Context: 

The Reserve Bank of India (RBI) has conceptualised a lightweight payment and settlements system, which it is calling a “bunker” equivalent of digital payments. 

• RBI has not offered a timeline for the launch of this payments system yet.

Need of Lightweight Payments System: 

• To ensure near zero downtime of the payment and settlement system in the country. 
• To 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.
• To process transactions that are critical to ensure the stability of the economy, including government and market related transactions.
• To operate on minimalistic hardware and software, and to be made active only on a need basis.
• 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.

How will the lightweight system be different from UPI?

• Different underlying technology: 
  • The infrastructure for this system will be independent of the technologies that underlie the existing systems of payments such as UPI, NEFT, and RTGS.
  • Existing conventional payments systems such as RTGS, NEFT, and UPI are designed to handle large volumes of transactions while ensuring sustained availability. 
    • As a result, they are dependent on complex wired networks backed by advanced IT infrastructure.

• Insulated from catastrophic events: 
  • Natural calamities and war have the potential to render conventional payment systems temporarily unavailable by disrupting the underlying information and communication infrastructure.
  • Lightweight system will enable it to be prepared to face such extreme and volatile situations as it can be operated from anywhere by a bare minimum staff in emergencies.

News Source: Indian Express

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