New Delhi: Banks have begun to put pressure on them to improve their margins in place of toll payments via FASTag. Banks have written to the National Highways Authority of India (NHAI) requesting that the FASTag Project Management Fee be raised (PMF).
The Indian Banks Association (IBA), in its recommendation sent to NHAI and the Ministry of Road Transport, has said that keeping in view the interests of banks, the old rate of PMF should be restored.
Banks used to get 1.5 percent PMF of the total amount for every toll payment. But, NHAI has reduced this amount to 1 percent from April 2022. The association said that the old rate of PMF should be implemented for at least two more years and it should be changed only after March 31, 2024.
Since the government made FASTag toll collection mandatory at all toll plazas in the country, there has been a significant increase in payment by this method. When a car goes through a toll plaza, banks pay the toll tax automatically using the FASTag.
Banks charge a fee for this service as well. Currently, FASTag accounts for 95 percent of all toll plaza payments. According to experts, if bank margins are increased again, the charge for utilizing FASTag will very certainly increase as well.
Banks have said in a suggestion issued through the IBA that they are facing massive losses as a result of the fall in interchange fees. With effect from April 1, the interchange charge was decreased from 1.5 percent to 1%, and NETC FASTag's business earnings have fallen by 31% since then.
According to Giridhar Armane, Secretary, Ministry of Road Transport, NPCI and banks are requesting an increase in PMF costs, and we are working with them to find a solution. A ruling on this issue is coming soon.
According to data supplied by the Ministry of Roads, toll collection increased significantly when FASTag became required. FASTag use has climbed from 16 percent in 2018 to 96 percent in 2019.
In 2018, the overall toll collection was 22 thousand crores, with FASTag accounting for 3,500 crores. The total toll collected in 2022 was Rs 34,500 crore, with FASTag accounting for more than Rs 33 thousand crores. The government is anticipated to attain 40 thousand crores of rupees soon.
