Bankers’ Books Evidence Bill empowers India for digital banking era

New Delhi, Aug 5 (AHN) The Bankers' Books Evidence Bill, 2026, introduced by the government in the Parliament, is aimed at retiring a 135-year-old colonial law for a digital-era banking system in India.

The Bill repeals and replaces the Bankers' Books Evidence Act, 1891, with a technology-neutral legal framework governing the proof and admissibility of bankers’ records in legal proceedings.

It expands the definition of “bankers’ books” to expressly include physical, electronic, digital, virtual and cloud-based records, including those stored at back-up and disaster recovery sites, ensuring the law remains relevant as technology evolves.

The Bill also introduces a two-track certification framework, with separate certificates for physical and electronic records under the First and Second Schedules, authenticated either manually or through digital or electronic signatures recognised under the Information Technology Act, 2000.

Further, it expressly provides that electronic or digital bank records cannot be denied admissibility solely because they are in electronic form and prescribes detailed statutory safeguards to establish their authenticity, integrity and cybersecurity. These technology-specific certification and authentication standards were absent under the 1891 Act.

The Bill defines "special cause" for the first time by clearly specifying the limited circumstances in which courts may require banks to produce records or bank officers to give evidence.

It also empowers the Central government to extend the legal framework governing bankers’ books, by notification, to other entities in the financial sector, ensuring the law remains relevant as the sector evolves.

The Bill introduces separate statutory certification mechanisms for physical and electronic records through the First and Second Schedules and recognises manual as well as digital or electronic signatures under the Information Technology Act, 2000.

The Bill forms part of the Narendra Modi government's sustained programme to modernise India's banking and financial sector. It follows the Banking Laws (Amendment) Act, 2025, which strengthened bank governance and customer nomination provisions, and complements broader initiatives such as Digital India, the JAM Trinity, UPI and the rapid expansion of digital financial services. By modernising the framework governing bankers' books, the Bill aligns the law with India's digital banking ecosystem and supports a secure, technology-driven financial system.

India's financial transactions have moved decisively beyond the traditional bank branch. UPI alone processed close to 24,162 crore transactions worth about Rs 314 lakh crore in FY 2025-26, with 55.49 crore users onboarded by June 2026. Further, RBI's Payment Systems Report similarly shows total digital payment transaction volumes rising from Rs 6,437 crore in 2021 to Rs 26,819 crore in 2025, a compound annual growth rate of roughly 43 per cent.

A growing share of these transactions is facilitated by NBFCs, payment aggregators and other fintech intermediaries operating in an increasingly diverse financial ecosystem. Recognising this transformation, the Bill empowers the Central government to extend its provisions, by notification, to any entity or class of entities operating in the financial sector, ensuring that the legal framework can evolve alongside India's rapidly expanding digital financial ecosystem rather than remain confined to the 19th-century conception of a "bank" or "banker".