Finance Ministry notifies major law change for digital payments: Know more

The Ministry of Finance, Department of Financial Services, has recently announced via an official notification released on May 6, 2025, that Sections 152 and 153 of the Finance Act, 2017, which have changed the Payment and Settlement Systems Act, 2007, will be made effective from May 9, 2025.

These rules, introduced through the Finance Act of 2017, are meant to make the rules for digital payments and settlement systems in India stronger. Although the latest notification doesn’t explain the exact changes under Sections 152 and 153, they are believed to offer better supervision and clearer guidelines for how digital payments and fintech companies should operate as the industry continues to grow quickly.

These amendments will increase the powers of the Reserve Bank of India (RBI) in managing and directing payment systems, enhance consumer protection mechanisms, and help make digital financial systems more secure, faster, and easier for everyone to use.

Sections 152 and 153 of the Finance Act, 2017

Section 152. In the Payment and Settlement Systems Act, 2007 (51 of 2007) (hereafter in this Part referred to as the principal Act), for Chapter II, the following Chapter shall be substituted, namely:—

‘CHAPTER II

DESIGNATED AUTHORITY

3. Designed authority – (1) The Reserve Bank shall be the designated authority for the regulation and supervision of payment systems under this Act.

(2) The Reserve Bank shall exercise the powers, perform the functions and discharge the duties conferred on it under this Act through a Board to be known as the “Payments Regulatory Board”.

(3) The Board shall consist of the following members, namely:—

(a) the Governor of the Reserve Bank – Chairperson, ex officio;

(b) the Deputy Governor of the Reserve Bank is in-charge of the Payment and Settlement Systems—Member, ex officio;

(c) one officer of the Reserve Bank to be nominated by the Central Board of the Reserve Bank—Member, ex officio; and

(d) three persons to be nominated by the Central Government – Members.

(4) The powers and functions of the Board referred to in sub-section (2), the time and venue of its meetings, the procedures to be followed in such meetings (including the quorum at such meetings) and other matters incidental thereto shall be such as may be prescribed.’.

Section 153. Amendment of section 38

In section 38 of the principal Act, in sub-section (2), in clause (a), for the words, brackets and figure “Committee constituted under sub-section (2)”, the words, brackets and figure “Board referred to in sub-section (2)” shall be substituted.