Scheme for Purchase of 4 Wheeler for Own Use

What is the PIPDIC Scheme for Purchase of 4 Wheeler for Own Use?

Scheme for Purchase of 4 Wheeler for Own Use is one of the specific schemes of the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC), the Government of Puducherry undertaking set up in 1974 to promote the union territory's industrial development and to provide financial assistance to entrepreneurs.

It is an unusual product in PIPDIC's range, because almost everything else the corporation does is project finance. This one finances a vehicle for the borrower's own use. Its logic is relationship-based: PIPDIC extends the facility to two groups it already deals with; qualified professionals, whose practices it also finances under a separate scheme, and its existing good borrowers among industrial units, whose repayment record it can verify from its own books.

According to PIPDIC's published schemes of assistance:

• Eligible borrowers: qualified personnel in medicine, management, accountancy, engineering, architecture, etc., and good borrowers of the Corporation (industrial units).
• Purpose: for purchase of a new four wheeler vehicle (air conditioned or non-air-conditioned) for own use.
• Loan limit: up to 75 per cent of the cost of the vehicle.
• Interest concession: 1 per cent for good borrowers of 'A' category and 0.5 per cent for 'B' category.

Note that "for own use" is part of the scheme's name and its purpose. This is not a commercial vehicle loan. PIPDIC finances commercial road transport separately under its Scheme for Small Road Transport Operators, which lends 70 per cent of the cost of the vehicle to residents of Puducherry for chassis and bodybuilding, and which states expressly that second hand vehicles are not eligible for assistance.

Who is eligible for the four wheeler loan?

You can apply if you fall into one of the two named groups.

Group one, qualified professionals. PIPDIC names medicine, management, accountancy, engineering and architecture, followed by "etc.", which leaves room for comparable qualified professions. The applicant should hold the professional qualification and, where the profession requires it, registration with the relevant council or institute. PIPDIC's parallel Scheme for Professionals, which finances setting up a professional practice or consultancy venture, with project cost not to exceed Rs 20 lakh: uses the same description of eligible persons, so a professional financed there is squarely within this scheme too.

Group two; good borrowers of the Corporation (industrial units). These are PIPDIC's existing assisted units classified as good borrowers:

• 'A' category: existing assisted units in operation for more than 3 years and regular in repayment without availing reschedulement. These get the 1 per cent concession.
• 'B' category, units that obtained reschedulement not more than once and were regular after it, and units assisted by other institutions or banks satisfying the criteria with unencumbered fixed assets. These get the 0.5 per cent concession.

Alongside category, the practical requirements are:

• The vehicle is new and is a four wheeler, air-conditioned or not.
• You can bring at least 25 per cent of the vehicle's cost, since the loan covers up to 75 per cent.
• You can demonstrate repayment capacity from professional income or from the unit's operations.
• You are not in default to PIPDIC, another institution or a bank.

You cannot apply, or are not eligible, if:

• You are a general salaried employee with no professional qualification in the named disciplines and no PIPDIC borrowing relationship. This is the single most common misunderstanding about the scheme, it is not a general car loan available to any resident of Puducherry.
• You want a second-hand vehicle. The purpose is expressly the purchase of a new four wheeler.
• You want a two wheeler or a commercial vehicle. Commercial road transport belongs under the Small Road Transport Operators scheme at 70 per cent of vehicle cost.
• You want the vehicle for hire or commercial operation rather than own use.
• You cannot fund the 25 per cent margin.
• You are an existing defaulter. Default disqualifies across PIPDIC's schemes, and it also destroys the good borrower classification that carries the interest concession.
• You are a new PIPDIC borrower with no professional qualification. A unit becomes a good borrower only after more than three years of regular repayment; there is no shortcut into that status.

How much is financed, and what is the concession worth?

The loan is up to 75 per cent of the cost of the vehicle. The applicant funds the balance.

The interest concession is the scheme's distinguishing benefit, and it is tied to good borrower classification rather than to the vehicle:

• 'A' category good borrowers: 1 per cent below the applicable rate
• 'B' category good borrowers: 0.5 per cent below the applicable rate

For an industrial unit that has repaid PIPDIC punctually for years, that full percentage point is a direct return on repayment discipline, and it is the same concession the unit would receive on a term loan of Rs 5 lakh to Rs 150 lakh under the Scheme of Assistance to Good Borrowers. A unit that takes even one reschedulement drops to 'B' and halves the concession — which is worth remembering before requesting a rescheduling on an unrelated loan.

PIPDIC's published terms for this scheme do not state a fixed maximum rupee amount or a fixed repayment period; both follow from the vehicle cost and the appraisal. Confirm the tenure and the applied rate in the sanction letter.

What documents are required?

How to apply for the four wheeler loan

1. Establish which group you fall into. Professionals should have the qualification certificate and council registration ready. Industrial units should first confirm their good borrower classification, because that determines whether the concession is 1 per cent or 0.5 per cent.
2. Obtain a proforma invoice from the dealer for the specific new four wheeler, air-conditioned or non-air-conditioned, showing the cost on which 75 per cent will be calculated.
3. Arrange the 25 per cent margin and be able to evidence it from bank statements or committed funds.
4. Assemble income proof; income tax returns, and practice accounts for a professional in independent practice or the unit's audited accounts for an industrial borrower.
5. Register as a customer on pipdic.in and open the Loan Applications section, choosing the up-to-Rs-25-lakh or above-Rs-25-lakh form according to the amount sought.
6. Complete the application and upload the documents: qualification or good borrower proof, proforma invoice, income proof, margin evidence, KYC including driving licence, and bank statements.
7. Submit and note the reference, or file physically at the PIPDIC registered office, 60 Romain Rolland Street, Puducherry 605 001.
8. Check the concession in the sanction letter. Confirm that the 1 per cent 'A' category or 0.5 per cent 'B' category concession has actually been applied to the rate, and raise any discrepancy before executing the documents.
9. Complete documentation and let PIPDIC disburse to the dealer, then ensure the vehicle is registered with PIPDIC's charge noted as required, and set up the repayment mandate.

Applicants outside Puducherry city can use PIPDIC's regional offices: Karaikal on 04368-292317, Thattanchavady on 0413-2271206, an office on 0413-2678105, Mahe on 0490-2332560 and 2332720, and Yanam on 08863-2321243.

How do I check my application status?

1. Log in to your customer account on pipdic.in, from which the application was filed.
2. Call the PIPDIC registered office on 0413-2335116 or email info@pipdic.com with your application reference.
3. Use the enquiry form on pipdic.in for pre-sanction questions and the separate grievance form for complaints.
4. Ask your existing loan officer if you are already a PIPDIC borrower, for a good borrower application, that officer holds the record that classifies you.

Why applications get rejected, and how to fix them

• Applying without falling into either eligible group. The commonest reason. Confirm you are a qualified professional in the named disciplines or an existing PIPDIC good borrower before applying; a general salaried applicant should approach a bank instead.
• Seeking finance for a used vehicle. The scheme covers a new four wheeler only. There is no discretion on this.
• Claiming 'A' category when the record shows a reschedulement. Check your loan history first. One reschedulement with regular repayment afterwards places the unit in 'B' at half the concession.
• Margin not arranged. Twenty-five per cent of the vehicle cost must come from you. Show it.
• Repayment capacity not evidenced. File the income tax returns and practice or unit accounts. A vehicle loan is still appraised on ability to pay.
• Proforma invoice missing or generic. Get a dealer invoice for the specific model and variant, showing the actual cost.
• Existing default. Clear it before applying; default disqualifies and also costs the concession.
• Commercial use intended. If the vehicle will be run for hire, apply under the Small Road Transport Operators scheme, which finances 70 per cent of vehicle cost, rather than this one.

What are the key dates?

PIPDIC accepts loan applications on a rolling basis and publishes no last date for this scheme. PIPDIC and the Government of Puducherry both operate a financial year from 1 April to 31 March, when interest rates and scheme parameters are ordinarily reviewed.

Two dates matter to an applicant. The first is the validity of the dealer's proforma invoice, since vehicle prices change and a stale quotation forces a re-appraisal. The second, for industrial borrowers, is the date of the last instalment on the existing PIPDIC loan; because good borrower classification, and therefore the interest concession, is assessed on the repayment record as it stands when the fresh application is considered.

How do I raise a grievance?

1. Use the grievance form on pipdic.in, which is maintained separately from the general enquiry form.
2. Contact the PIPDIC registered office, 60 Romain Rolland Street, Puducherry 605 001, on 0413-2335116, fax 0413-2336842, or email info@pipdic.com.
3. Escalate to the Director of Industries and Commerce, Industrial Estate, Thattanchavady, Puducherry 605 009, on +91-413-2248476, +91-413-2248168 or +91-413-2248320.
4. The departmental head is the Secretary to Government (Industries and Commerce), Chief Secretariat, Puducherry 605 001, on +91-413-2336115.

A dispute over good borrower category is worth pursuing in writing, because it is worth half a percentage point of interest across the loan and rests on facts, instalment dates and whether a reschedulement was granted, that PIPDIC can verify from its own records.

PIPDIC charges its published processing and service charges only. No dealer, agent or intermediary is authorised to collect money on a promise of arranging a PIPDIC sanction.