Financial Disruptions Affect Major Banks: Customers Unable to Transfer Funds via UPI
Headline: Major UPI Outage Disrupts Digital Payments Across India
On Thursday morning, millions of users in India faced difficulties with digital payments as the Unified Payments Interface (UPI) experienced a significant outage. The disruption, which lasted for several hours, affected services at several top banks, including HDFC, SBI, Bank of Baroda, and Kotak Mahindra.
The outage was first reported at around 8:30 AM, and it was tracked by Downdetector, a platform that monitors service disruptions. Reports indicate that nearly 200 complaints regarding the UPI outage were logged on Downdetector.
The National Payments Corporation of India (NPCI) clarified that the core UPI infrastructure was functioning properly, and the disruptions were linked to internal problems faced by certain banks rather than NPCI's platform. The primary cause of the outage was attributed to bank-side technical glitches, with several banks experiencing internal system troubles leading to failures in processing UPI transactions.
The outage had a significant impact on users, making it difficult for them to complete online payments during the outage period. This disruption highlighted the reliance on a few institutions whose glitches can impact the overall ecosystem. It also raised concerns on payment system robustness, as UPI handles billions of transactions monthly, being a backbone of India's digital payments ecosystem.
NPCI has emphasized working closely with banks to quickly resolve such issues without systemic failure. Potential solutions include strengthening bank infrastructure, implementing redundancy and failover mechanisms, increasing monitoring and early warning systems, and implementing regulatory changes to enhance system performance and reliability.
The recurring outages have raised concerns over the reliability of the UPI payment system. However, the NPCI maintains core system stability, and ensuring resilience at the bank endpoint remains critical for avoiding future large-scale disruptions.
This outage exemplifies the growing pains in scaling a payment system that handled over 18 billion transactions just months later (June 2025), with a transaction value well over ₹24 lakh crore. While the NPCI maintains core system stability, ensuring resilience at the bank endpoint remains critical for avoiding future large-scale disruptions.
The Reserve Bank of India and NPCI have been discussing financial sustainability models for UPI to ensure continuous investment in infrastructure robustness. These discussions are crucial for addressing the challenges faced by the UPI system and ensuring its continued growth and reliability.
The disruption in UPI services, significantly impacting digital payments across India, has raised questions about the payment system's robustness, as it processes billions of transactions each month. Moving forward, enhancing bank infrastructure, implementing redundancy and failover mechanisms, and strengthening regulatory changes might be essential to ensure system performance and reliability in the future.
The recurring outages underscore the crucial need for financial sustainability models for UPI, as continuous investment in infrastructure robustness is necessary for addressing its challenges and fostering its continued growth and reliability.
