Paytm payments bank faces restrictions on issuing new FASTags

Case against Paytm Payments Bank by ED under FEMA violations

Case against Paytm Payments Bank by ED under FEMA violations

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Following an audit by the Indian Highways Management Company (IHMCL), Paytm Payments Bank has been barred from issuing new FASTags for not complying with the prescribed parameters in the service level agreement (SLA). IHMCL, the NHAI’s arm overseeing toll-related matters, has also restricted the bank from taking up additional toll plazas under the National Electronic Toll Collection. 

In a letter, IHMCL has asked Paytm Payments Bank to explain why penalties for non-compliance should not be imposed. 

The move comes after Reserve Bank of India had put a freeze on opening fresh savings bank accounts.

IHMCL pointed out that the decision to impose curbs followed an audit ordered by it in the wake of a large number of customer complaints.

“During the audit, various complaints were received from the auditor that the bank did not cooperate with them in carrying out the audit,” the agency said, while describing this as “a matter of concern”.

This decision won’t affect the existing FASTag customers of the bank. The move comes amid a freeze on opening new savings bank accounts by the Reserve Bank of India.

IHMCL’s decision stems from an audit prompted by numerous customer complaints, with concerns raised about the bank’s lack of cooperation during the audit process.

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