With the popularity of Game of Thrones at an all-time high, you would be forgiven for thinking that CERSAI was one of the characters plotting world domination. However, the reality is something a little more mundane.
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 purpose of its creation was to check and identify fraudulent activity in lending against equitable mortgages. In simple terms, the company was formed to deter the practice of taking out several loans from various banks using the same asset.
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.
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Prior to the setting up of CERSAI, details regarding a property’s encumbrance rested solely with the lender and the borrower. This was largely due to a disjointed system of registration that was in place at the time.
Due to this, individuals would take out several loans on the same asset or property from different banks. These loans were obtained using counterfeit title deeds or other dubious means of replication of the original deed. Unfortunately for unsuspecting buyers, these properties were then sold with unpaid loans still attached to them, eventually landing them in a bit of a soup due to the lack of information about a property’s existing liability.
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Main objectives of CERSAI
- To clamp down on such dubious and fraudulent activities, CERSAI was formed with the primary intention of maintaining a centralised 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 securitisation.
- 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.
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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.
This is extremely beneficial for potential home or property buyers, since it allows them to pull up records from the registry to check whether the property they are interested in purchasing is free of any liability or loan that may have been created by another lender.
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Registration with CERSAI can be carried out on the official CERSAI website.
- The user will be required to fill 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 authorised signatory.
- These forms, along with the required documents mentioned in the forms, are to be sent to CERSAI’s address.
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There you have it! Everything you need to know about CERSAI in a nutshell. And since you’re already here, take a gander at some of our fantastic Home Loan offers. You could find something that may interest you.