Hypothecation process for vehicles to go online from November

Hypothecation process for vehicles to go online from November

In a relief to Delhiites buying vehicles through bank loans, no physical documents will be needed for the hypothecation process from November, according to a Delhi government statement

Under a hypothecation process, the bank takes the purchased vehicle as a collateral against the loan given to a buyer. After the loan is repaid, the vehicle ownership is restored to the buyer through the process involving the bank and Transport department.

“In order to make the entire process of vehicle hypothecation convenient and hassle free, I had a fruitful meeting today with leading banks and NBFCs wherein It has been decided that from 01.11.2021, the entire process will be ‘FACELESS’ by using OTP based digital signature,” Delhi Transport minister Kailash Gahlot said in a tweet on Wednesday.

Hypothecation services (HPT) that include addition, continuation and termination of hypothecation on vehicle loans are one of the most availed services of the Transport department.

Since the launch of faceless (online services with no human interface) services last month, the department has so far received 7,111 applications for HPT.

Earlier, an applicant after foreclosure of a loan had to apply for termination of hypothecation and submit Form 35 and NOC from the bank for termination within 90 days, the statement said.

The Transport department had already partnered with ICICI bank to allow automatic termination since the launch of faceless services and have received data of over 7,800 applicants who have loans on vehicles, it said.

From the beginning of November, any applicant who has availed vehicle loans from any financial institution will not need to visit the bank and physically submit any document.

Once the loans are added or paid off, the data will be directly transferred by the bank to the VAHAN database, which will enable the department to verify and approve the HPT service, it said.

(Cover: Getty images)

 

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