State Bank of India’s relatively high failure rate in UPI transactions is negatively impacting the overall success rate of the Unified Payments Interface (UPI), according to data released by the National Payments Corporation of India (NPCI), the body that operates the system.
In March, SBI recorded a technical decline (TD) rate of 0.9 percent. This was a significant increase from 0.34 percent in February and 0.84 percent in January. In contrast, most large private banks maintained TD rates below 0.1 percent. For instance, HDFC Bank reported a TD of 0.02 percent, ICICI Bank at 0.13 percent, Axis Bank at 0.03 percent, and Kotak Mahindra Bank at 0.02 percent.
Technical decline refers to failed transactions due to technological issues such as server downtime at the bank or NPCI. While NPCI typically maintains 100 percent uptime, transaction failures usually originate from the bank side.
Despite being India’s largest bank and the top UPI transaction handler, SBI’s high TD rate stands out, especially when compared to other public sector banks like Union Bank of India and Bank of Baroda, which recorded lower failure rates even with fewer resources. On the other hand, PSU banks like Canara Bank, Punjab National Bank, and Bank of India often show TD rates similar to or worse than SBI.
In March, SBI processed around 5 billion UPI transactions, while HDFC Bank handled approximately 1.5 billion. This massive scale, coupled with a higher failure rate, has made SBI a critical factor influencing the UPI platform’s reliability.
According to the Reserve Bank of India, UPI accounts for 83 percent of all digital transactions in the country. The platform experienced three outages in recent weeks. While the March 26 outage was due to NPCI issues, the others stemmed from banking infrastructure problems, largely influenced by year-end transaction volumes.
A senior digital executive from a public sector bank emphasized that SBI’s technical decline rate not only affects its own customers but also impacts third-party UPI apps like Google Pay and Paytm, where SBI serves as a partner bank or Payment Service Provider (PSP).
Neither SBI nor NPCI responded to queries regarding the reasons behind the high TD rates or steps taken to improve the performance.
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