RBI to launch new payment system for critical transactions during calamities, wars

In order to keep the payment systems running during catastrophic events like natural calamities or war, the Reserve Bank of India (RBI) has conceptualised a light weight and portable payment system that would process critical transactions to keep the liquidity pipeline of the economy running.  

The system, referred to as Lightweight Payment and Settlement System (LPSS), will be independent of conventional technologies and can be operated with bare minimum staff, the central bank's annual report 2022-23 said. 

The existing conventional payment systems like the RTGS, NEFT, and UPI are designed to handle large volumes and are dependent on complex wired networks backed by advanced IT infrastructure. They may become temporarily unavailable during the said times. 

The LPSS is expected to operate on minimalistic hardware and software and would be made active on a need basis.

The light weight and portable payment system could ensure near zero downtime of payment and settlement system in the country by facilitating uninterrupted functions of essential payments services like bulk payments, interbank payments and provision of cash to participant institutions. 

"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 report read. 

Meanwhile, with a view to upskill the staff with IT and analytical knowledge, the Reserve Bank has initiated work on development of an Advanced Enterprise Computing and Cyber Security Training Centre, construction of which is expected to commence shortly.  

This will be the fourth data centre and the second greenfield data centre of the RBI. 

Upgradation of e-Kuber, the core banking solution platform of RBI, and RTGS systems would also be undertaken during 2023-24. 

Decrease in debit card transactions 

During 2022-23, payment transactions carried out through credit cards increased by 30.1% and 47.3% in terms of volume and value, respectively. Transactions through debit cards decreased by 13.2% in terms of volume, and 1.4% in terms of value. 

Prepaid Payment Instruments (PPIs) recorded an increase in volume and value by 13.5% and 2.9%, respectively.

The number of Points of Sale (PoS) terminals increased by 28.3% to 77.9 lakh at end- March 2023, while the number of Bharat Quick Response (BQR) codes deployed increased by 6.7% to 53.8 lakh during the same period. Further, UPI QR increased by 48.4% to 25.64 crore at end-March 2023