Paytm Crisis: Now, No Room For The Fintech Major In New FASTags List

Paytm Crisis: Now, No Room For The Fintech Major In New FASTags List

SUMMARY

The Indian Highway Management Company has released a list of 32 authorised banks for obtaining FASTags

Paytm Payments Bank was omitted from the list to safeguard against potential issues for Paytm FASTag users at tolling booths

Earlier, IHMCL barred Paytm Payments Bank from issuing fresh FASTags

The road tolling authority has issued a fresh alert urging highway users to buy FASTags from authorised banks and the name of paytm has been omitted from the list. This comes close on the heels of the Reserve Bank of India barring the payments bank from accepting deposits from customers after February 29.

Taking to its official X (formerly Twitter) handle, Indian Highway Management Company (IHMCL), the electronic tolling arm of the National Highways Authority of India (NHAI), has put out a list of 32 authorised banks from where commuters can buy FASTags for vehicles. 

“Travel hassle-free with FASTag! Purchase your FASTag today from the authorised banks listed below,” IHMCL said on a post, excluding Paytm Payments Bank from the list of 32 authorised banks.

IHMCL is the arm of NHAI that deals with matters related to tolls.

As per ET’s report, citing sources, the move is aimed at ensuring that millions of Paytm FASTag users do not face any hassle while using toll roads after the cut-off date.

The report further said that currently, no bank is willing to onboard Paytm FASTag users and the only recourse for such customers is to cancel their FASTag and purchase new ones from any of the banks listed by IHMCL.

Earlier it was reported that IHMCL barred Paytm Payments Bank from issuing fresh FASTags after an audit by the agency found that the entity was not complying with the parameters prescribed in the service-level agreement (SLA).

In a letter, IHMCL called for a response from Paytm Payments Bank, questioning why the company should not face penalties for its non-compliance. Following Paytm’s situation, other entities are now under scrutiny and might also face similar actions.

The RBI on January 31 barred Paytm Payments Bank from taking deposits, credits, or processing top-up transactions in its customer accounts for ‘persistent non-compliances’. The bank has also been barred from processing other banking services like UPI facilities and funds transfers from February 29.

Meanwhile, the central bank’s governor Shaktikanta Das on Monday said there is “hardly any room” to review the action on the payments bank.

Due to the ongoing issue, brokerage Macquarie recently downgraded One97 Communications to ‘underperform’ from an earlier ‘neutral’ rating and lowered its price target (PT) to INR 275 from INR 650. The brokerage’s current target implies a downside of 27.7% to the stock’s last close.

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