Automating Consent-Based BGV Under India's DPDP Act
                     Automating Consent-Based BGV Under India's DPDP Act
This article explored the critical intersection of India's new Digital Personal Data Protection 
(DPDP) Act and the process of employee background verification. We established that the Act's 
core principles—requiring explicit notice and specific, informed consent—make traditional, 
manual BGV workflows obsolete and legally risky. Key challenges for DPDP Act compliance in 
hiring include providing clear notices, obtaining granular consent for each type of check, and 
managing the candidate's right to withdraw consent. We argued that these challenges are best 
met by automating the consent-based background verification process. Modern, technology-
driven solutions offer dynamic digital consent forms, create immutable audit trails, and 
automate consent withdrawal, ensuring robust data privacy in hiring. Adopting such automated
systems is presented not just as a best practice but as a legal necessity for companies operating 
in India today.
Introduction
India's journey into a formalized data privacy regime has culminated in the Digital Personal Data
Protection (DPDP) Act of 2023. This landmark legislation reshapes the landscape of how 
organizations collect, process, and store personal data. For HR and recruitment teams, one of 
the most impacted functions is background verification (BGV). The days of relying on a broad, 
catch-all consent clause buried in an offer letter are over.
Under the DPDP Act, consent is paramount. It must be explicit, informed, and auditable. This 
presents a significant challenge for companies that rely on manual or outdated screening 
processes. The administrative burden of managing compliant consent for every candidate can 
be overwhelming, creating bottlenecks and legal risks.
The solution lies in technology. For a forward-thinking organization like Coin Circle Trust, 
automating consent-based background verification is not just an efficiency upgrade; it is a legal 
imperative. This guide explains the core principles of the DPDP Act as they apply to BGV and 
outlines how automation is the key to achieving robust data privacy in hiring.
The Executive Brief
The New Reality:
India's Digital Personal Data Protection (DPDP) Act of 2023 has fundamentally changed how 
companies must handle personal data, including during background verification (BGV). The core
principle is clear, specific, and informed consent.
Key Mandates of the DPDP Act:
Notice is Mandatory: You must provide candidates with a clear notice explaining what personal
data is being collected and for what purpose.
Informed Consent: Consent must be freely given, specific, informed, and unambiguous. A vague
clause in an employment contract is no longer sufficient.
Purpose Limitation: Data collected for BGV cannot be used for any other purpose (e.g., 
marketing).
Right to Withdraw: Candidates have the right to withdraw their consent at any time, and you 
must make this process easy.
The Solution: Consent Automation 
Automating consent-based background verification is the most effective way to ensure DPDP 
Act compliance. Modern platforms achieve this by:
Providing clear, itemized digital consent forms.
Creating an immutable, time-stamped audit trail of consent.
Automating the process for withdrawing consent.
The DPDP Act and Its Impact on Background Verification
The DPDP Act moves India from a regime of implied consent to one of explicit, affirmative 
consent. This shift is built on several key principles that directly affect the automated 
background checks workflow.
1. The Power of "Notice"
Before you can even ask for consent, you must provide a clear notice. This notice must be 
presented in plain, simple language and outline:
What data is being collected: Be specific (e.g., "Aadhar number for identity verification," 
"university enrollment number for education verification").
The purpose of collection: Explicitly state that the data is for employment background 
verification.
How to withdraw consent: Inform the individual of their right to withdraw consent and the 
process for doing so.
A manual process struggles here. Sending different notices for different roles is prone to human
error, and tracking that each candidate received the correct notice is an administrative 
nightmare.
2. "Freely Given, Specific, and Unambiguous" Consent
This is the heart of the DPDP Act. Consent cannot be bundled or coerced. A candidate cannot 
be forced to agree to have their data used for marketing as a condition of their BGV.
Freely Given: The candidate must not be pressured.
Specific: Consent must be obtained for each distinct processing activity.
Unambiguous: The candidate must take a clear, affirmative action. Pre-ticked boxes are not 
compliant.
3. Purpose Limitation and Data Minimization
The Act mandates that you can only collect data that is necessary for the stated purpose. You 
cannot collect a candidate's marital status or religious information for a standard employment 
check. The data collected for BGV cannot be repurposed without fresh consent.
4. The Right to Withdraw Consent
A candidate has the right to withdraw their consent at any time. The process must be as easy as
giving consent. Upon withdrawal, you must cease processing and erase the data unless 
retention is required by law.
The Failure of Manual Processes in a DPDP World
Lack of Audit Trail: Generic signed forms cannot prove itemized consent.
Inconsistent Notices: Manual processes risk outdated or incorrect notices.
Difficult Withdrawal: Withdrawal requests are hard to track and action.
Data Security Risks: Paper and email-based storage increases breach risk.
Relying on manual workflows is a major legal and financial liability.
Automating Consent for DPDP Act Compliance
1. Dynamic and Itemized Digital Consent Forms
Compliant systems present:
A clear notice.
Itemized checklists for each verification type.
Explicit opt-in actions for each check.
2. Immutable, Time-Stamped Audit Trails
Automated platforms log:
Notice view timestamps.
Consent actions.
Device and IP metadata.
3. Integrated Consent Withdrawal Management
Automated systems allow candidates to withdraw consent easily and instantly trigger:
Process stoppage.
HR notifications.
Secure data erasure workflows.
4. Secure, Centralized Data Management
All sensitive data is encrypted, access-controlled, and fully auditable.
Conclusion
The DPDP Act of 2023 marks a decisive shift toward stronger data privacy in India. For HR 
teams, explicit and auditable consent is now mandatory.
Manual processes are no longer viable. Automation is the only sustainable path forward.
By adopting automated background checks, organizations like Coin Circle Trust ensure DPDP 
Act compliance while building candidate trust through transparent, secure data handling.
FAQ's
What is the main change the DPDP Act brings to background checks?
It requires explicit, specific, and informed consent for each type of data processed.
Is a clause in our employment contract enough for consent?
No. Consent must be separate, specific, and freely given.
How long should consent records be stored?
As long as data is processed and for a reasonable audit period afterward.
What happens if consent is withdrawn mid-check?
Processing must stop immediately; automated systems handle this instantly.
Can candidate data be transferred outside India?
Yes, unless restricted, but responsibility for protection remains with the employer.
What are the penalties for DPDP non-compliance?
Penalties can reach up to ₹250 crore depending on the violation.
Does the DPDP Act apply to contractors?
Yes. It applies to all individuals whose personal data is processed.