NHAI Delists PayTM from List Of Authorized Banks For Fastag Service


The National Highway Authority of India (NHAI) has removed Paytm Payments Bank Ltd (PPBL) from its list of authorized banks for FASTag services. This move comes after the Reserve Bank of India (RBI) took action against PPBL for allegedly violating know-your-customer (KYC) norms and onboarding norms.

FASTag is a device that uses Radio Frequency Identification (RFID) technology for making toll payments electronically. It is affixed to the windshield of a vehicle and allows motorists to pass through toll plazas without stopping to pay cash.

The NHAI said in a statement that it had taken the decision to remove PPBL from its list of authorized banks “in view of the regulatory restrictions imposed on PPBL by the RBI.  The RBI had imposed restrictions on PPBL in January 2024, barring it from onboarding new customers for a period of six months. The central bank also directed PPBL to appoint an independent auditor to carry out a comprehensive audit of its IT systems and submit a report within three months.

The NHAI said that the decision to remove PPBL from its list of authorized banks would not affect existing FASTag users who have linked their Paytm accounts to their FASTags. However, new users will not be able to link their Paytm accounts to FASTags issued by other banks.

Coming soon: GPS-based toll booths

The NHAI has listed 30 other banks that are authorized to issue FASTags. These include State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and Yes Bank. The removal of PPBL from the list of authorized banks is a setback for the company, which has been aggressively promoting its FASTag services. Paytm had launched its FASTag services in 2016 and had claimed to have issued over 100 million FASTags by March 2022.

The company said in a statement that it was “disappointed” with the NHAI’s decision and that it was “committed to complying with all regulatory requirements.” Paytm is not the only fintech company that has faced regulatory action from the RBI in recent months. The central bank has also taken action against PhonePe and Amazon Pay for alleged violations of KYC norms.

fastag kyc january 31st 2024 deadline

The RBI’s actions have raised concerns about the future of the fintech industry in India. The industry has been growing rapidly in recent years, but it is now facing increased scrutiny from the regulator. It is important to note that the NHAI’s decision to remove PPBL from its list of authorized banks is not a ban on Paytm. The company can still offer its other services, such as digital payments and e-commerce. However, the decision will make it more difficult for Paytm to promote its FASTag services.

The RBI’s actions against fintech companies are likely to have a ripple effect on the industry. Other fintech companies may now be more cautious about their compliance with regulations. This could slow down the growth of the industry in the short term. However, in the long term, it could lead to a more mature and responsible fintech industry in India.

Fastag will be deactivated if KYC not done!

The post NHAI Delists PayTM from List Of Authorized Banks For Fastag Service first appeared on Cartoq.



Source link

About The Author

Scroll to Top