Nagpur RTO stops registering 'vehicles'

The Nagpur Regional Transport Office (RTO) has stopped registering vehicles financed by non-banking finance companies (NBFCs), which do not have the mandatory trade certificates.

The RTO refused to register about 400 vehicles that were purchased under hire-purchase agreements (HPA) during the last two day. However, all vehicles purchased on cash payment were registered.

On January 5, 2007, the Maharashtra transport commissioner had issued a circular making it compulsory for all vehicle financing firms to get a trade certificate from the transport department.

Nagpur regional transport officer Digambar Haste issued an order on January 29 stating that after February 20, any vehicle financed by a company not having a trade certificate, will not be registered.

For getting a trade certificate, the firm needs to be registered with the Reserve Bank of India. As per the RBI Act, the company has to have a minimum net owned fund of Rs 2 crore, which is a major hurdle for most NBFCs. Some 50-odd NBFCs had applied to the Nagpur RTO for obtaining a trade certificate, officials said.

Nikhil Kusumgar of N K Kusumgar and Company, also the former president of the local Hire-Purchase Association, said trade certificate was not being issued by RTO because of lack of manpower. The automobile agencies and financiers have not received any reply to the applications they had submitted along with required application fee eight days ago. "We and the buyers are unnecessarily being harassed," Kusumgar said.

If this continues, the Association would have no other option but to approach the court, Kusumgar added. Trade certificate issuance fee is to be paid when the trade certificate is ready for delivery, the automobile dealer said.

But for this, the place of operation of the applicant has to be surveyed. This process alone could take up to two months. He questioned the ban on registering vehicles by the RTO in this period.

Interestingly, the transport department's restriction appears to be only for Nagpur. In other places such as Nashik and Mumbai, authorities are accepting registrations.

Kusumgar said it was not a case of only few people being affected. Finance agencies too have been affected. "As a financier, if I want to finance any second-hand vehicle, I will not be able to do so," he said.