Direct Benefit Transfer — Amendments

Amendment	Year	Description	Impact
Aadhaar Act Amendment	2019	Following the Supreme Court's 2018 judgment, the Aadhaar Act was amended to address privacy concerns and constitutional requirements. The amendment removed Section 57 that allowed private entities to use Aadhaar authentication, restricted data sharing, and strengthened the regulatory framework under UIDAI. It also introduced stricter penalties for unauthorized use and enhanced grievance redressal mechanisms.	The amendment balanced the use of Aadhaar for legitimate government purposes like DBT while protecting individual privacy rights. It provided legal clarity for continued DBT operations while addressing constitutional concerns raised by the Supreme Court, ensuring that the efficiency gains from Aadhaar-enabled transfers could continue within a rights-respecting framework.
Payment and Settlement Systems Amendment	2021	The Payment and Settlement Systems Act was amended to strengthen the regulatory framework for digital payments, including those used in DBT. The amendment enhanced RBI's powers to regulate payment systems, introduced stricter compliance requirements for payment service providers, and established clearer guidelines for data localization and security in payment transactions.	This amendment strengthened the security and reliability of the payment infrastructure underlying DBT, ensuring that the massive volume of government transfers could be processed safely and efficiently. It also enhanced consumer protection and dispute resolution mechanisms, crucial for maintaining beneficiary confidence in digital payment systems.

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