Can you still use Paytm FASTag after 29 February?

In a significant move, the Reserve Bank of India (RBI) has directed Paytm Payments Bank to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments after 29 February. The direction follows persistent non-compliances and continued material supervisory concerns, the central bank said in a statement. So, if you are a Paytm FASTag user, here’s all you need to know. RBI directs PPBL to stop accepting deposits The RBI said, “No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after 29 February 2024, other than any interest, cashbacks, or refunds which may be credited anytime.” “No other banking services, other than those… like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU, and UPI facility should be provided by the bank after 29 February 2024,” it added, according to PTI. [caption id=“attachment_13676622” align=“alignnone” width=“640”] RBI’s order will essentially restrict the fintech company’s operations and impact its huge customer base. File image/Reuters[/caption] The central bank also said the “nodal accounts” of One97 Communications Ltd and Paytm Payments Services are to be terminated at the earliest, in any case not later than 29 February 2024. Settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) should be completed by 15 March 2024 and no further transactions would be permitted thereafter, it added. Earlier, Indian Highways Management Company (IHMCL), the arm of NHAI, had barred Paytm Payments Bank from issuing fresh FASTags after it found that Paytm Payments Bank was not following the parameters prescribed in the service-level agreement. Impact on Paytm FASTag Users will be able to use the Paytm FASTag after 29 February. However, a few things have changed. One will not be able to top off or recharge their Paytm FASTags using the Paytm Wallet from 29 February, per the RBI’s directive. After the date of 29 February, Paytm FASTag will continue to work with the balance you have. However, once that amount is over, it can’t be recharged any further. Neither can the FASTag be ported to another bank from Paytm Payments Bank. Hence, it would be most appropriate for people to buy a new FASTag from another supported bank. “There are a set of products that the Paytm app offers to users, some products like FASTag are already distributed by other banks will continue,” Bhavesh Gupta, President and COO, Paytm was quoted saying during the conference call on Thursday. According to Times Now, the NHAI oversees FASTag, an electronic toll collection system in India. Through the use of prepaid wallets and Radio Frequency Identification (RFID) technology, it makes toll booth payments easier. One97 Communications, which owns Paytm brand, holds a 49 per cent stake in Paytm Payments Bank Limited but classifies it as an associate of the company and not as a subsidiary, reported PTI. The RBI’s action won’t affect “user deposits in their savings accounts, Wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances,” OCL stated in a statement to the stock exchanges. It’s important to remember, though, that credit top-ups for Paytm users are blocked after 29 February. Paytm to work with other banks After Paytm Payments Bank was barred by the RBI from taking deposits or top-ups, Paytm announced that it would now “work with various other banks and not PPB.” The company posted updates on X following a conference call with CEO and founder Vijay Shekhar Sharma, during which the business said that it would “continue to decline and decrease dependency on PPB.”

"Two years ago, embargo was placed earlier on on-boarding new customers, we had already started to work with banks, and we will continue to decline & decrease dependency on PPB," says our Founder and CEO @vijayshekhar

— Paytm (@Paytm) February 1, 2024

Sharma said, “Two years ago, embargo was placed earlier on on-boarding new customers, we had already started to work with banks, and we will continue to decline and decrease dependency on PPB. OCL and PPSL are already in process of moving nodal accounts to other banks, and marketing business services are not affected due to these directions.” Paytm stated, “There are no details sent to us separately by RBI,” but acknowledged that this was a “speed bump” for the business. “The keyword here is that this is a discussion between Paytm Payments Bank and the central bank.” According to Indian Express, Paytm President Madhur Deora was quoted as saying, “Going forward, we will work with large banks who also provide these services to other consumer companies.” Services that will be affected Customers who make Unified Payments Interface (UPI)-based payments through the Paytm app won’t experience any immediate effects. However, if you make UPI payments using an account linked to Paytm Payment Bank, that account will stop working after 29 February. You won’t be impacted if your UPI address is connected to other banks, such Axis or HDFC Bank, explained Economic Times. Because PPBL is necessary for a user’s Paytm wallet, wallet services will be interrupted. Up to this month’s 29th, money can be deposited into the wallet. Clients are able to spend the money till they are exhausted. With inputs from agencies