RBI Grade BNABARD ESISEBI
In one line
Why in News?
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- The Unified Payments Interface (UPI) experienced multiple outages between March 26 and April 2, 2025.
- Disruptions impacted both banking apps and third-party UPI platforms, causing widespread transaction failures.
Root Causes Identified
- Telecom network fluctuations (ISP-related) disrupted UPI connectivity on March 26.
- A software-defined wide area network (SDWAN) glitch triggered another outage on April 2.
- Hardware malfunctions and bank-side transaction processing overload added to system instability.
- NPCI’s root-cause analysis led to hardware replacement and infrastructure updates to prevent recurrence.
Transaction Data and Impact
- On March 26, UPI success rates dropped to 50–60%, significantly below normal.
- UPI processed 550 million transactions, down 7% from 581 million the day before.
- March 2025 saw a record ₹24.77 trillion across 19.78 billion transactions, making disruptions more critical.
Infrastructure and Ecosystem Challenges
- UPI relies heavily on ISP-powered NPCI data centers, making it vulnerable to network disruptions.
- Banks’ server-side infrastructure is under strain due to surging transaction volumes.
- Fintech companies reported 50% transaction verification failure rates, affecting customer experience and reliability.
- March 31 outage was attributed to fiscal year-end activities at banks.
UPI’s Exponential Growth (FY25)
- Transaction value up by 30%: ₹260.56 trillion (vs ₹199.96 trillion in FY24)
- Transaction volume up by 42%: 131.14 billion (vs 92.48 billion in FY24)
- Over 80% of India’s digital payments are now processed via UPI, making resilience mission-critical.
