Paytm FASTag FAQs: How to deactivate it, get a new tag, and all that you need to know

The Indian Highways Management Company (IHMCL), a subsidiary of the National Highway Authority of India (NHAI), has barred Paytm Payments Bank Ltd (PPBL) from issuing new FASTags due to its non-compliance with the parameters outlined in the service-level agreement. At present, there are 32 banks on the approved list for FASTag issuance, and NHAI recommends users to obtain FASTags from these banks. However, the Reserve Bank of India (RBI) has extended the deadline for PPBL from February 29 to March 15.

RBI Releases Updated Guidelines

According to the recent press release from the RBI issued last week regarding Paytm Payments Bank, customers will no longer be allowed to make additional deposits, credit transactions, or top-ups in their accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc., after March 15, 2024. This deadline has been extended from the previously set date of February 29, 2024. However, exceptions may include interest, cashbacks, sweep-ins from partner banks, or refunds, which may be credited at any time.

What is FASTag?

FASTag is an electronic toll collection system implemented in India, managed by the NHAI. It uses Radio Frequency Identification (RFID) technology to enable seamless payments at toll booths using prepaid wallets. FASTags are affixed to the windshields of vehicles and facilitate automatic deduction of toll charges as vehicles pass through toll plazas, eliminating the need for manual cash transactions.

The Centre mandates the use of FASTags on all four-wheeler vehicles to streamline toll collection processes and enhance efficiency on national highways.

Also Read | No FASTag recharge to be allowed via Paytm payment bank post March 15

FASTags are Not Interoperable: RBI

Under the new "One Vehicle, One FASTag" initiative, each FASTag can only be linked to a single vehicle, and vice versa. This means that to acquire a new FASTag, users must deactivate their existing one. Notably, users cannot undergo the KYC (Know Your Customer) process for a new FASTag unless their old FASTag is deactivated.

The apex bank's FAQs on Paytm Payment Banks further reinforce this. The RBI has clarified that FASTags are not interoperable, indicating that customers will need to close their PPBL accounts and request a refund. Later, they must obtain a new FASTag from a different bank.

Also Read | Are you a Paytm Payments Bank account holder? Here’s what you can do

What Happens to Your Paytm FASTag After March 15?

According to the recent directive from the central bank, Paytm FASTag customers are allowed to use their existing balances. However, they are restricted from adding additional funds to these instruments beginning from March 16.

In an earlier post on the social media platform X, formerly known as Twitter, Paytm announced that users can continue using the existing balances on their Paytm FASTag. The company also stated that it is actively working on solutions to ensure a seamless customer experience and will provide updates accordingly.

How to Deactivate Paytm FASTag

To deactivate your Paytm FASTag, follow these steps:

(A) Download the Paytm app on your mobile device and log in using your existing credentials.

(B) In the app, type 'FASTag' in the search bar and then tap on 'Manage FASTag' under the 'Services' section.

(C) You will be directed to a screen showing all the active FASTag accounts linked to your Paytm number.

(D) Scroll down to the bottom of the page and click on 'Help & Support'.

(E) Next, tap on 'Need help with non-order related queries?' and select the option 'Queries related to updating FASTag profile'.

(F) You should now see an option that says 'I want to close my FASTag'. Click on it and follow the subsequent steps to deactivate your Paytm FASTag.

Multiple Options for FASTag Acquisition

Users have multiple avenues for acquiring a new FASTag to ensure smooth electronic toll collection services on highways. One option is to purchase a new FASTag from any of the 32 banks listed on the NHAI website. These banks are authorised issuers of FASTags, ensuring compliance with regulatory standards.

Additionally, users have the convenience of ordering FASTags directly from NHAI. This streamlined process offers flexibility and accessibility, catering to the diverse needs of motorists across the country.

Here is the list of banks authorised by the NHAI for issuing FASTags:• Airtel Payments Bank• Allahabad Bank• AU Small Finance Bank• Axis Bank• Bank of Baroda• Bank of Maharashtra• Canara Bank• Central Bank of India• City Union Bank• Cosmos Bank• Equitas Small Finance Bank• Federal Bank• FINO Payments Bank• HDFC Bank• ICICI Bank• IDBI Bank• IDFC First Bank• Indian Bank• IndusInd Bank• Jammu & Kashmir Bank (J&K Bank)• Karnataka Bank• Karur Vysya Bank• Kotak Mahindra Bank• Nagpur Nagarik Sahakari Bank (Nagpur Nagarik)• Punjab & Sind Bank• Punjab National Bank (PNB)• Saraswat Bank• South Indian Bank• State Bank of India (SBI)• Syndicate Bank• Union Bank of India

• Yes Bank

Paytm Clarifies: Customers can still Withdraw Funds

Paytm has clarified on its website that following the RBI's specified deadline, customers will no longer be able to deposit or add funds to their Paytm Payments Bank Account/Wallet. However, there are no restrictions on withdrawing funds from existing balances, even after the deadline.

Also Read | Banking Central | End of the road for Paytm Payments Bank?

Paytm Payments Bank Accounts Will Cease to Accept Salary or Other Deposits

After March 15, 2024, salary or other such deposits will no longer be accepted in PPBL accounts. Likewise, subsidies or other benefits will not be accessible in these accounts. Customers are advised to make alternative arrangements to avoid inconvenience. This measure aligns with the changes in operations for PPBL accounts as per the latest directives from regulatory authorities.

Estimated Impact Widespread

Given that there are an estimated 60-75 lakh merchants utilising PPBL accounts and many Paytm users who also opened accounts with PPBL, the impact is widespread. However, there is no precise data on the number of non-merchant payments bank accounts created.

As there is no recourse other than closing these savings accounts, account holders must transfer their balances to other banks. The RBI has not specified whether another bank will acquire or migrate these accounts, leaving the fate of these accounts uncertain.

To mitigate the impact, Paytm has arranged for Axis Bank to take over all the nodal bank accounts previously held by PPBL.

RBI Provides No Provision for Acquisition of One97 Assets

Regarding One97 Communications, the owner of the Paytm brand, wallets, National Common Mobility Cards (NCMC), and FASTag business operated by PPBL, the banking regulator has not specified or mentioned any provision for another bank to potentially acquire these assets or customers, along with the prepaid payment instrument (PPI) license required to operate wallets. Since PPBL held the licences to operate these instruments, customers will need to utilize the remaining balance or close their accounts and request a refund from PPBL.

The RBI's FAQ didn't indicate that another bank or financial institution with a licence could step in to transfer or migrate customers using these instruments. The apex bank explicitly states that the balance must be utilised, and the accounts closed thereafter. It even advises customers to obtain new accounts.

Future Possibility of Paytm Wallets Exist, but Immediate Return Unlikely

While it's technically feasible for Paytm to reintroduce wallets in the future, the current situation does not indicate an immediate return. Paytm, originally established as a mobile payments company, initially operated through wallets before obtaining a license for a Payments Bank. One97 surrendered its licence and began using the PPI licence of PPBL.

In the past, when One97 shifted its wallet customers to PPBL, the transition was seamless, with customer data, KYC details, and transaction history smoothly transferred. From a technical standpoint, a similar migration could occur again. However, it's vital to note that the current circumstances are not typical.