Finance Ministry proposes fresh Bankers’ Books Evidence Act

New Delhi: To align the evolving landscape of digital banking and record-keeping with the existing legal framework, the Finance Ministry is proposing a fresh Bankers’ Books Evidence Act to ensure legal coverage for banking records across all formats.

The proposed act would expand the definition of Bankers’ Books to include ledgers, daybooks, account books, and other records, whether in physical form or stored through any form of data storage mechanism — electronic, digital, cloud-based, virtual, or located offsite including disaster recovery systems.

It would also extend the applicability of the act to other financial entities, such as non-banking financial companies (NBFCs), insurance firms, and payment system operators, thereby enabling uniform and flexible application across the financial sector.

The existing act, enacted in 1891, governs the admissibility of banking records in courts of law through use of certified copies of bank records as evidence in legal proceedings, without requiring the production of original documents.

A review by the ministry found the present act lacking clarity in the context of digital banking. It did not adequately cover records maintained in electronic, virtual, or offsite environments, including core banking platforms, cloud storage, and disaster recovery systems, which are now an integral part of banking operations and infrastructure.

While giving legal recognition to electronic and digital banking records, the new act plans to simplify the certification process by introducing a single, standardised certification format multiple certificates under different laws, said ministry officials.

The certificate would be issued by a designated officer of the bank, accompanied by a system-related certificate from the officer in charge of the computer system to ensure the integrity and authenticity of the records.

While courts will continue to have the authority to summon original records or direct the appearance of bank officers, these would be only on recording a ‘special cause’ to reduce avoidable disruptions to banking operations while allowing judicial scrutiny.

The existing act, to be repealed, governs the admissibility of entries in a bank’s books in legal proceedings, making it easier to present copies of entries rather than requiring a bank officer to produce the original books in court.

It was last amended to include records stored in electronic formats, such as magnetic tape and microfilm, and specified the certification requirements for these electronic copies to be admissible as evidence.