Scheme for Small Road Transport Operators (SRTOs)

What is the Scheme for Small Road Transport Operators?

Scheme for Small Road Transport Operators (SRTOs) is a term loan scheme of the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC), a Government of Puducherry undertaking working under the Department of Industries and Commerce. The scheme finances the purchase of new transport vehicles, both goods carriers and passenger vehicles: by small operators who live in the Union Territory of Puducherry.

PIPDIC lists the scheme under its general schemes of assistance, alongside the scheme for the small and medium scale industrial sector and the scheme for cottage and village industries. The transport scheme exists because a single lorry, van, tempo or minibus is a small business in its own right, and a first vehicle is usually beyond what an operator can fund from savings.

The scheme covers the cost of the chassis and the cost of body building. That is an important detail for a goods operator in Puducherry, where the chassis is bought from a dealer and the body is fabricated separately by a local workshop. PIPDIC treats both as part of the financeable asset.

How much money does PIPDIC lend under the transport scheme?

PIPDIC finances up to 70 per cent of the cost of the vehicle. Road tax and insurance are outside the financed cost, so an operator must budget for those separately along with the 30 per cent margin.

The interest rate follows PIPDIC's published interest rate structure for term loans and working capital loans:

PIPDIC charges a concessional rate of 0.5 per cent below the normal rate for units promoted by women, Scheduled Caste, Scheduled Tribe or differently abled persons.

An investigation fee is charged on top: 0.50 per cent of the term loan applied for loans up to Rs 25 lakh, and 0.75 per cent for loans above Rs 25 lakh, plus applicable tax. SC and ST entrepreneurs get a 50 per cent concession on the investigation fee.

Who is eligible for the SRTO transport loan?

You can apply if:

• You are a resident of the Union Territory of Puducherry, including the Karaikal, Mahe and Yanam regions.
• You are buying a new goods vehicle or passenger vehicle; lorry, tempo, van, minibus or similar.
• You can meet the 30 per cent margin from your own resources, since PIPDIC finances only up to 70 per cent of the vehicle cost.
• You can offer immovable property as collateral security in line with PIPDIC's norms.
• You hold or can obtain the driving licence, permit and registration the vehicle needs to be put on the road legally.

You cannot apply if:

• You want to buy a second-hand vehicle. PIPDIC states plainly that second hand vehicles are not eligible under this scheme.
• You are not a resident of Puducherry, or the vehicle will be registered and operated entirely outside the Union Territory.
• You have no immovable property to offer as collateral and no guarantor who can offer property meeting PIPDIC's valuation norms.
• You are an existing PIPDIC defaulter. A borrower with a non-performing account is not eligible for fresh assistance while the default stands.
• You want a personal car. A car for personal use by a Puducherry government employee is covered by PIPDIC's separate Car Loan Scheme, and by the four wheeler scheme for professionals, not by the transport operators scheme.

What collateral security is required?

PIPDIC's published norms for accepting collateral security are:

• Property inside Puducherry, value not less than the amount of the term loan sanctioned.
• Property outside Puducherry, land with building: value not less than 150 per cent of the loan amount.
• Property outside Puducherry, land only, value not less than 200 per cent of the loan amount.
• For units promoted by women, Scheduled Caste, Scheduled Tribe or differently abled persons, the value of immovable property required is reduced to 50 per cent of the loan amount.

Valuation is done by a Chartered Engineer from PIPDIC's approved panel, not by a valuer of the borrower's choosing.

What documents are required?

How to apply for the Small Road Transport Operators scheme

1. Register as a new customer on pipdic.in. PIPDIC's portal has a New Customer registration and a Customer Login. Registration creates the account under which the application is filed and tracked.
2. Open the Transport Application under Loan Applications on the portal. PIPDIC keeps three separate loan forms: up to Rs 25 lakh, above Rs 25 lakh, and Transport, and a transport vehicle goes on the Transport Application.
3. Fill in the vehicle and operator details, the make and model of the chassis, the body building estimate, the total on-road cost, your margin contribution, and the route or goods operation you plan.
4. Upload the documents — identity and residence proof, quotations, and the particulars of the immovable property you are offering as collateral.
5. Pay the application fee of Rs 100 for a transport loan through the online payment mode at the end of the submission process.
6. Attend the appraisal. PIPDIC's officers verify the quotations, assess repayment capacity, and get the collateral property valued by a Chartered Engineer from the approved panel.
7. Complete documentation after sanction; original title deeds, antecedent title deeds, encumbrance certificate for 30 years, valuation certificate, FMB copy, patta and the legal opinion report. PIPDIC disburses only after this is done.

Applications can also be filed at the PIPDIC office at No. 60, Romain Rolland Street, Puducherry 605001 where online filing is not practical, but PIPDIC's own notice on Ease of Doing Business makes the online route the default.

How do I check my application status?

1. Log in to pipdic.in with the customer account used to file the application. PIPDIC's portal carries an application status view.
2. Quote the application number generated at submission when you contact the Corporation.
3. Call 0413-2334361 (Managing Director's office, PIPDIC Ltd.) or email info@pipdic.com for a position on an application under appraisal.
4. Use the Enquiry and Grievance forms on pipdic.in if there is no movement.

Common reasons transport loan applications are rejected

• The vehicle is second-hand. This is the single clearest disqualification in the scheme.
• Collateral falls short of the norm; property valued below the loan amount for a Puducherry property, or below 150 or 200 per cent for property outside the Union Territory.
• Title defects, a break in the chain of title over the 30-year encumbrance period, or a property standing in a deceased person's name without a legal heir declaratory decree from a Puducherry court or a legal heir certificate from the Tahsildar for a Tamil Nadu property.
• Margin not demonstrated. PIPDIC funds 70 per cent; an applicant who cannot show the remaining 30 per cent plus road tax and insurance will not clear appraisal.
• Existing default with PIPDIC, a bank or another financial institution.
• Quotations not original. PIPDIC asks for originals of supplier quotations to be produced.

Key dates

PIPDIC does not publish an annual application window for the transport scheme. Applications are accepted through the year on the online portal and processed as they are appraised. The interest rate structure and the investigation fee rates quoted here are PIPDIC's published norms; confirm the rate applicable on the date of sanction, because the rate charged is the one prevailing then.

Help and contact

• The Managing Director, PIPDIC Ltd., No. 60, Romain Rolland Street, Puducherry 605001 to phone 0413-2334361, email info@pipdic.com
• General Manager (Administration), PIPDIC Ltd.; mobile 9894653835
• Online applications and status; pipdic.in
• Scheme list; pipdic.in/pipdic_schemes
• Financial norms, interest and fees: pipdic.in/financial_norms
• Department of Industries and Commerce, Government of Puducherry: industry.py.gov.in