PSBs Face Higher Technical Decline in UPI Systems Compared to Private Lenders

Public sector banks (PSBs) have a higher rate of technical decline in their unified payments interface (UPI) systems compared to private banks, according to data from the National Payments Corporation of India (NPCI).

The Central Bank of India and Bank of Maharashtra are among the PSBs experiencing technical declines of more than 1% in their UPI systems since January this year.

In contrast, private banks like HDFC Bank, Axis Bank, ICICI Bank, Yes Bank, and IDFC First have an average UPI technical decline of just 0.04%. Among private banks, Bandhan Bank has seen technical declines of over 1%.

Technical declines (TD) happen due to issues such as connectivity problems or switch unavailability.

The Reserve Bank of India (RBI) had earlier advised banks to reduce their TD to less than 1%.

In May, the Bank of Maharashtra had a TD of 2.06%, Bandhan Bank had 1.6%, and the Central Bank of India had 1.57%, according to NPCI data.

However, Bandhan Bank said its TDs are reducing. “Bandhan Bank migrated to a new core banking system in Q3 FY24. During the transition period, technical declines went up due to multiple factors, including integration challenges with internal and external systems. Since then, it has been continuously improving,” the lender told ET.

This difference in performance between PSBs and private banks highlights the ongoing challenges faced by public sector banks in maintaining efficient UPI systems. The RBI’s advisory aims to ensure better service quality and reliability in digital payments.