UPI Cleanup Drive: UPI Glitches Under Scanner As Govt Seeks Higher Success Rates

The Centre has asked banks to collaborate with the National Payments Corporation of India (NPCI) to curb high failure rates in Unified Payments Interface (UPI) transactions. The discussions have taken place in the past two months as part of efforts to increase transaction success rates.

NPCI is supposed to review performance of banks and recommend corrective measures. 

Increased Failure Rates At Smaller Lenders

Transaction failures have been higher at smaller banks, including regional rural banks (RRBs). Limited technology infrastructure and lower levels of customer awareness have played a role in such failures.

UPI transactions can fail because of technical or business reasons. Technical issues include system outages and network disruptions at Banks or at NPCI. Business-related reasons are wrong PIN input or exceeding one's transaction limit.

Among the top 50 UPI participants, Airtel Payments Bank topped the list with the most business-related failure rate in February (21.97 per cent). Baroda UP Bank also reported the highest technical decline of 7.26 per cent.

Outages Reported Across Banks

NPCI reported downtime for 11 banks in February 2026, while Bank of India had the maximum downtime for around 14 hours during the month.

The government said that an assessment is necessary to find out whether failures are mostly technical or because of customer actions. Transaction declines is a concern for the stakeholder in the payments system.

UPI Share In Digital Payments

UPI accounted for 81 per cent of all retail digital payments in FY25, Union Minister of Finance Nirmala Sitharaman said in Parliament. The system still processes a majority share of digital transactions.

The Reserve Bank of India (RBI) has helped in supporting expansion of payment infrastructure under the Payments Infrastructure Development Fund. Under this scheme, around 580 million digital touchpoints and nearly 5.70 billion QR codes have been deployed.

A report by the finance ministry has said that the future growth of UPI and RuPay will depend on value added services, such as micro-credit, insurance, and loyalty programs. These areas are expected to have a bigger user-base and engagement.