Paytm FASTags to Become Inoperative After February 29
In a recent development, the Indian Highways Management Company (IHMCL), the electronic tolling arm of the National Highways Authority of India (NHAI), has advised highway users to purchase FASTags from authorized banks. Notably, Paytm Payments Bank has been excluded from the list of 32 banks mentioned by IHMCL, signaling a shift for the estimated 20 million Paytm FASTag users.
The Reserve Bank of India (RBI) has prohibited Paytm Payments Bank from offering services starting March 1, rendering Paytm FASTags inoperative after February 29. IHMCL, via its official social media handle, urged users to 'travel hassle-free with FASTag' and provided a list of authorized banks, excluding Paytm Payments Bank.
The move aims to ensure a seamless transition for millions of Paytm FASTag users, preventing any inconvenience on toll roads post the cutoff date, according to sources familiar with the matter. However, sources also reveal that no bank is currently willing to onboard Paytm FASTag users. The only option for Paytm FASTag customers is to cancel their existing FASTags and purchase new ones from the authorized banks listed by IHMCL.
India boasts over 70 million FASTag users, with Paytm Payments Bank claiming a 30% market share, equivalent to more than 20 million users. Paytm FASTag users will be able to utilize their tags for toll payments until their balance runs out, but they will be unable to recharge them.
In a letter dated January 19, 2024, IHMCL barred Paytm Payments Bank from issuing new FASTags and taking on new toll plazas due to non-compliance with mandatory Know Your Customer (KYC) norms. Despite RBI Governor Shaktikanta Das stating that the central bank will not review its decision against Paytm Payments Bank, IHMCL is pushing for easier and hassle-free migration of Paytm FASTag users to FASTags issued by other banks.
The list of banks authorized by IHMCL for issuing FASTags includes Airtel Payments Bank, Axis Bank, HDFC Bank, ICICI Bank, State Bank of India, and several others, providing Paytm FASTag users with alternative options for a smooth transition. Paytm Payments Bank has not responded to queries regarding the situation at the time of publishing this report.