135-year-old banking law gets major digital update: Know what it is and how how we will be impacted
India is rapidly moving towards a digital banking system, with payments and financial records increasingly being created and stored electronically. However, the 135-year-old Bankers’ Books Evidence Act, 1891. . .
India is rapidly moving towards a digital banking system, with payments and financial records increasingly being created and stored electronically. However, the 135-year-old Bankers’ Books Evidence Act, 1891 was framed when banking records were largely maintained on paper, leaving the legal framework out of step with modern digital banking. Parliament has now passed the Bankers’ Books Evidence Bill, 2026, which replaces the colonial-era law and formally recognises electronic and digital bank records as admissible evidence in legal proceedings. This is set to completely change how digital banking records are viewed and used in legal proceedings, giving electronic records a stronger legal footing. What has changed?India’s banking system has moved far beyond paper ledgers, but the legal framework governing bank records was still based on a law from 1891. Bankers’ Books Evidence Bill, 2026 seeks to replace that 135-year-old framework. Rajya Sabha passed the Bill on August 10 after Lok Sabha cleared it on August 5. Proposed changes formally bring electronic and cloud-based banking records within the scope of the law. Why was the law changed?Banking has changed dramatically since 1891. Banks now depend heavily on internet banking, mobile applications, digital payments and cloud-based systems. Finance Minister Nirmala Sitharaman said the financial sector has also expanded with the growth of NBFCs, fintech companies, payment aggregators and other financial service providers. Existing law was created for an era when physical banking records were the norm. New legislation aims to bring the legal framework in line with modern banking practices. Who will be covered?Banks will remain at the centre of the proposed law, but its scope could become wider. Bill gives the central government power to extend the provisions to other financial sector entities. This could include NBFCs, insurance companies, pension funds and other regulated institutions. Government can also prescribe specific conditions, exceptions or modifications while extending the law to such entities. Where will digital records be recognised?Electronic records can now be recognised as bankers’ books regardless of whether they are stored at a bank’s premises or at an offsite, virtual or cloud location. This is particularly important as banks increasingly store account statements, transaction details and other financial information digitally. Such records can be used as evidence in court proceedings when the conditions prescribed under the law are met. When will bank officials need to appear?Proposed law continues protection for bank officials in cases where the bank itself is not a party. Officers generally cannot be required to produce bankers’ books or appear in court merely to prove routine transactions recorded in those books. Courts can still seek their involvement in specific circumstances, including cases where the accuracy of records is questioned or an order for inspection has not been followed. How will customers be impacted?Digital banking records getting clearer legal recognition could make it easier to rely on electronic statements and transaction records during legal proceedings. Change also makes data security and privacy more important because financial information may be produced as evidence. Overall, the Bill attempts to bring a 135-year-old banking law in line with India’s increasingly digital financial system. First published on:Aug 18, 2026 03:22 PM ISTGet Breaking News First and Latest Updates from India and around the world on News24. Follow News24 onFacebook,Twitter. End of ArticleRelated Story