When purchasing a vehicle through finance, the financier (bank or lending institution) retains a legal claim over the vehicle until the loan is fully repaid. This legal claim is called hypothecation and must be registered in RTO records under Form 34.

How Hypothecation is added:
At the time of new vehicle registration, the dealer submits RTO Form 34 along with the loan agreement documents. Form 34 is signed by both the owner of the vehicle and the financier representative. The RTO records the bank as the hypothecated owner, which appears on your RC card as 'Hypothecated to [Bank Name]'. This prevents you from selling the vehicle or changing its key registration details without the bank's NOC.