Lakhs Of IMPS, UPI Transactions Failed On April 1, 2 Due To This Reason; NPCI Accepts Problem

Approximately 4.5 lakh such transactions were affected

Customers looking to make online payments were hit by system failure, due to which the transaction was halted, leading to money not being able to go through to and from another bank. 

The payments system was overloaded and broke down from the stress of a surge in financial transactions at the end of the fiscal year on April 1.

Approximately 4.5 lakh such transactions were affected.

What Happened

National Payments Corporation of India (NPCI), which developed UPI, has acknowledged the same on social media and has attributed the cause to year-end annual system maintenance.

This maintenance process clogged bank systems and delayed transactions upto 24 hours, where earlier it would take mere seconds. 

Customers associated with some of the top banks in India with large retail interfaces have had to bear the brunt who took to complaining on Twitter. 

Then Dillip Asbe, MD and CEO at NPCI,explained that Core Banking Systems of large banks were not functioning as they should have due to the end of financial year processing which takes place on April 1 every year. 

Lessons Learned

The incident exposed some inherent flaws and risks that come with 24×7 online payments systems. Approximately 4.5 lakh such transactions were affected, ie. less than 4.5% of an estimated 10-12 million transactions carried out every day. 

But it was also larger than the typical failure rates which is about 0.5%.

However the chaos finally died down on the evening of April 1, as confirmed by NPCI in a tweet posted the next day. They reassured customers that they could resume with their usual payment activities. 

Not Refunded Yet?

Those still awaiting money to be credited back into their accounts can expect the same to not take too much time since the banks themselves will be penalised Rs 100 per day if they fail to make the reversal within a specified time period.

This fine is imposed by the RBI which mandated in a circular in 2019 that in cases where money was taken from the sender’s account but did not reach the beneficiary, monetary reversal must be done by the end of the next working day. 

In extreme cases where the failed transaction was not corrected within a month, the customer can raise the issue with the local Ombudsman (an official who oversees civil disputes) under The Ombudsman Scheme for Digital Transactions, 2019

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