The National Highway Authority of India (NHAI) has taken Paytm Payments Bank Ltd (PPBL) off its list of authorised banks for FASTag service due to regulatory issues.
The NHAI lists 32 payment banks, scheduled commercial and small finance banks, that are authorised for FASTag services, which the Indian Highways Management Company Ltd. manages This includes prominent entities such as Airtel Payments Bank, Axis Bank, HDFC Bank, ICICI Bank, and State Bank of India, among others.
What are FASTag services?
FASTag is a device that utilises Radio Frequency Identification (RFID) technology to enable direct toll payments while the vehicle is in motion. The RFID chip is affixed on the vehicle's windscreen, facilitating toll payments linked to the user's account.
FASTag is operational at over 750 toll plazas across national and state highways in India, streamlining toll collection processes and reducing travel time.
READ: Paytm Payments Bank curbs may have limited impact, shows data
READ: Paytm Payments Bank curbs may have limited impact, shows data
Paytm Payments Bank dispute and regulatory action
On January 31, the Reserve Bank of India (RBI) imposed major business restrictions on Paytm Payments Bank, including restrictions on accepting fresh deposits and credit transactions. The RBI instructed Paytm Payments Bank to cease onboarding new customers and terminate nodal accounts by February 29, 2024.
In the post-monetary policy committee (MPC) meeting on February 8, RBI Governor Shaktikanta Das announced plans to release a frequently asked questions (FAQs) document to address concerns regarding Paytm Payments Bank and other related matters raised by customers and merchants on the payment platform.
The RBI was also due to meet with NHAI and the National Payments Corporation of India (NPCI), among other stakeholders, sometime this week before releasing the FAQs.
