Paytm Fiasco: After ED Case, Woes Continue, As Payment Arm Not On List Of 32 Banks For FASTag

Paytm Fiasco: After ED Case, Woes Continue, As Payment Arm Not On List Of 32 Banks For FASTag

After the RBI decision, that wrecked the company's prospects, the unicorn has been dealing with one blow after the other.

Juviraj AnchilUpdated: Friday, February 16, 2024, 11:40 AM IST
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Paytm a | Image: Paytm (Representative)

The fortunes of the Vijay Shekhar Sharma-led do not appear to show signs of any improvement. After the RBI decision, that wrecked the company's prospects, the unicorn has been dealing with one blow after the other. First its shares tanked, losing as much as 10 per cent in just a day's trade. A discussion with RBI, did not yield any result, as the RBI governor refused to intervene and tweak the decision. This was followed up by the Enforcement Directorate, who questioned senior Paytm executives and taken submission of documents from them following the recent RBI action of barring Paytm Payments Bank Ltd from accepting deposits or top-ups in any customer account.

FASTag slows Paytm further

Now, the company has been handed another jolt, Paytm Payments Bank was given shoulder and left out of the list of 32 banks authorisied to issue new FASTag for vehicles, issued by the road tolling authority.

Amid the confusion, the company has tried to assuage stakeholders and customers alike, as the prospects appear to be flailing, but the reasoning for this decision from the The Indian Highway Management Company (IHMCL), the entity responsible for toll management, is pegged on establishing a system, where Paytm FASTag users do not face any issues at tolling booths after RBI's February 29 deadline for the bank, reported The Economic Times citing sources.

FASTag is an electronic toll collection system implemented by the National Highways Authority of India (NHAI). It utilizes Radio Frequency Identification (RFID) technology to facilitate seamless toll payments at toll plazas across the country.

FEMA and PMLA worries

Amidst all this, the ED case which is looking for violation made by the company under FEMA (Foreign Exchange Management Act) has not found any violations yet, and would file a case, if it finds any aberration. Meanwhile, an investigation under the Prevention of Money Laundering Act (PMLA) involving Paytm is currently going on.

The company despite lack of ostensible support from the government, has received support other members of the of business fraternity, particularly, the Fintech segment. Notably, BharatPe co-founder Ashneer Grover lashed out at the RBI, backing the embattled company.

The road ahead for the company looks difficult, as of Friday, Paytm shares were trading at Rs 329 per share (11:30 IST)

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