LIJDLR

Banking Regulation

AI, FAIRNESS AND FINANCIAL DATA: A LEGAL STUDY OF INDIA’S UPDATED DATA PROTECTION RULES FOR BANKS

Volume IV Issue II /

AI, FAIRNESS AND FINANCIAL DATA: A LEGAL STUDY OF INDIA’S UPDATED DATA PROTECTION RULES FOR BANKS Pranav Kumar Saxena, B.A. LL.B. (H), LL.M., Associate Vice President (Legal), Kotak Mahindra Bank Ltd. (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.181 Artificial Intelligence (AI) now plays a central role in India’s banking sector. Banks depend on AI systems for scoring credit risk, detecting fraud, monitoring transactions, automating customer interactions and supporting compliance processes. These systems promise efficiency and scale, but they also rely on continuous processing of personal and financial data. This increases concerns about fairness, transparency, accuracy and privacy. The Digital Personal Data Protection Act 2023 (DPDP) and the Digital Personal Data Protection Rules notified in 2025 have introduced a detailed and structured framework to govern the processing of such data. These Rules include strict standards for consent, retention, deletion, breach reporting, cross-border transfers and automated decision making. They also create new classifications, Significant Data Fiduciaries, under which most banks are likely to fall. This paper examines how these updated Rules affect AI enabled banking in India. It studies how the Rules shape responsibilities related to fairness, accountability and transparency in automated decision making. It also compares India’s approach with global models such as the GDPR, China’s PIPL and the United States’ sector specific system. While the new Rules mark a major step forward for data governance, the paper argues that India still needs clearer standards on algorithmic fairness, explainability, vendor management and audit requirements. The aim is to support a regulatory environment that encourages innovation while protecting financial data and strengthening trust in AI driven banking.

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CORPORATE DEBT RESTRUCTURING: LEGAL INTERSECTION OF COMPANY LAW AND IBC

Volume III Issue II /

CORPORATE DEBT RESTRUCTURING: LEGAL INTERSECTION OF COMPANY LAW AND IBC Karthikeyan D, Presidency University Bengaluru Download Manuscript doi.org/10.70183/lijdlr.2025.v03.76 Corporate Debt Restructuring (CDR) is a critical mechanism within India’s financial ecosystem, designed to facilitate the revival of financially distressed companies while safeguarding broader economic stability. This article examines the evolving legal framework governing CDR in India, focusing on the intersection of company law, banking regulation, and insolvency legislation. The Companies Act, 2013, provides the statutory foundation for corporate-level restructuring decisions through Sections 230 to 232, which enable schemes of compromise and arrangement to be made under judicial supervision. Simultaneously, the Reserve Bank of India (RBI) has issued prudential frameworks, including the erstwhile Corporate Debt Restructuring Mechanism and the recent Prudential Framework for Resolution of Stressed Assets, guiding financial institutions in managing non-performing assets. The introduction of the Insolvency and Bankruptcy Code (IBC), 2016 marked a transformative shift in India’s restructuring regime by introducing a time-bound, creditor-driven resolution process with legal enforceability. The IBC complements existing restructuring frameworks by serving as both a deterrent and a formal resolution mechanism. Provisions such as Section 230 schemes during liquidation and the Pre-Packaged Insolvency Resolution Process (Pre-Pack IBC) reflect the integration of insolvency laws. Beyond statutory regimes, this article addresses contractual and security law dimensions, including loan renegotiations, covenant modifications, and enforcement of security interests under the SARFAESI Act, 2002. The analysis highlights judicial evolution through landmark rulings such as Essar Steel, Jet Airways, and Swiss Ribbons, which reinforce creditor rights and ensure procedural integrity. Despite progress, challenges persist, including regulatory overlaps, procedural delays, and inter-creditor conflicts. Recent developments such as RBI’s emphasis on out-of-court restructuring and India’s move toward cross-border insolvency norms signal a forward-looking approach. This article concludes that a harmonized framework combining company law, banking regulation, and insolvency law is essential for improving efficiency, enhancing creditor confidence, and strengthening India’s corporate resilience.

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