Facts For Prelims:
Source: Indian Express
Context: The Reserve Bank of India (RBI) has conceptualised a lightweight payment and settlements system, which can be operated from anywhere by a bare minimum staff in exigencies such as natural calamities or war.
- The infrastructure for this system will be independent of the technologies that underlie the existing systems of payments such as UPI, NEFT, and RTGS.
Difference between UPI and 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.
Benefits:
- Such a system 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 the uninterrupted functioning of essential payments.
- By implementing a lightweight system as a backup, the RBI aims to ensure that individuals and institutions can continue to make payments during emergencies or disruptions to the conventional payment infrastructure.
- It serves as a precautionary measure to be prepared for extreme situations and maintain the continuity of financial transactions.
