With everything going digital, and us relying on our phone UPI apps to scan and make a payment, what happens when the system fails, especially during war-time or natural disaster? To solve this problem RBI has thought of a portable lightweight payment system to help process critical transactions. This system is called Lightweight Payment and Settlement System (LPSS).
The RBI’s newly devised LPSS is an innovative measure designed as a failsafe to maintain financial stability of the country during extreme circumstances.
Also Read: RBI Allows Linking Credit Cards to UPI, Starts With RuPay
This payment system will allow zero downtime of any payment and settlement system in India and will make sure all transactions are uninterrupted be it a bulk payment or a very minute one.
The RBI’s 2022-2023 report mentioned, “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.”
The RBI report further stated that LPSS will work even on the most minimalistic hardware and software requirements, designed to be activated solely when circumstances demand. The LPSS system is programmed to handle transactions crucial for India’s economic stability, including government and market-associated transactions.
This new method looks forward to gaining the people’s confidence in regard to digital payments and the infrastructure of the finance whatever the condition be.
As part of its broader strategy, the RBI is also developing a durable framework for the structured oversight of centralised payment systems, termed Utkarsh 2.0, and upgrading capabilities of payment systems like NEFT and RTGS and bringing them in line with global PFMI standards.
Also Read: Paytm brings UPI Lite for iOS with cool features: Find out what’s new
In essence, the RBI’s LPSS signifies an important step towards making India’s financial systems resilient, accessible, and effective. It underlines the country’s commitment to prepare for unforeseen challenges and ensure uninterrupted economic operations under all circumstances.
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