The Indian Parliament passed the Bankers’ Book Evidence Bill after the Rajya Sabha cleared it on Monday with a voice vote. The Lok Sabha had last week passed the Bill, which substitutes colonial-era legislation of 1891 and seeks explicit legal recognition of digital bank records.
With the advent of digital and electronic record-keeping in the banking sector, the government deemed it necessary to repeal the Bankers’ Book Evidence Act of 1891, which allowed only paper-based bank records as evidence in legal proceedings, Finance Minister Nirmala Sitharaman said while replying to a debate on the Bill in the Rajya Sabha.
“The bill provides for a technology-neutral legal framework for bankers’ books. It recognises electronic and digital banking records. It standardises the certification process and facilitates the admissibility of electronic banking records,” Sitharaman said.
The finance minister said the Bill permits authentication through manual, digital and electronic signatures. “It also, therefore, strengthens the statutory protection available to the bank officers where the bank is not a party to the proceedings by requiring the court to record the existence of a special clause which is a feature in this new bill,” she added.
There have been instances of courts summoning bank executives to present paper-based records in cases where the bank was not even a party. “There is no reason why they should be called in a dispute that does not involve the bank at all,” Sitharaman said.
However, there is also a special clause under the Bill that may allow the court to ask banks to appear even in an unrelated dispute.
The finance minister informed that the Bill had about 16 clauses providing for several specific provisions, all of which allow for the digital records to be admitted in a court of law.
One of the clauses of the Bill allows the central government to extend the provisions under the Bankers’ Book Evidence Law, 2026, to other regulated entities in the financial sector as well through a notification.
“It (the bill) expands the evidence of bankers’ books to include records maintained in written or physical form or stored in electronic or digital form or otherwise, either onsite or offsite or virtual cloud-based recognition including backup or disaster-recovery site,” Sitharaman added.
