RBI working on payment system for use in emergency situations

The RBI is working on a lightweight and portable payment system that can be used for emergency transactions during catastrophic events such as natural calamities and war.

The “bunker equivalent in payment systems” will be “Lightweight and Portable Payment System (LPSS)” independent of conventional technologies and can be operated from anywhere by a bare minimum staff, according to the RBI annual report released on Tuesday.

Existing conventional payment systems like Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Unified Payments Interface (UPI) are designed to handle large volumes while ensuring sustained availability. These systems are dependent on complex wired networks backed by advanced IT infrastructure.

But catastrophic events such as natural calamities and war have the potential to render these payment systems temporarily unavailable by disrupting the underlying information and communication infrastructure. “Therefore, it is prudent to be prepared to face such extreme and volatile situations,” said the report.

“It 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,” it explained.

Such a system would ensure near-zero downtime of the payment and settlement system in the country. It will also help keep the liquidity pipeline of the economy alive and intact by facilitating uninterrupted functioning of essential payment services such as bulk payments, interbank payments and provision of cash to participant institutions.

Lightweight and Portable Payment System

• The ‘bunker equivalent in payment systems’ will be ‘Lightweight and Portable Payment System’ independent of conventional technologies and can be operated from anywhere by a bare minimum staff
• Existing conventional payment systems like RTGS, NEFT and UPI are designed to handle large volumes and are dependent on complex wired networks backed by advanced IT infrastructure
• But catastrophic events such as natural calamities and war have the potential to render these payment systems temporarily unavailable

With Thanks Reference To : https://www.tribuneindia.com/news/business/rbi-working-on-payment-system-for-use-in-emergency-situations-512936