UPI payments have been facing frequent disruptions, and RBI Governor Shaktikanta Das attributes these issues to banks' outdated technology rather than problems with the National Payments Corporation of India (
NPCI
), which manages the UPI platform.
During a press conference following a policy meeting, Das emphasised that the NPCI’s infrastructure is not at fault for the UPI downtime.
Instead, the disruptions arise from the banks' end, particularly their networking links, which are currently being addressed.
The rise in UPI payment failures is causing significant financial distress for banking customers. Notably, on June 4, many investors were unable to execute transactions via UPI during a market downturn, resulting in missed financial opportunities.
More downtime as UPI penetrates deeper
UPI transactions exceed 450 million daily, and in May 2024, banks experienced 31 instances of downtime, resulting in payment gateways being offline for over 47 hours, as per NPCI data.
Regulated entities must report all system outages, whether scheduled or unexpected. The RBI has been striving to minimise these incidents, which have now been reduced to below 1%.
To alleviate the strain on banks’ systems, the RBI has introduced UPI Lite, which handles 10 million transactions monthly, as part of its ongoing efforts to enhance digital payment reliability.
UPI numbers set new record in May
In May 2024, UPI processed a record 14.04 billion transactions, surpassing the previous high of 13.3 billion in April. This growth comes after a slight dip in April, which was the first monthly decline since March. Despite this, UPI continues to be the country's fastest-growing digital payments platform. In fact, UPI transactions saw a year-on-year increase of 49% in May.
Looking ahead, NPCI is working to further expand UPI's reach. This includes initiatives to encourage beneficiaries of government programs to use UPI for everyday transactions. Additionally, NPCI, along with RBI, is working on onboarding more rural banks to offer UPI services, making digital payments more accessible across the country.
