As India’s financial sector is largely embracing digital banking, fintech integrations, and real-time payment systems, cybersecurity is no longer a choice. It has become a central concern. Cybersecurity demands awareness from IT teams, corporate boards, bank executives and compliance officers. With increasing exposure to threats like data breaches, system outages, and cross-border cyber-attacks, the legal liabilities of financial institutions and their leadership are under sharper scrutiny.

The Companies Act, 2013 levies directors of banks, NBFCs, and FinTechs to exercise due care and diligence, duties that now extend to overseeing cyber risk, ensuring internal controls, and disclosing key vulnerabilities in board reports. Simultaneously, the Information Technology Act, 2000 mandates that all entities handling sensitive financial data implement “reasonable security practices” and report cyber incidents to the regulators such as CERT-In. Violations can lead to both civil damages and criminal penalties.

With the recent Digital Personal Data Protection Act, 2023 (DPDP Act) adding another regulatory layer, financial firms must treat cybersecurity governance as a board-level priority. Whether operating a payment gateway, offering digital lending, or managing corporate accounts, financial service providers must embed legal compliance into their tech stack. This page outlines the intersection of finance, cybersecurity, and corporate liability in the evolving Indian regulatory landscape.