Lok Sabha Approves New Digital Banking Law

The Central Government has taken a major reform step by replacing a 135 year old British era banking law. The Lok Sabha has passed the Bankers' Books Evidence Bill, 2026, replacing the Bankers' Books Evidence Act, 1891. Introduced by Union Finance Minister Nirmala Sitharaman, the new legislation aims to align banking laws with the digital era and modern methods of maintaining financial records.

The previous law was designed for physical ledgers, cash books, and handwritten records. However, with banking now driven by UPI, internet banking, cloud storage, and digital transactions, the new Bill recognizes electronic records, virtual data, cloud storage, and disaster recovery servers as valid primary evidence in courts. It also grants full legal recognition to certified digital and electronic signatures under the Information Technology Act, 2000.

The legislation is also expected to reduce the burden on bank employees. Under the new provisions, bank officials will not have to appear in court with physical records unless specifically directed by the court. This is expected to speed up investigations and legal proceedings in cybercrime, financial fraud, cheque bounce, and loan recovery cases through the use of certified digital evidence.