Majority of Paytm Payments Bank’s FASTag customers shifting to HDFC Bank and Axis Bank

In response to recent developments, a substantial portion of Paytm Payments Bank’s FASTag customers are transitioning their accounts to HDFC Bank and Axis Bank. 

This migration comes amidst regulatory changes and directives affecting Paytm Payments Bank, including restrictions imposed by the Reserve Bank of India (RBI).

The transition process, which commenced smoothly, offers customers multiple options for FASTag services from various banking institutions. While a variety of banks are being considered, a significant number of customers have opted for HDFC Bank and Axis Bank, according to a senior executive from Paytm who chose to remain anonymous.

Complying with RBI guidelines, Paytm Payments Bank customers utilizing FASTag services will no longer have the option to recharge or top up their balances after March 15, 2024. However, they can continue utilizing their existing balances for toll payments beyond this date.

To facilitate the transition, the National Payments Corporation of India (NPCI) has provided a list of 39 banks for customers to choose from, allowing them to select a bank based on their preferences.

FASTag, overseen by the National Highways Authority of India (NHAI), streamlines toll collection through Radio Frequency Identification (RFID) technology, deducting payments directly from linked prepaid or savings accounts.

Additionally, in line with directives from NHAI and the Ministry of Road Transport & Highways (MoRTH), Paytm FASTag users were advised to procure a new FASTag from another bank before March 15, 2024, to avoid penalties or additional fees while using National Highways.

The regulatory landscape for Paytm Payments Bank shifted in January, with the RBI imposing significant business restrictions. This included a prohibition on fresh deposits and credit transactions after February 29, citing major irregularities in Know Your Customer (KYC) procedures.

Subsequently, in February 2023, the RBI advised customers and merchants to transfer their accounts to other banks by March 15, allowing withdrawals or utilization of balances without restrictions beyond this date.