INDIA Law and Practice Contributed by: Vijayendra Pratap Singh, Asif Ahmed, Bhanu Jindal and Jitesh Lakra, AZB & Partners
wrongdoer from unjustly enriching themselves as a result of their illegal conduct, and is not a punishment. Therefore, the principle applied under the statutes is caveated by the fact that the disgorgement has to be limited to the unlawful gains obtained, and should never exceed them. It is now a settled principle that disgorgement of ill- gotten proceeds can be directed under various expro - priatory statutes; however, this is limited to attach - ment/confiscation of property to the extent of monies that have been appropriated illegally. These provisions therefore do not allow for exemplary damages for illicit acts committed by a party. 7.2 Laws to Protect “Banking Secrecy” Indian law imposes a statutory duty of fidelity, con - fidentiality and secrecy upon various intermediaries such as banks, public financial institutions and credit information companies. However, these obligations are subject to certain exceptions. The obligation to maintain secrecy, fidelity and confidentiality applies to: • banks under the Banking Regulation Act, 1949 (Section 34A); • public financial institutions through the Public Financial Institutions (Obligation as to Fidelity and Secrecy) Act, 1983; • credit information companies through the Credit Information Companies (Regulation) Act, 2005; and • intermediaries processing payments under the Payment and Settlement Systems Act, 2007. Breach of these obligations is punishable through vari - ous regulatory, monetary and criminal sanctions. The Bankers’ Book Evidence Act, 1891 also protects any banker from being compelled to produce any bankers’ book, and from being compelled to produce bankers’ books or testify regarding their contents unless spe - cifically directed by a court for special cause. The Indian Information Technology Act, 2000 also rec - ognises financial information (such as a bank account, credit card, debit card or other payment instrument detail) to be sensitive personal data and prohibits any disclosure thereof unless personally consented to by the entity/person to whom it belongs, or without con -
sent when sought by investigating agencies in accord - ance with the law. These obligations have been further bolstered under the newly enacted Digital Personal Data Protection Act, 2023 (“DPDP Act”). On 13 November 2025, the government notified the Digital Personal Data Protection Rules, 2025 (“DPDP Rules”). This notification forms part of a series of measures issued by the central government to oper - ationalise the DPDP Act, including staggered com - mencement of its provisions and the establishment and constitution of the Data Protection Board of India (DPB). The substantive compliance obligations under this framework are to take effect after a transition peri - od of 18 months, allowing entities time to strengthen data governance practices, technological systems and compliance processes. The Companies Act also safeguards against disclo - sure of third-party sensitive financial information, where such information is sought by bankers of any company under investigation (other than the informa - tion of the company itself). However, banking secrecy is not absolute. Banks may be compelled, through summons and processes issued in accordance with the law, to disclose such information. This right is clearly recognised in favour of investigating agencies, either through periodic report - ing requirements (such as those under the PMLA) or through a specific power to issue summons for dis - closure of information vested with various authorities (such as the police, income tax authorities, ED, cus - toms authorities, etc), who have been given power to compel a person to provide their books of accounts or face a penalty for non-compliance as specified under various statutes. Such statutes include: • the Income Tax Act, 1961; • the Foreign Exchange Management Act, 1999; • the Customs Act, 1962; and • the BNSS. Additionally, the police, income tax authorities, ED, custom authorities, etc, have the power to search for and seize documents from banks in the course of their investigation. Banks and intermediaries are also subject to limited disclosure under the Right to
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