What is CERSAI?
CERSAI stands for Central Registry of Securitisation Asset Reconstruction and Security Interest of India. It is a company licensed by the Government of India under Section 8 of the Companies Act, 2013.
The motivation behind its creation was to check and distinguish deceitful movement in loaning against impartial home loans. In straightforward terms, the organization was shaped to hinder the act of taking out a few advances from different banks utilizing a similar resource.
Its major shareholders are public sector banks, the National Housing Bank and the Central Government of India, which incidentally holds a 51% share in the company.
Preceding the setting up of CERSAI, insights in regards to a property’s encumbrance rested exclusively with the moneylender and the borrower. This was to a great extent because of an incoherent arrangement of enrollment that was set up at the time.
Because of this, people would take out a few credits on a similar resource or property from various banks. These credits were gotten utilizing fake title deeds or different questionable methods for replication of the first deed. Sadly to unsuspecting purchasers, these properties were then sold with unpaid credits still connected to them, in the long run landing them in somewhat of a soup because of the absence of data about a property’s current risk.
Main objectives of CERSAI
- To clamp down on such dubious and fraudulent activities, CERSAI was formed with the primary intention of maintaining a centralized registry of equitable mortgages.
This registry contains all relevant information on mortgages or loans that have been taken out on an asset or property. In addition, it also contains all relevant information on the bank or lender that sanctioned the loan on the property as well as information on the borrower.
- It allows banks and financial institutions to register any transactions in relation to asset reconstruction as well as securitization.
- In 2012, the scope of CERSAI was expanded to include the registration of any security interests that were created through the assignment of factoring or accounts receivables.
- In more recent times, CERSAI’s objectives were further extended to include registration of all kinds of mortgages prevalent in India, as well as registration of any security interests that are created on assets not deemed to be tangible, such as book debt for example.
As per directives issued by the government, all lenders (banks, financial institutions etc) are required to register any and all information with CERSAI with regards to security interests that they have been created. Registration must be completed within a period of 30 days of the creation of security interests.
Accessibility
Any individual, bank or financial institution can access the CERSAI registry platform online for a certain fee. By doing so, lenders can pull up information on a property to ensure that it has no previous security interest that may have been created by a different lender in the past. This is usually done before sanctioning a loan to a borrower.
Registration
Registration with CERSAI can be carried out on the official CERSAI website.
- The user will be required to fill out the online registration form, which is available under the ‘Entity Registration’ section on the site.
- In order to gain access to the CERSAI portal to fill in the relevant details, the user is required to have a digital signature.
- After all the required information has been filled in, the relevant forms are required to be printed and signed by the authorized signatory.
- These forms, along with the required documents mentioned in the forms, are to be sent to CERSAI’s address.
