Paytm Excluded from Authorized FASTag Issuers Amidst RBI Controversy
In the latest development surrounding Paytm Payments Bank, it has been omitted from the list of 32 banks authorized to issue new FASTags for vehicles. This exclusion comes amidst a controversy ignited by the Reserve Bank of India”s (RBI) crackdown on the bank”s operations.
The Indian Highway Management Company (IHMCL), the tolling arm of the National Highways Authority of India (NHAI), released a list of 32 authorized banks for FASTag issuance, omitting Paytm Payments Bank. IHMCL”s announcement urged travelers to obtain FASTags from the listed banks, raising concerns about potential disruptions for Paytm FASTag users.
As per the The Economic Times, Paytm Payments Bank”s exclusion aims to prevent inconvenience for existing FASTag users, as no bank currently intends to onboard Paytm FASTag users. Consequently, Paytm Payments Bank”s approximately 20 million FASTag users may face the dilemma of either cancelling their current FASTags or procuring new ones from authorized banks.
The backdrop to Paytm Payments Bank”s exclusion lies in recent controversies surrounding its adherence to regulatory guidelines, particularly regarding Know Your Customer (KYC) verification. In January, the RBI released a report highlighting non-compliance issues and mandated the bank to cease operations by February 29.
Citing concerns about potential money laundering risks stemming from inadequate KYC compliance, the RBI stood firm on its decision, despite recent statements from RBI Governor Shaktikanta Das reaffirming the deadline for Paytm Payments Bank to halt all new deposits and transactions.
Since the RBI’s directive, shares of the multinational fintech plummeted massively. After February 29, Paytm FASTags will become inoperative. However, the company has assured its customers that their “money is safe” and the RBI directive does not affect their existing balances. With the looming deadline and regulatory scrutiny intensifying, Paytm Payments Bank finds itself at the center of a multifaceted challenge, affecting millions of its FASTag users nationwide.
As February 29 approaches, the fate of Paytm Payments Bank and its FASTag users remains uncertain, amidst ongoing regulatory pressures and operational hurdles.
