RBI says that in catastrophic events like natural calamities and war, traditional payment systems will make it difficult to transact money. Therefore, it is very important to be prepared to face such extreme and volatile situations.
With the continuous technological development in the country, things are getting advanced. In this episode, the Reserve Bank of India is going to introduce another facility. Actually, RBI is working on a light weight and portable payment system.
RBI said that it is going to act like a bunker in payment systems. It can be used for important transactions during catastrophic events like natural calamities and war. Let us know completely about Light Weight and Portable Payment System ie LPSS.
What is Light Weight and Portable Payment System (LPSS)?
According to the central bank, the proposed Light Weight and Portable Payment System (LPSS) will be independent of traditional technologies and can be operated from anywhere by minimum staff. Whereas, existing traditional payment systems such as RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer) and UPI (Unified Payments Interface) are designed to handle large volumes of payments while ensuring continuous availability.
How will the Light Weight and Portable Payment System (LPSS) work?
RBI says that in catastrophic events like natural calamities and war, traditional payment systems will make it difficult to transact money. Therefore, it is very important to be prepared to face such extreme and volatile situations. Keeping this objective in mind, RBI has envisaged LPSS which will be independent of traditional technologies and can be operated from anywhere by minimum staff.
How economical will this system be?
It is expected to work on minimal hardware and software and will be activated only on need basis, RBI said. It will process transactions that are important for ensuring the stability of the economy, such as government and market-related transactions.
The central bank said that this can ensure almost zero downtime of the payment and settlement system in the country. This will facilitate seamless functioning of essential payment services such as bulk payments, interbank payments and provision of cash to participating institutions.
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