Lok Sabha on Tuesday cleared the Bankers’ Books Evidence Bill, 2026, which aims to overhaul the colonial-era Bankers’ Books Evidence Act of 1891 and bring the legal framework governing financial evidence in line with modern, digital banking systems.While legal experts have welcomed the much-needed technological update, they have expressed concerns regarding data privacy and the missed opportunity to introduce robust digital safeguards.The primary purpose of the 135-year-old law was to allow certified copies of bank records to be used as evidence in legal proceedings. This would save bank officials the hassle of physically producing original ledgers in court every time.As the Bill’s Statement of Objects and Reasons notes, the old law was enacted when “banking records were predominantly maintained in physical form”. But today, with “the advancement of technology and growth of digital banking”, bank records are “increasingly created, stored and maintained using contemporary technology.” Due to this, the government felt it necessary to “modernise and strengthen the existing legal framework”.What the Bill doesThe Bill’s most significant change is its expanded definition of “bankers’ books”. In the old law, bankers’ books are defined only as records “kept in written form or stored in a micro film, magnetic tape or in any other form of mechanical or electronic data retrieval mechanism.” The 2026 Bill recognises records stored in “electronic or digital form, or otherwise, either onsite or at any offsite or virtual or cloud location”.Also Read | Money Bill passed to increase judges’ number: Why this route faces legal challengeTo standardise how these digital records are presented in court, the Bill introduces specific certificate formats and conditions. Advocate on Record at the Supreme Court and Chartered Accountant Deepak Joshi called this a major improvement, comparing it to the Section 63 certificate required for electronic evidence under the Bharatiya Sakshya Adhiniyam — the general evidence law that governs what counts as proof. “They have provided a certain format and undertakings to be given alongside the certified copies so that the court can be assured and satisfied of the genuineness of the copy,” Joshi said.Story continues below this adUnder the 1891 Act, bank officers could not be compelled to produce records or appear as witnesses in cases where the bank was not a party, unless a court ordered it for a “special cause”. However, the Act never defined this term.The Bill brings clarity to the concept, defining “special cause” as instances where the accuracy of the record is doubtful, where regular record-keeping has been interrupted or where the bank disobeys an inspection order.Anshul Gupta, also an Advocate on Record at the Supreme Court, pointed out that these changes will significantly streamline commercial litigation, such as cheque bounce cases. “Bank officials will not be dragged in court to produce originals or appear as witnesses where banks are not direct parties,” he said. “Electronic records can be produced directly and will be admissible,” he said, adding that this will reduce the lifespan of such cases.Concern over police powersA major talking point surrounding the Bill has been Section 11, which states that court orders compelling the production of bank records for investigations can be construed as orders made by an officer “not below the rank of a Superintendent of Police”.Story continues below this adAlso Read | Why the Supreme Court has issued new gender-sensitivity guidelines for trial judgesHowever, this is not a new power. Section 8 of the old Act contained the exact same provision, allowing an SP-rank officer to demand records for police investigations. “There is no reason to worry because these are usual powers granted in the need of investigation,” Joshi said, calling the concern over this provision a “red herring”.But Gupta pointed out that because records are now electronic, they can be obtained and shared easily on a phone, increasing the risk of data leaks and privacy concerns, whereas with physical books, it is difficult to share and make copies off. “It should be the court which can allow it,” Gupta said.Other issues and missed opportunitiesWhile the Bill modernises the law, experts feel it misses the mark on procedural safeguards. Joshi said that lawyers and judges currently struggle to prove or disprove digital documents. He suggested the Bill could have incorporated modern safeguards such as hash values — a unique digital fingerprint used to verify that an electronic file has not been tampered with — to ensure the sanctity of the evidence.Story continues below this adGupta seconded this. “The bill doesn’t address the issue of data protection,” he said. “Are our banks prepared for data leaks and manipulation?”Also Read | Jantar Mantar protests: What is the legal recourse for doxxing victims in India?Devidas Tuljapurkar, Chairman of the Banking Education Training Research Academy and a former banker, said that Bill’s requirement that a branch head certify the bank’s network and devices were secure from cyber threats will place an unrealistic burden on local bank staff. “In a centralised banking environment, a branch manager ordinarily does not control or possess personal knowledge of the bank’s data centre, cloud service provider or cybersecurity incidents,” Tuljapurkar said. He suggested a modular certification system where designated technical officers handle system-integrity certificates instead.He also raised concerns about Section 4 of the Bill, which empowers the Union government to extend the law’s provisions to any financial entity simply by notification. According to him, loosely regulated digital lending intermediaries or fintech platforms “should not automatically receive the same presumption of reliability as a scheduled commercial bank” without Parliamentary approval.Story continues below this adThe wholesale replacement of the Act might cause interpretation issues and multiplied litigation, as parties debate whether the new rules and definitions can be applied to ongoing trials, said Joshi. “The first casualty is always the pending matters,” he said.