RBI to Regulate via Payments Regulatory Board Effective May 9, 2025

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  • Last Updated on 8 May, 2025

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Payments Regulatory Board

Notification No. S.O. 2031(E); Dated: 06.05.2025

1. Background

The Government of India has notified 9th May 2025 as the effective date for the enforcement of Sections 152 and 153 of the Finance Act, 2017. These sections pertain to amendments to the Payment and Settlement Systems Act, 2007 (PSS Act)—the key legislation governing payment systems in India.

2. Key Amendment – Change in Regulatory Structure

A significant change brought about through these amendments is in Chapter II of the PSS Act, which deals with the ‘designated authority’ responsible for regulating and supervising payment systems in India.

  • Earlier Provision – The Reserve Bank of India (RBI) was required to constitute a committee of its Central Board to perform the functions and discharge the duties under the PSS Act.
  • Revised Provision – With the notified amendment, the RBI shall now exercise its powers and functions through a dedicated ‘Payments Regulatory Board’, established under the PSS Act. This Board will serve as the designated authority under the law.

3. Objective of the Amendment

The change is aimed at –

  • Strengthening the governance framework for payment systems
  • Enhancing independence and accountability in regulatory decision-making
  • Aligning India’s regulatory structure with global best practices in digital payments and financial infrastructure

4. Implications

With this amendment now in force –

  • The Payments Regulatory Board becomes the principal body for oversight of India’s fast-evolving digital payment ecosystem.
  • It marks a structural shift in regulatory authority, allowing for more focused, expert-led governance of payment and settlement systems.

5. Conclusion

The operationalisation of Sections 152 and 153 from 9th May 2025 marks a milestone in India’s journey toward modernising its payment regulation regime. Stakeholders in the fintech, banking, and payment service sectors should take note of this revised governance structure under the PSS Act.

Click Here To Read The Full Notification

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied