In relief to car owners, hypothecation removal now to be fully online
Dipak.Dash@timesofindia.com 04.03.2026
New Delhi : In a major relief, the removal of hypothecation from vehicles will now happen automatically through an online system once a loan is repaid, saving people from the hassle of multiple visits to transport offices and reaching out to banks.
The road transport ministry has rolled out this new system, starting March 1 (Monday), initially with one nationalised bank and five non-banking financial companies (NBFCs). Officials said the system operated using RBI’s Unified Lending Interface (ULI), which enables secure and realtime data exchange between lenders and govt platforms.
“The online interface interacts among banks, ULI and the Vahan system. So, the entire process, including the verification, happens without any human intervention. Once the process is complete, the owner gets an SMS from Vahan informing him/ her about the removal of hypothecation,” said an official. After the owner repays the loan, the bank will send a ‘no objection certificate’. At present, SBI and five NBFCs, including Cholamandalam, Shriram Finance and Sundaram Finance, have started implementing this system. Officials said more banks and financial institutions will be onboarded in phases.
