Paytm Payments Bank has been banned from issuing new FASTags due to instances of regulatory non-compliance discovered by the National Highways Authority of India arm, Indian Highways Management Company (IHMC).
Service Level Agreement Parameters: Paytm Payments Bank was found to be in non-compliance with service level agreement parameters during an agency audit, according to the report. The ban includes Paytm Payments Bank’s restriction from taking on new toll plazas.
Show-Cause Notice: IHMC issued a show-cause notice to Paytm Payments Bank, seeking an explanation for non-compliance and why penal action should not be taken against the fintech. The notice questions the reasons for freezing the issuance of Paytm Payments Bank FASTags.
Customer Complaints and Audit Findings: The ban followed an audit prompted by customer complaints. Complaints ranged from delays in FASTag activation to unauthorized deductions, issuance of the same FASTag to multiple individuals, and delays in recharge credits to the FASTag wallet.
KYC Update Deadline: The last date for updating KYC for FASTag is January 31, 2024. Failure to update KYC by the deadline will result in the deactivation and delisting of FASTags by the issuing bank, as per an official notification.
Customer Grievances on Social Media: Users expressed grievances on social media platform X regarding various issues with Paytm FASTags. Grievances included delays in activation, unauthorized deductions, and instances of the same FASTag being issued to multiple individuals.
Future Toll Collection System: The government may introduce a GPS-based toll collection system, potentially making FASTags redundant. This new system is expected to enhance toll collection efficiency.
