UPI Downtime is due to Weak Technology of Banks: RBI

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The Reserve Bank of India (RBI) governor, Shaktikanta Das, has stated that downtime in the UPI payment system is primarily caused by weak technology on the banks’ side rather than issues with the National Payments Corp of India (NPCI), the platform that hosts UPI. During a post policy press meet, Governor Das explained that in all cases of downtime, the NPCI has been checked and found to be functioning properly. The problem lies with the banks and their links, which can be attributed to various reasons. The RBI is actively working to address this issue.

Increasing Transaction Failures and Complaints

As a result of the downtime, banking customers have been experiencing an increase in transaction failures during digital payments, leading to financial losses. For instance, on June 4, there were complaints that many investment payments did not go through when investors wanted to take advantage of the market crash. These incidents highlight the need for improved stability and reliability in the UPI payment system.

Volume and Frequency of UPI Transactions

The UPI payment system handles a significant volume of transactions, with more than 450 million transactions per day. In May 2024 alone, there were 31 instances of downtime from various banks, resulting in payment gateways being shut down for over 47 hours. This data, sourced from the NPCI, emphasizes the importance of addressing the underlying issues causing the downtime.

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Reporting and Efforts to Reduce Downtime

To address the issue, all regulated entities are required to report any system outages, whether planned or unplanned. The central bank has been actively working to reduce downtime instances for several years, and as a result, downtime instances have been reduced to less than 1%. This ongoing effort reflects the commitment to improving the reliability and stability of the UPI payment system.

UPI Lite Wallet to Reduce Pressure on Banking System

To alleviate the pressure on the banking system caused by UPI transactions, the RBI has introduced the UPI Lite wallet. The purpose of this wallet is to ensure that UPI payments do not overload the banks’ systems. By increasing the adoption of UPI Lite transactions, the pressure on banks’ systems will decrease, ultimately leading to a reduction in downtime instances. The RBI’s deputy governor, T Rabi Sankar, highlighted the ongoing efforts to achieve this goal.

UPI Data

MonthNo. of Banks live on UPIVolume (in Mn)Value (in Cr.)
May’2459814,035.8420,44,937.05
Apr’2458113,303.9919,64,464.52
Mar’2457213,440.0019,78,353.23
Feb’2456012,102.6718,27,869.35
Jan’2455012,203.0218,41,083.97
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