IAS Gyan

Daily News Analysis


31st May, 2023 Economy

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  • Reserve Bank of India is working on a lightweight and portable payment system, a "bunker equivalent in payment systems".


  • The proposed Lightweight and Portable Payment System (LPSS) will be independent of conventional technologies and can be operated from anywhere by a bare minimum staff, according to the central bank.
  • It can be used for critical transactions during catastrophic events like natural calamities and war.

Need of the lightweight payment system

  • Existing conventional payment systems like RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer) and UPI (Unified Payments Interface) are designed to handle large volumes while ensuring sustained availability. These systems are dependent on complex wired networks backed by advanced IT infrastructure.
  • However, catastrophic events like natural calamities and war have the potential to render these payment systems temporarily unavailable by disrupting the underlying information and communication infrastructure.
  • Therefore, it is prudent to be prepared to face such extreme and volatile situations.
  • Keeping this objective in mind, RBI has conceptualised the LPSS that will be independent of conventional technologies and can be operated from anywhere by a bare minimum staff.

Features of LPSS

  • It will operate on minimalistic hardware and software and would be made active only on a need basis.
  • The system can ensure near-zero downtime of the payment and settlement system in the country and keep the liquidity pipeline of the economy intact by facilitating uninterrupted functioning of essential payment services like bulk payments, interbank payments, and provision of cash to participant institutions.


  • LPSS would process transactions that are critical to ensure the stability of the economy such as 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.







A mobile app-based system that brings you multiple bank accounts on one platform for a unique effortless funds transfer experience

A process that is possible through mobile banking, internet banking and on-ground NEFT transactions

Transfer Time

Works on Immediate Payment Service; available 24×7

Can take up to 12 hours for fund transfer

Transfer cost

Currently free of cost; some banks may charge Rs.0.5 on every transaction

Currently free of cost via online platforms
Rs. 2.50 < Rs. 10,000
Rs. 5.00 < Rs. 10,000 – Rs. 1 Lakh
Rs. 15.00 < Rs. 1-2 Lakh
Rs. 25.00 above Rs. 2 Lakh

Transfer initiation

Can be initiated from any bank’s UPI app

Must be initiated from the Sender/Remitter bank’s app

Transfer Type

Both payment and collection transactions are possible

Only payment transactions are possible

Per Transaction Limit

Daily limit: Rs. 1 Lakh

No upper or lower limits

Beneficiary Details

Requires only Virtual ID

Requires bank account no., IFSC code, etc.

Bank Account Requirement

UPI payment or collection of money is possible even if you do not have a bank account

NEFT is possible only if you have a bank account

Adding a beneficiary

No need of pre-addition/approval of beneficiary; transfer made to beneficiary’s virtual ID

Pre-addition and bank’s approval of beneficiary required before transfer



Q.  Consider the following statements:

1. The Minimum transfer value in National Electronic Fund Transfer is Rs 5 lakhs.

2. In the case of Real Time Gross Settlement depending on the bank and the location, the operating hours vary.

3. UPI payment or collection of money is possible even if you do not have a bank account.

How many of the above statements are correct?

a.    Only one

b.    Only two

c.     Only three

d.    None.

Answer: b.Only two