SUMMARY
The Indian Highways Management Company Ltd has found non-compliance with the prescribed parameters outlined in the service-level agreement
In a letter, IHMCL called for a response from Paytm Payments Bank, questioning why the company should not face penalties for its non-compliance
The decision to impose restrictions came in the aftermath of an audit initiated by IHMCL, prompted by an influx of customer complaints
The Indian Highways Management Company Ltd (IHMCL) has barred Paytm Payments Bank from issuing fresh FASTags after an audit by the agency found that the entity was not complying with the parameters prescribed in the service-level agreement (SLA).
In a letter, IHMCL, the arm of NHAI which deals with toll-related matters, called for a response from Paytm Payments Bank, questioning why the company should not face penalties for its non-compliance, TOI reported. Following Paytm’s situation, other entities are now under scrutiny and might also face similar actions.
However, existing FASTag customers of the bank will remain unaffected by the decision.
IHMCL is the arm of NHAI that deals with matters related to tolls.
The decision to impose restrictions came in the aftermath of an audit initiated by IHMCL, prompted by an influx of customer complaints.
A year ago, Paytm Payments Bank received the final nod from the Reserve Bank of India (RBI) to operate as a Bharat Bill Payment Operating Unit (BBPOU).
A BBPOU is allowed to facilitate bill payment services for various utilities like electricity, phone, gas, and water, as well as for loans, FASTag recharge, credit card bills, education fees, and municipal taxes.
However, in March last year, the RBI banned the payments bank from entertaining any new customers over ‘certain material supervisory concerns’.
The payments bank division of fintech giant Paytm has lately found itself surrounded by several non-compliance issues. Earlier in October, the Reserve Bank of India (RBI) imposed a penalty of INR 5.39 Cr on Paytm Payments Bank for non-compliance with Know Your Customer (KYC) norms.
Meanwhile, Paytm continued to trim its loss, slashing its net loss by 43% to INR 222 Cr in the quarter ended December 2023 from INR 392 Cr during the corresponding period last fiscal. Its operating revenue rose to INR 2,850 Cr in Q3 FY24, up 38% from INR 2,062 Cr in Q3 FY23.
