RBI working on a light weight, portable payment system, independent of conventional technologies
1 min read 30 May 2023, 09:04 PM ISTThe proposed Light weight and Portable Payment System is expected to operate on minimalistic hardware and software and would be made active only on a need basis, the RBI said
PremiumThe Reserve Bank Tuesday said it is working on a light weight and portable payment system that that can be used for critical transactions during catastrophic events like natural calamities and war.
The apex bank in its annual report of 2022-23 said the proposed Light weight and Portable Payment System (LPSS) will be independent of conventional technologies and can be operated from anywhere by a bare minimum staff. The proposed LPSS System would be made active only on a need basis, the RBI added.
The RBI said the existing conventional payment systems like RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer) and UPI (Unified Payments Interface) are designed to handle large volumes while ensuring sustained availability. These systems are dependent on complex wired networks backed by advanced IT infrastructure.
However, during catastrophic events like natural calamities and war, these conventional payment systems can temporarily be unavailable due to disruption in information and communication infrastructure. "Therefore, it is prudent to be prepared to face such extreme and volatile situations," the RBI said.
The proposed Light weight and Portable Payment System is expected to operate on minimalistic hardware and software and would be made active only on a need basis. It would process transactions that are critical to ensure stability of the economy such as government and market related transactions," RBI said.
The central bank said, "Such a light weight and portable payment system could ensure near-zero downtime of payment and settlement system in the country and keep the liquidity pipeline of the economy alive and intact by facilitating uninterrupted functioning of essential payment services like bulk payments, interbank payments and provision of cash to participant institutions."
"Having such a resilient system is also likely to act as a bunker equivalent in payment systems and thereby enhance public confidence in digital payments and financial market infrastructure even during extreme conditions," the RBI added.
