on November 13, 2025 through a Gazette notification.
Also Read: India’s New DataPrivacy Rules: Know how they impact you, apps & E-commerce Platforms
The DPDP Act of 2023 already establishes a substantive legal framework for protection of digital personal data in the digital age which has transitioned to the age of Artificial Intelligence.
The Rules operationalise the law by setting out compliance obligations and timelines for enforcement. Rule 1 of the DPDP Rules establishes a phased commencement structure, with different sets of rules taking effect at different points in time.
As per the Rules, core compliance obligations on data fiduciaries including banks, insurers, fintech companies and other entities handling personal data are scheduled to come into force 18 months from the date of publication - in May 2027.
Reports suggest that the government is now considering shortening the 18-month compliance window to 12 months, following recent stakeholder consultations. If the compliance window is shortened, concerned entities would have to ensure full compliance by November 2026, greatly reducing time for preparation.
Compliance requirements vary depending upon the size and operational scale of the data fiduciaries, and may include annual data protection impact assessments, independent audits and due diligence to maintain the integrity of personal data processing systems.
Also Read: Digital PrivacyIssues under Income Tax Act, 2025: Search Powers Explained
The plausible shortening of the compliance deadline is bringing to the forefront services lent by companies such as Think360.ai, which works with banks, NBFCs and fintech firms, focusing on privacy-by-design data architectures that help institutions operationalise consent tracking, audit trails and explainable data usage.
Such systems are critical as regulators increasingly demand demonstrable compliance systems rather than policy-level assurances.
The far-reaching arms of the DPDP framework extends beyond just the financial sector, to smaller and non-traditional data handlers which includes housing societies and community management platforms.
With magnanimous penalties for lack of compliance under the DPDP Act, the government’s possible move to fast-track compliance once again underscored the relevance of data protection enforcement in this era.
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