The highway ministry urges RBI to exempt FASTags from the KYC standard
NEW DELHI: The Ministry of Road and Highway Transportation has approached the Reserve Bank of India to exempt those who acquire FASTags of the standard know your customer (KYC). The ministry movement aims to enable the immediate issuance of smart tags even near toll gates.
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 road minister Nitin Gadkari addressed the problem with the governor RBI Shaktikanta Das last week. Gadkari has been of the opinion that banks and NHAIs should give a tag for a vehicle near the toll gate instead of charging twice the user's fee if one is discovered entering a dedicated lane.
“FASTag is currently used to pay the toll amount electronically and there are no cash transactions. One can charge the amount just by creating a wallet and the wallets are linked to the bank accounts or credit cards of the users. Banks have already performed KYC for their bank accounts or credit cards. Also, since this is a closed circuit payment system, relaxation should be possible, ”said an official.
A common example of a closed circuit 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 trap. KYC will be necessary once NHAI incorporates the toll roads owned by state governments under this scheme and allows the use of FASTag to pay for parking and other similar charges. In such cases, it will be a semi-open circuit payment system, the official said.