LIGHTWEIGHT PAYMENT SYSTEM - ECONOMY
News: RBI has planned to launch a lightweight Payment System
What is in the news?
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The Reserve Bank of India
(RBI) has conceptualized a lightweight payment and settlements system, which it
is calling a “bunker” equivalent of digital payments.
Key details of the new system:
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It can be operated from
anywhere by a bare minimum staff in
exigencies such as natural calamities or war.
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The infrastructure for
this system will be independent of the technologies that underlie the existing
systems of payments such as UPI, NEFT, and RTGS.
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The central bank has not
offered a timeline for the launch of this payments system yet.
Failure of Conventional payment system:
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Existing
conventional payments systems such as RTGS,
NEFT, and UPI are designed to handle
large volumes of transactions while ensuring sustained availability.
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However, catastrophic
events like natural calamities and war have the potential to render these
payment systems temporarily unavailable by disrupting the underlying
information and communication infrastructure.
Need for this system:
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RBI says that the
lightweight and portable payment system is expected to operate on minimalistic
hardware and software, and would be made active only on a “need basis”.
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RBI Says that the
lightweight and portable payment system could ensure near zero downtime of the payment and settlement system in
the country.
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Also it will 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.