Critically evaluate the power to extend banking-evidence law to financial-sector entities by executive notification, from the standpoint of delegated legislation.

Under delegated legislation, Parliament sets the policy and the executive fills in the details. The Bankers' Books Evidence Act, 2026 lets the Central Government, by notification, extend the Act to any financial-sector entity. The notification may carry "conditions, exceptions, or modifications" [1]. The power is justified in function but thinly safeguarded.

Merits of the delegation

• Technological agility: the Act is technology-neutral and covers records in "any data storage mechanism" [2]. New kinds of entities can be brought in without amending the Act.
• Continuity: the extension power existed under the 1891 Act and has been retained [1], so it is a tested model.
• Uniformity and ease of doing business: covered entities get certified-copy proof and protection for their officers from routine summons [2]. This cuts compliance costs.
• Policy is laid down in the Act: the admissibility tests and the three "special cause" grounds are written into the statute [2]. This helps meet the excessive-delegation test from In re Delhi Laws Act (1951).

Concerns

• Power to modify the statute: the power to "modify" how the Act applies [1] goes beyond filling in details. It resembles a Henry VIII clause.
• No upfront scrutiny: the Bill passed both Houses within a week and was never referred to a Standing Committee. Only 1 of 12 Bills in the Monsoon Session 2026 was referred [3]. Parliament never discussed how far the extension power could reach.
• Undefined boundary: the Act does not define "financial sector". Entities with weak system logs could still pass the admissibility test, because it asks only whether tampering was "detected" [2].
• Privacy spillover: each extension adds to the account data available to investigators. Section 17 of the DPDP Act, 2023 exempts processing for investigating offences from data-principal rights [4]. This tension with the proportionality standard in Puttaswamy (2017) has not been examined.

Way forward

• Every extension notification should be laid before Parliament and examined by the Committee on Subordinate Legislation.
• RBI should set audit-trail standards before new entities are covered. It already issues compliance directions to banks under this law [5].
• The Act or its rules should set statutory limits on what "conditions and modifications" may include.

On balance, the extension power suits a fast-changing financial sector, and the Act itself sets out the core policy. However, its power to modify the Act and the lack of parliamentary scrutiny create a gap in accountability. Laying notifications before Parliament and committee review can close that gap. This would keep the flexibility while upholding legislative supremacy and the right to privacy.