The CAG audited India Post Payments Bank — the government's flagship for financial inclusion — and found that 58% of its 5.13 crore accounts went dormant within two years, UPI failure rates hit 7.82% (RBI allows under 1%), and the system suffered 362 hours of outages in a single year. Some accounts were opened without even verifying the mobile number, with 1.22 crore instances of multiple customers sharing one phone number.
India Post Payments Bank was supposed to bring Digital India to every village post office. The CAG has now confirmed it brought something closer to Digital Theatre. Of the 5.13 crore accounts IPPB proudly opened, 2.98 crore — that's 58% — became dormant within two years, suggesting the bank's customer retention strategy is "open the account, lose the customer." The UPI decline rate ballooned to 7.82% in FY23, nearly eight times the RBI benchmark of under 1%, while the system managed 362 hours of outages in FY24 alone — compared to zero hours for Paytm Payments Bank and 19 for Fino. Accounts were opened without mandatory mobile number verification, with 1.22 crore instances of multiple customer IDs linked to a single phone number, creating what the CAG politely called "security vulnerabilities" and what the rest of us would call "a database where nobody is who they say they are." The last-mile delivery network achieved 0.20 business correspondents per access point against a target of 2-5, which is the banking equivalent of opening a hospital and forgetting to hire doctors.