Major Development for Paytm FasTag Users: Exclusion from Approved Banks List

Attention India
3 Min Read

Recently, the Reserve Bank of India (RBI) issued a directive to Paytm Payments Bank (PPBL), instructing it to halt all deposits and top-ups in user accounts, wallets, FASTags, and other instruments by February 29. This directive has further implications for Paytm FASTag users, as the road highway toll authority has excluded Paytm Payments Bank from the list of authorized banks for issuing new FASTags.

RBI Directive and Its Impact:

The RBI’s directive to PPBL, prompted by serious supervisory concerns and chronic non-compliance, prohibits the bank from accepting new clients and transactions after March 11, 2022. This includes deposits, credit transactions, and top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and more. While users can request refunds, cashback, or interest, they must adhere to the cessation of deposit-related activities after February 29, 2024.

Changes for Paytm FASTag Users:

As a consequence of PPBL’s exclusion from the list of approved banks for issuing new FASTags, over 20 million existing Paytm FASTag users will need to obtain new RFID stickers. The road highway toll authority has specified a list of 32 banks from which users must now procure their FASTags, underscoring the need for compliance with regulatory requirements.

Implications on Banking Services:

The RBI’s directive extends beyond FASTag issuance, encompassing all banking services provided by PPBL. After February 29, 2024, the bank will be restricted to facilitating specific transactions such as fund transfers, BBPOU, and UPI facilities. Other banking services, including new account openings, will be discontinued.

Closure of Nodal Accounts:

One97 Communications Ltd., the parent company of Paytm, has a 49% stake in PPBL. Despite this, PPBL is classified as an associate rather than a subsidiary. The RBI mandates the closure of One97 Communications Ltd. and Paytm Payments Services’ nodal accounts by February 29, 2024, to ensure compliance with regulatory directives.

Timeline for Compliance:

All pipeline transactions and nodal accounts, initiated on or before February 29, 2024, must be settled by March 15, 2024. Following this deadline, no further transactions will be permitted, emphasizing the need for timely adherence to regulatory guidelines.

Conclusion:

The exclusion of Paytm Payments Bank from the list of approved banks for issuing new FASTags marks a significant development for Paytm FASTag users. This move, in conjunction with the RBI’s directive, underscores the importance of regulatory compliance and adherence to banking standards. As users transition to new RFID stickers and PPBL undergoes operational changes, timely compliance with regulatory requirements will be crucial for all stakeholders involved. This article presents a detailed analysis of the recent developments concerning Paytm Payments Bank and their implications for FASTag users, banking services, and compliance with regulatory directives.

-Prisha Jaiswal

Share This Article
Leave a comment

Leave a Reply