New Bankers’ Books Evidence Act to Take Effect from October 1

The Finance Ministry has notified the Bankers’ Books Evidence Act, 2026, which will come into force from October 1, replacing the more than 135-year-old law governing the use of banking records as evidence in legal proceedings.

The new legislation, which received the President’s assent on August 13, seeks to bring the legal framework in line with the way banking records are created, stored and accessed in the digital age.

A key feature of the Act is its technology-neutral approach. It recognises banking records maintained not only in physical form but also electronically, digitally, virtually and through cloud-based systems. Records stored at backup and disaster-recovery facilities are also covered.

This is a significant change from the Bankers’ Books Evidence Act, 1891, which was framed at a time when banking records were predominantly maintained in physical form.

The new law also introduces a standardised certification mechanism for banking records. Separate certification procedures have been prescribed for physical and electronic records under the First and Second Schedules of the Act. Certificates can be authenticated manually or through digital or electronic signatures recognised under the Information Technology Act, 2000.

The Act specifically provides that electronic or digital banking records cannot be rejected as evidence merely because they exist in electronic form. At the same time, it lays down safeguards relating to their authenticity, integrity and cybersecurity, providing courts with a clearer framework for assessing the reliability of such records.

Another important provision relates to the appearance of bank officials in court. Where a bank is not itself a party to a legal proceeding, courts will have to record "special cause" in writing before requiring bank officials to appear or produce records. The provision is intended to bring greater clarity and limit unnecessary demands on banks and their employees.

For the first time, the legislation also defines the circumstances constituting "special cause", setting out the limited situations in which courts may require banks to produce records or bank officers to give evidence.

The Central government has further been given the power to extend the framework to specified entities or classes of entities in the financial sector through notification. This provision is intended to allow the legal framework to keep pace with changes in the financial system and the emergence of new types of financial institutions.

The Finance Ministry said the reforms are aimed at modernising the legal framework governing banking evidence, while improving efficiency in legal proceedings and supporting the wider digital transformation of the financial sector.

With the new Act, banking records generated and maintained through modern digital infrastructure will have a clearly defined evidentiary framework, reducing reliance on a law enacted in the late 19th century and providing greater certainty for banks, courts and litigants.