The Reserve Bank of India (RBI) plans to work on a lightweight and portable payment system that can be used for critical transactions during catastrophic events such as natural calamities and war.
“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”, the central bank said in its annual report for 2022-2023.
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, the report said.
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.
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