New Delhi, Sept. 11: India’s legal framework for using banking records as evidence will shift to a technology-neutral regime from October 1, 2026, when the Bankers’ Books Evidence Act, 2026 comes into force, replacing the 1891 law and formally recognising records maintained across physical and digital systems.
The Finance Ministry notified the commencement of the new Act on Friday, September 11. President Droupadi Murmu gave assent to the legislation on August 13, bringing in a modern framework designed to align the evidentiary treatment of banking records with contemporary banking practices.
The legislation expands the definition of “bankers’ books” to cover physical, electronic, digital, virtual and cloud-based records. The definition also covers records held at backup and disaster recovery sites, allowing the statutory framework to accommodate changing methods of storing banking information.
The Act establishes separate certification mechanisms for physical and electronic records through its First and Second Schedules. Banks can authenticate the prescribed certificates through manual signatures or digital and electronic signatures recognised under the Information Technology Act, 2000.
It also expressly states that electronic or digital banking records cannot be rejected as evidence solely because they exist in electronic form. At the same time, it sets out statutory safeguards for establishing the authenticity and integrity of such records and addressing cybersecurity requirements.
These technology-specific certification and authentication requirements were not part of the Bankers’ Books Evidence Act, 1891. The new framework therefore replaces the earlier law’s approach with separate statutory procedures for physical and electronic banking records.
The Act also introduces greater clarity over when courts can require banks to produce records or bank officials to give evidence when the bank itself is not a party to proceedings. A court must record “special cause” in writing before summoning a bank official in such circumstances.
For the first time, the legislation defines “special cause” by specifying the limited circumstances in which courts may require banks to produce records or their officers to provide evidence.
The Central government can also extend the provisions, through notification, to specified financial-sector entities or classes of entities. This provision is intended to allow the legal framework governing financial records to cover entities as the financial sector evolves.
The Finance Ministry said the reforms are aimed at modernising the law in response to technological developments and changing economic needs, while promoting ease of doing business and supporting a modern and efficient financial system.
