Paytm Payments Bank Customers Shift FASTag Accounts to HDFC Bank and Axis Bank Amid Regulatory Changes
A significant number of customers from Paytm Payments Bank are transferring their FASTag accounts to HDFC Bank and Axis Bank, responding to recent developments and regulatory changes affecting Paytm Payments Bank. These changes include restrictions imposed by the Reserve Bank of India (RBI).
The transition process has begun smoothly, providing customers with multiple options for FASTag services from different banking institutions. While various banks are being considered, a considerable portion of customers have chosen HDFC Bank and Axis Bank, as revealed by a senior executive from Paytm who wished to remain anonymous.
In compliance with RBI guidelines, Paytm Payments Bank customers using FASTag services won’t be able to recharge or top up their balances after March 15, 2024. However, they can still use their existing balances for toll payments beyond this date.
To assist in the transition, the National Payments Corporation of India (NPCI) has furnished a list of 39 banks for customers to select from, allowing them to choose a bank based on their preferences.
FASTag, managed by the National Highways Authority of India (NHAI), simplifies toll collection using Radio Frequency Identification (RFID) technology, deducting payments directly from linked prepaid or savings accounts.
Furthermore, following directives from NHAI and the Ministry of Road Transport & Highways (MoRTH), Paytm FASTag users were advised to obtain a new FASTag from another bank before March 15, 2024, to avoid penalties or additional fees on National Highways.
The regulatory environment for Paytm Payments Bank shifted in January, with the RBI imposing significant business restrictions. This included a ban on fresh deposits and credit transactions after February 29, citing major irregularities in Know Your Customer (KYC) procedures.
Subsequently, in February 2023, the RBI recommended customers and merchants to transfer their accounts to other banks by March 15, allowing withdrawals or the use of balances without restrictions beyond this date.
