Paytm Not On NHAI List Of 32 Banks Authorised To Issue New FASTags: Report

Paytm Fastag: As per the RBI directive, Paytm FASTags will cease to operate after February 29, following the prohibition imposed on PPBL from offering services starting next month

RBI action against Paytm Payments Bank follows a comprehensive system audit report and compliance validation by external auditors.

The National Highways Authority of India (NHAI) has issued a notice to advising highway users to acquire FASTags from authorised banks, but not from Paytm Payments Bank Ltd (PPBL), according to a report published in the ET. The directive comes as Paytm Payments Bank Ltd (PPBL) faces service disruption, with 32 listed banks authorised to issue FASTags, excluding PPBL.

As per the Reserve Bank of India's (RBI) directive, Paytm FASTags will cease to operate after February 29, following the prohibition imposed on PPBL from offering services starting next month.

Authorised Banks On NHAI List

The NHAI has listed some banks for FASTag services that include Airtel Payments Bank, Allahabad Bank, AU Small Finance Bank, Axis Bank, Bank of Baroda, Bank of Maharastra, Canara Bank, Central Bank of India, City Union Bank, Cosmos Bank, Equitias Small Finance Bank, and Federal Bank.

The list also includes Fino Payments Bank, HDFC Bank, ICICI Bank, IDBI bank, IDFC First Bank, Indian bank, Induslnd bank, J&K Bank, Karnataka bank, Karur Vysya bank, Kotak Mahindra Bank, Nagpur Nagarik Sahakari bank, Punjab National Bank, Sarswat bank, State Bank of India, Thrissur District Cooperative bank, UCO Bank, Union bank of India, and Yes Bank.

The RBI's release on January 31 outlined that while withdrawal or utilisation of balances from Paytm customer accounts, including savings and current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, will remain unrestricted until the available balance, other banking services will be discontinued after February 29, 2024. This action against PPBL follows a comprehensive system audit report and compliance validation by external auditors, as stated by the RBI.

As per latest news reports, the Enforcement Directorate (ED) has also started inquiries with senior Paytm executives, collecting documents in response to RBI's actions. The central agency is currently assessing the documents to determine the necessity of a formal investigation into potential irregularities under the Foreign Exchange Management Act (FEMA).

A recent survey conducted by Kirana Club revealed that 42 per cent of local kirana stores across the country have already shifted to other mobile payment applications since the announcement on January 31. Additionally, 20 per cent of respondents expressed their intent to switch to alternative payment apps.

At 11.20 am, shares of Paytm were trading at Rs 331.00 apiece, up 1.77 per cent on the BSE on Friday.