Light weight and portable Payment and Settlement System (LPSS)

Light weight and portable Payment and Settlement System (LPSS)

Subject :Economy

Section: Monetary Policy

The LPSS is being proposed by RBI, is a system that will be independent of conventional technologies and can be operated from anywhere with minimum staff. The aim is to ensure following:

• Ensure near zero downtime of payment and settlement system
• Enhance the liquidity available in the economy.
• Essential payment services work even in extreme situations or catastrophic events.
• Achieve a ‘bunker equivalent’ in payment system and enhance public confidence in digital payments and financial market infrastructure even during extreme conditions.

Features of a LPSS:

• Will operate of minimalistic hardware and software, to be made available on a need basis only with ability to process transactions critical to ensure economic stability.
• Unlike conventional systems like UPI, NEFT, RTGS it will not be dependent on complicated IT infrastructure.