In the wake of regulatory measures by the Reserve Bank of India (RBI) on Paytm Payments Bank, a significant number of its existing FASTag customers are reportedly shifting towards the FASTag services provided by HDFC Bank or Axis Bank.
FASTag is an electronic toll collection system in India, operated by the National Highways Authority of India (NHAI). It employs Radio Frequency Identification (RFID) technology for making toll payments directly from the prepaid or savings account linked to the FASTag.
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According to a report by Moneycontrol, the transition is predominantly proceeding without hitches as customers have a multitude of FASTag services offered by various banks to select from.
“We have seen FASTag customers moving their accounts to several banks but the majority have opted for HDFC Bank and Axis Bank. The process is in the early stages and customers have several banks to choose from,” a senior executive from Paytm told Moneycontrol.
In compliance with the RBI’s directives concerning limitations on Paytm Payments Bank, FASTag users of the bank will no longer have the option to recharge or add funds to their accounts after March 15, 2024. Nonetheless, they retain the ability to utilise their existing balances for toll payments beyond the specified date.
“NPCI has listed 39 banks for customers to choose from. And the choice of a bank is solely based on customer preference,” another source said.
Change in FASTag
On March 13, the National Highways Authority of India (NHAI) advised Paytm FASTag users to procure a new FASTag issued by another bank before March 15, 2024. This will help in avoiding penalties or any double fee charges while commuting on National Highways, said the Ministry of Road Transport & Highways (MoRTH).
RBI restrictions
On January 31, the RBI implemented significant business constraints on Paytm Payments Bank, which included prohibiting the acceptance of new deposits and conducting credit transactions after February 29. The regulatory body identified significant irregularities in KYC procedures, posing serious risks to customers, depositors, and wallet holders.
In February 2023, the RBI advised customers and merchants of Paytm Payments Bank to transfer their accounts to other banks by March 15. The central bank stated that withdrawals or usage of balances by PPBL customers from various accounts, such as savings accounts, current accounts, prepaid instruments, FASTags, and national common mobility cards, would be allowed without limitations up to their available balance, even after March 15.
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