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Economy
Mahesh

01/06/23 06:51 AM IST

Lightweight payments system

In News
  • The Reserve Bank of India (RBI) has conceptualised a lightweight payment and settlements system, which it is calling a “bunker” equivalent of digital payments.
Lightweight payment system
  • The infrastructure for this system will be independent of the technologies that underlie the existing systems of payments such as UPI, NEFT, and RTGS.
  • This could ensure near zero downtime of the payment and settlement system in the country and 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.
  • The system is expected to process transactions that are critical to ensure the stability of the economy, including government and market related transactions.
  • Having such a resilient system is also likely 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.
UPI v/s lightweight system
  • The key difference lies in the resilience and availability of the two systems.
  • UPI and other conventional systems prioritize handling large transaction volumes and require a stable and robust infrastructure.
  • On the other hand, the lightweight system is designed to operate even in volatile and extreme conditions when regular payment systems may not be accessible.
Source- Indian Express

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