FASTag: As per a report, Paytm Payments Bank has been prohibited from issuing and top-up FASTags. The stated reason for the ban is Paytm’s failure to adhere to the guidelines outlined in the service-level agreement (SLA) by the Indian Highways Management Company Ltd (IHMCL), the branch of NHAI that handles toll-related issues.
According to the report, Paytm has been prohibited from acquiring any additional toll plazas that are a part of the National Electronic Toll Collection which includes the whole national highway network.
Other Fintech Companies on Radar
In a letter to the bank last Friday, IHMCL also requested Paytm Payments Bank’s explanation for why the business shouldn’t be penalized for non-compliance. According to the report quoting NHAI officials, in addition to Paytm, other Fintech firms are also under investigation and could be subject to similar measures and penalties.
Why Paytm Payments Bank is Banned By IHMCL?
Non-compliance with the Service Level Agreement (SLA)
The key reason for the bar was Paytm’s failure to meet the standards outlined in their Service Level Agreement (SLA) with the Indian Highways Management Company (IHMCL) which is the agency responsible for toll collections on national highways.
Delays in Settling Toll Payments
Another major reason to ban Paytm Payments Bank from issuing and recharging FASTag is mismanagement and delays in settling toll payments. IHMCL has taken this step to ensure timely settlement of toll payments as it is very crucial for efficient highway operations and delays by Paytm could cause financial issues for IHMCL.
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