FASTag violates RBI rules, contends petition by advocate at Madras HC

The petitioner, Kabilan Manoharan, an advocate practicing at the High Court, submitted that he had purchased the now-mandatory Radio Frequency Identification (RFID) fitted transponder from AirTel Payments Bank for enabling electronic toll collection called FASTag. But his account was debited Rs 55 at Nemili toll plaza near Sriperumbudur despite his FASTag ID and FASTag affixed Car being 40 Km away from the toll plaza at the time specified for toll payment.

He added that as per the present FASTag design, the RFID is bought using Know-your-Customer (KYC) documents and associated with the user through an additional factor of authentication (AFA) like one-time password by SMS or MPIN on screen or PIN at point of sale (POS). Thereafter, it is electronically associated with the vehicle registration number and mapped to the user’s bank account or e-wallet account.

However, various RBI notifications issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act, 2007, mandate that users have the option to choose having an AFA even for recurring transactions with a e-mandate on prepaid payment instruments (PPI) like FASTag, contended the petitioner.

But FASTag doesn’t give users the option to have AFA mandated under the RBI regulations and is in violation of Section 20 of Payment and Settlement Systems Act, 2007. Hence, such arbitrary exercise of power from Rule 6(3) has a direct consequence on the safety and security of users’ bank accounts, cards, e-wallet accounts and integrity of transactions, the petitioner said. The plea is poised to be taken up for hearing soon.