ARTICLE: RTO Hypothecation Removal Process - Step by Step Guide

[Technocrat]

Here is a step by step guide on getting the "Finance Company Hypothecation" removed from your RC book, once the loan period is over.

Typically one would start hunting for an agent to get the Hypothecation removed. Now, I am a 'No agent' guy (got both, my Driving License & Passport without an agent) and refrain from taking services of agents, unless the procedure is very difficult to complete on my own (e.g. booking Rail tickets via the Tatkal scheme). Since my car is Pune registered, the steps and references are applicable for the Pune RTO (MH-12 jurisdiction). Note that procedures are more or less the same for other RTOs too.

STEP ONE: Documents from the Bank / Finance Company

Your bank or Financial institution would give you the following documents after Loan closure:

• Bank Letter stating Closure of Loan : Standard format on their letterhead.

• No Objection Certificate : 2 or 3 copies of the NOC (1 each for the car owner and the RTO). Some finance companies may give an extra copy for the Insurance company's records.

• 2 copies of Form 35 : This may or may not be the case & would vary as per your state and / or RTO guidelines.

• Note that the bank NOC is generally valid only for 3 months. You must submit your application to the RTO, before the NOC's expiration.

Once you are in receipt of these documents, it is recommended to get some extra copies made for your records.

UPDATE

Originally Posted by moralfibre

Techno, I forgot to mention. I did get the hypothecation removed on my car's RC book. Having a car loan with SBI complicated things. Additionally there is a new rule from the RTO that a "Trade Certificate" is required from the bank to get the hypothecation removed. You might want to add it to the procedure. I have a copy of that certificate and will post a scan once I get back home.

[Technocrat]

The Agents

The moment you enter the RTO, inevitably, a bunch of agents will rush to you & offer their services. Upon hearing the purpose of my visit, one agent commented "ho jayega sir" (i.e. "will be done"). According to him:

• Since I don't have a smart card RC, I'd have to apply for one before I get the hypothecation removed. For this, he needed my vehicle number, on the basis of which he will retrieve all the relevant details & file for the new smart card RC.
  
• I would then need to apply for the removal of hypothecation, with all of the documents listed in "Step TWO" (next post).

He quoted between Rs. 800 - 1,000 as his "service charges". I thanked him, asked him to give me his number & told him that I will call him if interested. This was just so that he stops bothering me .

[Technocrat]

STEP TWO: Submitting your application

UPDATE

Now, payment can be made online as well.

Visit https://parivahan.gov.in --> Online Services --> Vehicle Related Services --> Enter your vehicle number --> Choose your service --> Misc.

Once you enter the building, you'll see a lot of counters with clearly marked numbers on them. I roamed around a bit & then started asking questions to people there on what needs to be done. Luckily for me, there was this gentleman who willingly explained the rather straight-forward procedure.

You need the following documents to complete your application:

• No Objection Certificate (RTO copy)
• Form 35 (Both the copies, duly signed by yourself)
• Registration certificate - Original
• Driving License - Copy only
• Insurance policy - Copy only
• PUC - Copy only
• Owner's Aadhaar card - Copy only
• Owner's photograph
• Print of payment receipt (if paid online)

Staple all the papers up together. Then, carry out the following steps to get the hypothecation removed from your RC book:

a) : Get all the documents checked by an officer. Ask around to know who the verification officer is (easy to find).

b) : Get these details entered into the RTO computer system (e.g. counter #31 at the Pune RTO). Then, walk over to the counter in charge of your number series (A, H, AB, CY etc. are clearly marked). Hand your papers to the concerned officer (at that counter) and ask him to approve your details (that have just been entered into the system).

c) : Go to the payment counter and pay the Rs. 100 fee (counter #19 at the Pune RTO).

d) : Go back to the officer in "step b" (who approved your details in the computer system). The officer will collect all your documents & give you a date on which you should come in next. This period is essentially used to verify all of the attached documents & get them approved by the concerned officer.

e) : On that specified date, you will have to revisit the RTO and meet the same officer (from "step b"). He will hand over your documents along with an "Acceptance Form", which essentially contains all the details mentioned on the RC. It is given to you so that you can make any corrections (if needed). In my case, I found that my surname was spelled incorrectly. I corrected the same with a pen, signed on the same spot & handed it back to him. He then made these changes into the RTO computer system.

f) : I was sent, along with all the documents, to counter 14 / 15 (whichever is open) to pay Rs. 350 (fees for the Smart Card RC). You will get a receipt & be asked to collect the Smart Card RC after 4 days (or in the ballpark).

g) - Go to the RTO on the date given, and collect your new RC Smart Card (sans hypothecation) .

[Technocrat]

All in all, you need to make 3 visits to the RTO.

1st Visit : 4 steps

2nd Visit : 2 steps

3rd Visit : Collect the updated RC Smart Card.

Total Cost - Rs 450

[Technocrat]

Additional pointers

• Agents can get pretty pushy in peddling their services. As I've illustrated above, it's easy to get the job done yourself. If, on the other hand, you are pressed for time, hiring a reliable agent is probably the way to go.
  
• Have all your documents ready & be polite to all the RTO officers & clerks.
  
• When you go to collect your RC, there is a computer inquiry section. It's here that you will get updates on your RC. In my case, they had sent the RC within only 2 days of paying the fees.
  
• This is for those who would be visiting an RTO other than Pune. Make an effort to find out the entire procedure on your first visit itself. This way, you won't spend too much time at the RTO. I had to spend a total of 75 minutes only (both visits together) to get the work done.

[hvkumar]

Thanks, that was a very comprehensive guide to this process.

I'm about to do the hypothecation removal process, my loan just got over.

BTW, Kotak, who is my bank, has issued a NOC valid for only 60 days, I guess this varies from bank to bank (you have mentioned 90 days).

I do not want a smart card RC, would prefer to continue with the conventional paper book. I'm trying for that. I prefer to use an agent because I find the RTO office procedures too cumbersome and also tha, I will have to take a whole day off (since I work in A, RTO is in B).

[prince_pervez]

Beautiful article.
I am saving this for later. I could literally visualize the counters and the locations. Thanks for sharing @Techno!

[ElantraGT]

Technocrat this is a valuable information for me. I need to get my Hypothication cancelled in my car and bike. Hopefully by next week I will be making a visit to the RTO in chennai.

[moralfibre]

Couldn't have come at a better time Techno. I am going tomorrow / Monday to get this done and yes, I hate agents too. In fact this is a good start to wipe them off.

[kites]

Recently when I tried in bangalore, they insisted on a emission test certificate along with the documents which you have mentioned

[Technocrat]

@HVK- Thanks I have now added the difference in validity in my post.

Thanks Pervez & ElantraGT, I am glad that you liked it.

@Kiran - Buzz me if you get stuck or need any help.

[idea1979]

Very Informative indeed.

Hoewever, due to these hassles of Hypothecation Removal, i try to stay away from car loan.

You can also club this process at time of reselling of car wherein Hypothecation Removal and transfer of vehicle can be done at sametime. Not to mention, fresh NOC is must.

[sukiwa]

Originally Posted by Technocrat

Step 1 - Get all the documents Checked by an officer. (You may have to ask around to find out who this would be but don't worry you would find out soon)

Step 2 - Get these details entered on PC. (Counter # 31 in Pune RTO)

Step 3 - Get these details entered in system Approved by an Officer who looks into your number series (A, H, AB, CY etc )

Step 4 - Go to the payment Counter. (Counter # 19 in Pune RTO)

Step 5 - Go back to the office in Step 3, he will take all your documents & will give you a date on which you will need to come to get the updated RC.

This period is essentially used to verify all the attached documents & get them approved by the competent officer. One will see an extra slip with various check marks attached to the documents in Step 6.

Step 6 - You have to go & meet the same person who had called you, He will give you your documents along with an "Acceptance Form" this essentially contains all the details mentioned on RC & it is given to you so that you can make corrections if any are needed. In my case I found the spelling of my surname to be wrong.

So I corrected it with a Pen & signed it & gave it to him, he then made these changes into the system.

Step 7 - After the last step I was sent, along with all the documents, to counter 14/15(whichever is open) to Pay Rs 350 which is the fees for getting a Smart Card RC. Once you pay, you will get a receipt & will be asked to collect the Smart Card RC after 4 days or so.

Step 8 - Go to RTO Collect the New RC

Did this process few months back, few additions.

Step 1 to Step 4 can be done in first visit, one needs to pay Rs. 100 in step 4 currently in pune RTO.
Step 5 to 7 will be part of second visit & actual collection of Smart card RC in third visit.

Specific to pune RTO:

• Officers that one needs to meet in Step 1 & 3 are behind counter # 31/32 separated by line of cupboards. One needs to use right passage towards entrance of office to reach these officers.
• Photocopies may need to be attested/notorised. This was required at least till Sept '09 when I did it, paid Rs. 50 to notary. Notaries are usually seen near/behind canteen in RTO.

I had left interval of one week each between these three visits. I paid only Rs. 450 as against Rs. 1000 asked by an agent. And, surprisingly for the first time, no mistake in name/number from govt. office.

And, please visit RTO office in mornings, it helps.

[Technocrat]

Thanks idea1979

@Sukiva - Thanks, I had forgotten to mention Rs 100 in step4 & i have also added number of visits for each step in my post..

Photocopies are not required to be attested/notarised. Mine were not, also another person from my office got this done after I did it & he didnt get the copies notarized either.

How did you pay for notarization as that too will add to the total cost.

[1-Testosterone]

A very informative yet practical post indeed!
Corruption index here in Punjab is very high. When I sold off my Indica, entire RTO Hypothecation Removal Process took about 1 month. On the other hand, I got the new RC of my vehicle after 4 months