The issue is raising because the custom login form does not contain any form_key and there is a form key validation happening in loginPostAction of magento.
Here is the solution:
Edit template/customer/form/login.phtml and template/persistent/customer/form/login.phtml
If you are using any module for login the also edit the login.phtml file of that plugin.
<input type="hidden" name="form_key" value="<?php echo Mage::getSingleton('core/session')->getFormKey();
add the above code after in the login form before
<ul class="form-list">
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