Home / Business and Economy / Car Loan Paid? RTO Visit Now Optional
Car Loan Paid? RTO Visit Now Optional
4 Mar
Summary
- Online system automates hypothecation removal post-loan repayment.
- New process eliminates need for multiple transport office visits.
- Launched March 1, integrates with one nationalized bank and five NBFCs.
The Ministry of Road Transport and Highways introduced a streamlined online system on March 1, automating the removal of hypothecation from vehicle registration certificates after loan repayment. This significant reform eliminates the need for vehicle owners to visit transport offices multiple times and follow up with banks, thereby easing the post-loan clearance process.
The new framework leverages the Reserve Bank of India's Unified Lending Interface (ULI) for secure, real-time data exchange between lenders and government platforms like Vahan. This integration ensures verification and updates occur without human intervention, with owners receiving SMS notifications upon completion.
Currently, the system is operational with the State Bank of India and five NBFCs, including Cholamandalam, Shriram Finance, and Sundaram Finance. Authorities plan to onboard more financial institutions in phases to ensure widespread coverage and enhance transparency.
This initiative is part of a broader government effort to improve the ease of living for citizens. Experts commend the move for addressing the gap where borrowers previously had to manage hypothecation removal formalities themselves after loan closure.
