Ever since the Union minister for road transport & highways, Nitin Gadkari, directed National Highway Authority of India (NHAI) to issue free of cost FASTags to people till 1 December 2019, the move has led to a lot of confusion among commuters over the payments.
This is because all banks, especially private banks, have been marketing FASTag connections to their depositors. They offer easy access and uploading of verification documents, but have been charging a fee. This has caused many buyers to feel cheated; who are venting their anger in emails and on social media.
A closeer look, however, reveals that banks are doing nothing wrong by charging, for the convenience that too as a deposit. Since the FASTag ensures an ongoing opportunity every time it gets used at a toll booth, some are also offering a carrot in the form of a cashback.
So here is the correct picture on FASTag issuance for those who do not know how to get one easily.
Mr Gadkari announced that FASTag will be available free of charge, this is only at all points of sale created by the NHAI. It will also be made available at other designated places with high potential of sales. "The ministry is submitting deposit money of Rs150 on behalf of the user for now. We are giving it for free to promote its use. We will see what happens on December 1,” the minister had said.
The current mechanism of FASTag allows one hybrid lane which can accept cash and cashless mode of transaction. NHAI has been directed to ensure the success of the mandatory FASTag project by deploying the best technology.
According to Mr Gadkari, the plan is to 'minimise waiting period' at toll booths; but, going by angry posts on social media, this is clearly work-in-progress and is a patch, at best. But that is another story.
When it comes to purchasing FASTags by vehicle-owners, the story is clear. If you want it free, then you need to approach NHAI’s designated booths at toll plazas. The process of verifying documents is, indeed, tedious and involves a waiting time; but this is a benefit to owner-driven commercial vehicles and a good move by the government.
Unfortunately, there are complaints that NHAI toll booths have stopped selling the FASTag after the minister’s announcement. So the minister proposes but NHAI disposes. Here are some complaints.
For those who do not want to queue up, most banks have offered a good and seamless process allowing documents to be uploaded easily, but there is a charge. We found that though rates are similar and most banks require a deposit and prescribe a minimum rechargeable threshold, there is no standardisation. This, in itself, is not bad.
FASTag issued by certified banks can charge maximum of Rs100 for each tag, which is fixed by National Payments Corporation of India (NPCI). However, the actual tag issuing charges are defined by the bank and may vary from bank to bank. Some banks are now offering a cashback against the FASTag issuance fee as an added incentive.
We found the following charges:
1. ICICI Bank
: ICICI Bank is selling FASTag for car at Rs499.12. The pricing includes- Rs99.12 for tag issuance fees; Rs200 as refundable security deposit; Rs200 for first recharge amount in wallet when the wallet is being created (*2.5% cashback on transacting with ICICI bank FASTag on the national highway, valid till 31 March 2020).
2. Axis Bank
: Axis Bank is waiving off the issuance fee for a limited period till 1 December 2019 but has a reissuance fee of Rs100 and a security deposit of Rs200.
3. HDFC Bank
: HDFC Bank is selling FASTag for car at Rs400; the price includes Rs100 for tag issuance fees; Rs200 as refundable security deposit; Rs100 for the first recharge amount in wallet when the wallet is being created (*2.5% cashback on transacting with ICICI Bank FASTag on the national highway, valid till 31 March 2020).
4. Kotak Bank:
No issuance fee till 1 December 2019; re-issuance fee Rs100; deposit Rs200; first recharge amount Rs200 (*2.5% cashback on transacting with ICICI bank FASTag on the national highway, valid till 31 March 2020).
6. Bank of Baroda
: Issuance fee: Rs100; deposit: Rs200; first recharge: Rs200 (*cashback of 2.5% for FY2019-20).
7. IndusInd Bank
: Joining fee of Rs100 is waived off till 31 December 2019; reissuance fee: Rs100 (including GST); refundable security deposit: Rs200; first recharge amount: Rs200.
The top-up charges may vary from bank to bank and this difference can be seen on respective banks' websites.
These charges may vary if one buys the FASTag online because the seller entity has also added cost of delivery which, by default, one needs to pay if one is buying products on Amazon or Flipkart. It is only fair that banks charge for the service.
How To Recharge the FASTag
If the FASTag is already linked with the bank account, then there is no need to load money separately in a prepaid wallet. One needs to ensure that the FASTag-linked bank account has sufficient balance to allow for toll payments. If the FASTag is linked to a prepaid wallet (NHAI prepaid wallet), then it can be recharged through various channels such as payment through cheque or through UPI or debit/ credit card or NEFT and netbanking
There is a cap on the maximum balance, which can be kept in the prepaid wallet.
As per regulations, these limits are:
For Limited KYC FASTag Account-holder: This type of FASTag cannot have more than Rs20,000 in their FASTag prepaid wallet. The monthly reload limit is also capped at Rs20,000.
For Full KYC FASTag Account-holder: This type of FASTag account cannot have more than Rs1 lakh in their FASTag prepaid wallet. There is no monthly reload cap in this account.
While this is on the positive side, NHAI may like to look into issues that have led to complaints, such as delivery of FASTag; mistakes in vehicle numbers, etc. These glitches, if true, will be a real sore point and will lead to accusations of poor implementation, like with MCA21 and the Goods and Services Tax (GST). The problems exist with banks as well as NHAI.
Veeresh Malik, auto expert and Moneylife columnist observed certain things in implementation of the FASTag. He met several car owners to know real life experiences of FASTag. According to him, the entire process of obtaining FASTag should be easy for users.
He says, "Ideally, take a soft copy of the RC, and issue the fast-tag. An RF tag nowadays is a disposable item, the version used by NHAI has a bulk cost of about eight cents or Rs5, but we are being charged Rs200 and upwards. That's the first rip-off - the tag is the same, why is it priced differently? The Delhi metro Smart Card, for example, has a cost to customer of Rs10. Next security charge, what for? Once the RF tag is stuck to the windscreen, it can not be returned, so what security charge?"
However, paying all charges is just one part of obtaining the FASTag, Mr Malik says, adding, "A transaction for an airline ticket or a railway ticket or a Delhi Metro smartcard is immediate, with 1000s and 1000s of variants going. The FASTag has only seven categories or vehicle classes, and it still takes multiple uploading of documents and then at least five working days to deliver."
The scariest user experience, according to Mr Malik, is with new cars that are pre-fitted with a FASTag. "Many of the new car owners with pre-fitted FASTag may have preferred to pay cash at toll booths because either the toll booths are not equipped or they have had double debits (or paid twice). The best of toll booths report 25% of vehicles (mostly commercial fleets) and 38% of revenue from smart cards after two years of adoption," he added.
Another scary issue is complaints that FASTag has deducted higher amounts, or deducted toll multiple times. See the twitter complaint below.
If this problem become widespread after 1st December, when FASTag is mandatory, it will lead to a public outcry and may force a roll back.
Further, the terms and conditions for FASTag are no available in the public domain by NHAI or NCPIL. This, he says, results in every issuer placing their own fine print - Paytm, for example, insists that the user has to start a Paytm account. "I have had past issues with Paytm and do not want to go near them," he added.
Remember, the system will be truly tested only after it becomes mandatory. And grievance redressal in India, especially by government bodies is notoriously poor.
Another major issues is complaint redressal. While banks have jumped on to the FASTag sales wagon with alacrity, they seem to be washing their hands off resolution and redressal as is evident from HDFC Bank’s response above.
Mr Malik, who once owned an IT company, says, "Today, the Delhi Metro does 6 million journeys per day, do you hear any complaints? IRCTC manages around 15 million per day and that also functions well or without much."
"I am all for electronic tolling, and revenue management, but the way FASTag is evangelising certain selective banks, and the way the fine print is rigged against the user, is something else again. Private car and single vehicle owners are going to be the worst impacted, " he added.
Finally, you have the usual problem with government agencies—pull a fast one when you can—so some booths are apparently still charging for the FASTag claiming free stickers are not available.
Mr Malik says, "The easier way for FASTags would have been to sell them off the counter at multiple locations, trust the customer to buy the correct class, and catch the crooks. Using this present method is presuming that all customers are crooks. And last but not the least - any product or service in India that says contact call centre has to be treated like a curate's egg".
Our advice to such users is to get informed and not be fooled into paying more.