RBI to exempt FASTags from KYC norm

Currently, vehicle owners need to give details of the vehicle, including its registration proof, and also relevant documents for individual identity and address to acquire FASTags. This process takes about 5-10 minutes. As per the current norm, once a FASTag is issued, the KYC has to be done within a year.

NEW DELHI: The road transport and highways ministry has approached the Reserve Bank of India to exempt those acquiring FASTags from the ‘know your customer’ (KYC) norm. The ministry’s move is aimed at making immediate issuance of smart tags possible even near toll gates.

Highways Ministry urges RBI to exempt FASTags from KYC norm

Currently, vehicle owners need to give details of the vehicle, including its registration proof, and also relevant documents for individual identity and address to acquire FASTags. This process takes about 5-10 minutes. As per the current norm, once a FASTag is issued, the KYC has to be done within a year. The KYC is done by banking correspondents and going by the market standard, banks spend at least Rs 300 on each case.

Sources said highways minister Nitin Gadkari took up the issue with RBI governor Shaktikanta Das last week. Gadkari has been of the view that banks and NHAI should give a tag for a vehicle near the toll gate rather than charging double the user fee if one is caught entering a dedicated lane.

“FASTag is currently used for paying toll amount electronically and there is no cash transaction. One can upload the amount only by creating a wallet and the wallets are either linked to the users’ bank accounts or credit cards. Banks have already done KYC for their bank accounts or credit cards. Moreover, since this is a closed loop payment system, the relaxation should be possible,” an official said.

A common example of a closed loop payment system is Delhi Metro cards and in this case, there is no need for KYC. Over 80 lakh FASTags have been sold and the government has set a deadline of December 15 for complete rollout.

However, there is a catch. KYC will become necessary once NHAI brings in toll roads owned by state governments under this scheme and allow use of FASTag to pay parking and other such charges. “In such cases, it will be a semi-open loop payment system,” the official said.

Source: http://bit.ly/36hjHd9