SBI’s UPI transaction failure rate highest among peers in FY25; Axis Bank has the lowest, says report

State Bank of India (SBI), India's largest lender, witnessed the most number of Unified Payments Interface (UPI) transaction failures in fiscal 2025, while Bank of Baroda, HDFC Bank, ICICI Bank and Axis Bank fared much better, an analysis of UPI transaction failures showed, reported Hindu Business Line.

SBI, which is the biggest UPI remitter bank with over 4.95 billion transactions in March alone, had a technical decline (TD) rate of 0.9 per cent, while the second-largest public sector bank, Bank of Baroda, had a technical decline rate of 0.03 per cent.

In March, HDFC Bank (which reported 1.5 billion transactions) saw a technical decline rate of 0.02 per cent, whereas for Axis Bank, the corresponding figure was 0.03 per cent. For ICICI Bank, this was 0.13 per cent.

Similar trends were seen in most months of FY25. In March, for instance, Jio Payments Bank (7.23 per cent) and Bandhan Bank (2.48 per cent) were the major banks that reported high TD rates.

Reasons for decline

UPI transaction failures happen at the bank's end for two reasons: (i) business decline (BD) wherein a user enters an invalid pin or incorrect beneficiary account, and (ii) technical decline (TD), where a transaction is declined due to technical reasons, such as unavailability of systems and network issues at the bank or the National Payments Corporation of India (NPCI) end.

Over the last month, multiple major unscheduled downtimes have resulted in UPI outages. The NPCI, the governing body of UPI, is understood to have met bankers and payment ecosystem players this week to deliberate on ways to prevent such outages, which cause major inconvenience to customers.

Extremely high volumes of transaction status API calls, hardware glitches, and maintenance upgrades are reportedly cited for the UPI outages that occurred over the last month.

The NPCI had earlier informally asked lenders to maintain TD rates below 1 per cent, BL reported, quoting a senior executive of a large payment company. However, currently with the rapid rise in UPI transactions, having even 1 per cent TD benchmark causes considerable inconvenience to customers. A sudden spike in UPI transaction volumes during significant events such as the Indian Premier League and major sales by online platforms also adds to the strain on bank servers.

To reduce transaction failures, experts say payment ecosystem players must develop the ability to predict transaction growth, enhance their transaction monitoring system, and conduct hygiene checks of their servers at least monthly and eventually weekly or fortnightly.

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