India Post Payments Bank Faces Criticism Over Account Verification Issues

Original: India Post Payments Bank opened accounts without mobile verification: Report

The Economic Times•Apr 2, 20262 min

In a Nutshell

The Comptroller and Auditor General of India reported that India Post Payments Bank (IPPB) opened accounts without proper mobile verification, linking multiple customers to the same number. This has led to high transaction decline rates and operational inefficiencies, undermining customer trust and financial inclusion efforts.

Key Points

01IPPB opened accounts without verifying mobile numbers.
02Multiple customer accounts linked to the same mobile number.
03High transaction decline rates for UPI services at 3.29% in FY 2021-22 and 7.82% in FY 2022-23.
04IPPB experienced 362 hours of UPI service outages in FY 2023-24.
05CAG recommends data cleansing and improved monitoring for better service.

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Full Summary

A report by the Comptroller and Auditor General of India (CAG) revealed that India Post Payments Bank (IPPB) has been opening accounts without verifying mobile numbers, leading to multiple customer accounts being linked to the same number. This practice has resulted in a significant number of inactive accounts and a high transaction decline rate for its Unified Payments Interface (UPI) services, recorded at 3.29% in FY 2021-22 and 7.82% in FY 2022-23, both exceeding the Reserve Bank of India's target of less than one percent. Additionally, IPPB's UPI services faced outages totaling 362 hours in FY 2023-24, far surpassing competitors like Fino and Paytm Payments Bank. The CAG has urged IPPB to enhance its operational efficiency by implementing comprehensive data cleansing to eliminate invalid linkages and improve its IT systems, thereby restoring customer trust and promoting financial inclusion.

Key Figures

3.29%

UPI transaction decline rate in FY 2021-22

7.82%

UPI transaction decline rate in FY 2022-23

362 hours

Total UPI service outages in FY 2023-24

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Why It Matters

The issues at IPPB could lead to decreased customer trust and hinder financial inclusion efforts, affecting users who rely on its banking services.

Who is affected

Customers of India Post Payments Bank, particularly those using UPI services.

What to know

Customers should monitor their account activity and report any discrepancies, while IPPB needs to address the highlighted issues to restore confidence.

FAQ

The report highlighted that IPPB opened accounts without mobile verification and linked multiple customer accounts to the same mobile number, leading to operational inefficiencies.

The CAG recommended that IPPB implement robust monitoring, complete data cleansing, and strengthen its IT systems to improve service quality and customer trust.

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