NHAI Names Axis, HDFC and 7 More Banks To Facilitate Payments At Toll Booths Amid Paytm Crisis: Report

NHAI's action is intended to safeguard toll collection at these checkpoints, particularly after March 15

Axis Bank, HDFC Bank, ICICI Bank, IDBI Bank, IDFC First Bank, and Kotak Mahindra Bank are among the nine banks authorised by the Indian Highways Management Company Ltd. under the NHAI ( Image Source :Getty )

The National Highways Authority of India (NHAI) has reportedly designated nine banks to facilitate payments at 247 toll stations where the 'acquirer' is Paytm Payments Bank, that was prohibited from accepting deposits in a regulatory clampdown last month by the Reserve Bank of India, according to a report by The Economic Times.

Axis Bank, HDFC Bank, ICICI Bank, IDBI Bank, IDFC First Bank, and Kotak Mahindra Bank are among the nine banks authorised by the Indian Highways Management Company Ltd. under the NHAI and are being evaluated as potential alternatives to replace Paytm Payments Bank, states the report.

The toll plazas managed by Paytm Payments Bank, totalling 247, contribute approximately 14 per cent of the country's daily national highway toll collection, averaging Rs 190 crore. In this context, an "acquirer" refers to a bank or financial institution responsible for processing payments (FASTag) at toll plazas on behalf of the issuing bank and routing them through payment networks to the issuing bank. NHAI compensates the acquirer bank at toll stations with 0.13 per cent of the daily collection as a program management fee.

According to the report, NHAI's action is intended to safeguard toll collection at these checkpoints, particularly after March 15, the date on which Paytm Payments Bank, an affiliate of One 97 Communications, has been instructed by the RBI to cease all essential payment services.

Meanwhile, on Friday, NHAI issued a notice advising highway users to obtain FASTags from authorised banks but not from Paytm Payments Bank Ltd (PPBL). This directive follows service disruption faced by PPBL, with 32 listed banks authorised to issue FASTags, excluding PPBL.

As per the RBI's announcement on January 31, withdrawal or use of funds from Paytm customer accounts, such as savings and current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, will continue without restriction until the available balance is exhausted. However, other banking services will cease after February 29, 2024, now extended to March 15, 2024. The RBI's decision to take action against PPBL follows a thorough audit report and compliance validation conducted by external auditors, as stated by the RBI.