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Paytm Payments Bank Excluded From FASTag List

Paytm Payments Bank Excluded From FASTag List

What is FASTag and Why is it Important?

FASTag is a device that uses radio frequency identification (RFID) technology to enable automatic toll collection on highways. It is attached to the windshield of a vehicle and linked to a prepaid account. When the vehicle passes through a toll plaza, the toll amount is deducted from the account without any manual intervention. This saves time, fuel, and money for the highway users and the toll operators.

FASTag was made mandatory by the Ministry of Road Transport and Highways (MoRTH) for all vehicles from February 15, 2021. The aim was to reduce congestion, pollution, and corruption at toll plazas and to promote digital payments. According to MoRTH, FASTag has increased the toll revenue by 20% and reduced the waiting time by 50%.

Which Banks are Authorized to Sell FASTags?

There are 32 banks that are authorized by the National Highway Authority of India (NHAI) to sell FASTags. These banks have partnered with the Indian Highways Management Company Ltd (IHMCL), which is a joint venture of NHAI, concessionaires, and financial institutions. IHMCL manages the FASTag program and operates the official Twitter handle @FASTagOfficial.

The list of authorized banks for FASTags is given below:

Bank NameBank Name
Airtel Payments BankKotak Mahindra Bank
Allahabad BankNagpur Nagarik Sahakari Bank
AU Small Finance BankPunjab National Bank
Axis BankSaraswat Bank
Bank of BarodaSouth Indian Bank
Bank of MaharashtraState Bank of India
Canara BankThrissur District Cooperative Bank
Central Bank of IndiaUCO Bank
City Union BankUnion Bank of India
Cosmos BankYes Bank
Equitas Small Finance Bank
Federal Bank
FINO Payments Bank
IDFC First Bank
Indian Bank
IndusInd Bank
J&K Bank
Karnataka Bank
Karur Vysya Bank

Why is Paytm Payments Bank Not on the List?

Paytm Payments Bank, which is one of the largest issuers of FASTags in India, is not on the list of authorised banks. This means that the nearly 20 million Paytm FASTag users will have to get new RFID stickers from other banks if they want to continue using the FASTag service.

The reason for this exclusion is not clear, but it could be related to the recent restrictions imposed by the Reserve Bank of India (RBI) on Paytm Payments Bank. The RBI had barred Paytm Payments Bank from adding new customers and issuing new debit cards after finding some violations of the norms for payments banks. The RBI had also asked Paytm Payments Bank to remove its chief executive officer and appoint a new one.

These restrictions have affected the business and valuation of Paytm Payments Bank, which is a subsidiary of the digital payments giant Paytm. According to a report by Macquarie Group, a global financial services firm, Paytm Payments Bank faces a serious risk of losing customers and revenue because of the RBI curbs. The report also said that Paytm Payments Bank’s business model and monetization prospects are in jeopardy.

The report estimated that Paytm Payments Bank had lost about Rs 27,000 crore in value in the 11 days following the RBI’s ban. This accounts for 57% of its value, which was Rs 47,000 crore before the ban. The report also said that Paytm Payments Bank’s share of the FASTag market had dropped from 40% to 25% in the same period.

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