INDIA Trends and Developments Contributed by: Nishant Joshi, Kunal Singh, Palash Bhatkoti and Vikalp Wange, Shardul Amarchand Mangaldas & Co.
above, India’s legislative framework has undergone a corresponding change. Traditional statutes such as the Indian Penal Code, 1860, which were conceived in a pre-digital era, had often proved inadequate in addressing sophisticated financial crimes involving cyber tools, layered transac - tions and cross-border networks. The legal response was historically reactive, with amendments and new regulations having been introduced only after novel forms of misconduct had already taken root. However, this dynamic has recently undergone change with the introduction of modernised criminal legislation, strengthened enforcement mechanisms and a growing emphasis on digital evidence, signal - ling a move towards a more proactive and adaptive legal regime. Some of the key initiatives are outlined hereunder. I) Modernisation of the traditional criminal law frame - work The Bharatiya Nyaya Sanhita, 2023 (BNS) represents a significant recalibration of the manner in which India addresses financial crime. The BNS provides clear definitions that are meant to protect against modern financial crimes. For the first time, the BNS explicitly recognises “organised crime” and introduces a broad- based and comprehensive definition of “economic offences”, which encompasses large-scale financial frauds, mass-marketing frauds and schemes intended to defraud the public, banks or financial institutions. The law now specifically addresses hawala transac - tions and schemes targeting banks and the public, demonstrating that lawmakers are not only cognisant of these threats but have taken steps to tackle the menace of large-scale, organised financial crime. Notably, the BNS not only distinguishes between organised crime and isolated financial offences but also prescribes materially harsher punishments for the former – ranging from five years’ imprisonment to life imprisonment, with an additional fine of up to INR5 lakhs.
Even cheating by way of personation, a method directly relevant to fraud by impersonation and digital arrest, as detailed above, now attracts imprisonment of up to five years, which may also include a fine. The punishments for impersonating a public servant and extortion, which are of relevance in cases of digi - tal arrest and forgery, have been made stricter, and both the minimum and maximum sentences have been increased. The definition of “economic offence” under the BNS is deliberately expansive, encompassing mass-market - ing fraud and schemes to defraud multiple persons, banks and other financial institutions. The intention is to ensure that prosecution is not confined to the traditional cheating and breach-of-trust framework but extends to account for scale, organisation and systemic harm, thus reflecting the reality of modern digital fraud, cross-border syndicates and multi-victim schemes. The BNS also acknowledges the international dimen - sion of modern-day financial crimes by recognising the concept of extraterritoriality, and it also gives impetus to trials in absentia, with the purpose and intent of expediting the prosecution of economic offenders who seek to escape justice by fleeing the territory of India. II) Digital evidence and procedural reform Complementing the BNS, the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) and the Bharatiya Sakshya Adhiniyam, 2023 (BSA) have been updated for the digital era. The BSA, in particular, has expanded the definition of documents to include electronic and digital records, encompassing online communications across personal devices. This definition is deliberately wide and covers emails, messages, server logs, user files such as photographs and call recordings, and communication devices including mobile phones, laptops and any other electronic device that may be specified by the government at a later stage. This broad classification represents a shift in how courts will consider evidence in cases arising out of new types of crimes, where there is likely to be
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