While chairing the signing of the MoU, union minister, Nitin Gadkari, said that the move would further the "convenience" enjoyed by tag users and would help in seamless traffic flow.
The automobile sector has gained a lot from the leaps in the road sector... I would urge all the state governments to implement it at their plazas and enable travelers to sail through e-tolls," he said.
National Highways Authority of India (NHAI) had started usage of FASTag to promote electronic toll collection (ETC) in order to digitise the traveling experience.
A FASTag is usually attached at the windscreen of a vehicle which electronically (through radio frequencies) note the time of a vehicle's entry and exit through toll plazas and automatically deducts amount from the vehicle owner's bank account.
The problem, however, with this system was that the vehicle owner had to open a new bank account with those banks who would sell the FASTag.
Now, with this MoU in place, government hopes to solve this problem by letting users use their own personal bank accounts.
"This is a bank-neutral FASTag which can be linked to customers' choice of bank accounts. This not only provides flexibility and convenience to the FASTag users, but is also user friendly," said a statement released by the ministry.
The ministry also launched two new mobile apps-- My FASTag Customer Care app and FASTag Point of Sale app.
While the former allows real-time recharge facility through Unified Payments Interface (UPI), the latter is a business-to-business (B2B) app to manage tag distribution partners.
The government also envisions to extrapolate FASTag Customer Care app as a mobile wallet service, even as the minister hopes to allow usage of FASTag for purchase of petrol in future.The government hopes to bring over 500 toll plazas under the ambit of ETC through the FASTag programme to ensure improved transparency in toll collection system, reduce revenue leakages and seamless toll payment mechanism.