How to Remove Loan Hypothecation (Form 35 & Bank Merger Guide) in 2026

Published by Adv. Rajesh Verma on 27 September 2026

1. Standard Form 35 HP Termination Process

When your vehicle loan is fully repaid:

1. Bank issues Two copies of Form 35 (Notice of Termination of an Agreement of Hire-Purchase/Lease/Hypothecation) signed by the authorized bank manager with official seal.

2. Bank issues an official No Objection Certificate (NOC) addressed to the Registering Authority.

3. Submit application online on Vahan Parivahan under "Hypothecation Termination".

4. Upload Form 35 and NOC. Pay ₹100 fee online.

2. Solving Bank Merger / Amalgamation Rejections

If your original loan was with a bank that has merged (e.g. *Syndicate Bank $\to$ Canara Bank*, *Allahabad Bank $\to$ Indian Bank*, *OBC/United Bank $\to$ PNB*, *HDFC Ltd $\to$ HDFC Bank*):

  • The Problem: RTO Vahan portal lists the old bank code, but your NOC has the new bank letterhead.
  • The Solution: Request the bank branch manager to attach the Gazette Amalgamation Notification Letter along with Form 35. RTO officers cross-verify the RBI notification and override the bank code in Vahan.

    • 3. The 90-Day Bank NOC Expiry Trap

    Never delay submitting Form 35 after loan payoff. If the 90-day window expires:

  • You will have to visit the bank branch again for a re-validated NOC.
  • Some banks charge an administrative re-issuance fee of ₹500–₹1,000.

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    Frequently Asked Questions

    How long is a Bank Loan Closure NOC valid for RTO Form 35 submission?

    Bank NOCs are typically valid for exactly 90 days (3 months) from the date of issue. If submitted after 90 days, RTO systems flag it as expired and require a fresh bank NOC.

    What is the government fee for removing hypothecation from an RC?

    The statutory fee for HP cancellation under Rule 81 is ₹100 plus smart card and postal charges (Total: ~₹450).

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