India BPOs under scanner after TV channel exposes data leak

"The issue of security breaches is not offshore-centric. A research conducted by Forrester in 2005 said there were more security breaches in the UK and the US than in India," Karnik said.

Moreover, according to the findings of Financial Services Authority survey in April 2005 to review the risks involved in offshore outsourcing, Indian firms were aware of the general and firm-specific risks and were already undertaking appropriate actions to mitigate them, he said.

However, Karnik acknowledged that even though India is much safer than most other countries including the US and UK with regard to information security, further tightening of IT/BPO security backed by a strong legal framework is necessary to further improve India's position as an outsourcing destination.

"We are working closely with the government on key initiatives to create a 'secure' information security environment in the IT, ITes/BPO segments," Karnik said. "As more transactions are done on the internet these days including booking tickets, shopping, and banking security has become a major concern all over the world. In India, which is comparatively safer, our target is to create a more secure environment and do away with the loopholes, imperative for the growth of the country."

Key initiatives undertaken by NASSCOM to make India free from Cyber crimes and data theft are the Self Regulatory Organization (SRO) which will be rolled out in the next 2-3 months, and the National Skills Registry (NSR) which was unveiled in January earlier this year, he said.

"We will be rolling out the SRO, entailing a common standard to be followed by companies who are a part of it, that will broadly provide training, capacity building and also serve as a dispute resolution mechanism, in another 3-6 months," he said.

On further details on the companies who have evoked interest to enrol in the SRO, Karnik said, "Discussions are on, and we are still in the early stages. It will be operational within 2-3 years." The initial funding of the SRO is complete, and once operational, it will establish, monitor and enforce privacy and data protection standards for India's IT/BPO industry. Some penalties will also be imposed on the faulting companies, he added.

According to sources close to the development, NASSCOM is keen to strengthen the overall ambience of the IT security scene in India and is working with the government and enforcement agencies to strengthen the legal framework, and do away with loopholes in the system.

NASSCOM will also open two more cyber labs in Pune and Bangalore this year for training police officers in Cyber crime investigation. More of such labs are being planned in Delhi, Hyderabad and Calcutta.

It already has two such labs in Mumbai and Thane and has trained about 1,800 police officers and expects to train 3,000 officers in the next 12 months, NASSCOM vice president, Sunil Mehta said.