Central Registry of Securitisation Asset Reconstruction and Security Interest of India or CERSAI was created to control fraudulent activity in lending transactions against fair collaterals.
What is CERSAI?
CERSAI is known as the Central Registry of Securitisation Asset Reconstruction and Security Interest of India. CERSAI has been established as a company under section 8 of the Companies Act, 2013 out of which the central government holds a 51% share in the company.
CERSAI was created to identify and check fraudulent activity in lending transactions against equitable mortgages. They discourage and prevent the practice of taking out various loans from several banks using the same asset or property.
Before (CERSAI), a property’s encumbrance details rested solely with the borrower and the lender. As a result, persons would take out various loans from several banks using the same asset or property. At the end of the day, the potential buyers suffer due to the lack of information about the existing liability of the property/asset. These assets or properties were sold with unpaid loans still attached to them.
CERASI Registration Process:
- Registration with CERSAi could be started mostly on the verified CERSAI website.
- The individual seeking registration will be needed to sign out the application form accessible online on the CERSAi site underneath the Entity Registration option.
- The individual must have the Digital Signature Certificate to have access to the CERSAI portal and to fill out the necessary information.
- Now that all the details needed for registration have been entered, they must be printed and signed by the approved signatory.
- These written forms, together with all related documentation as specified in the type, must be submitted to the official address of CERSAI.
Any bank, financial institution, or individual can access the registration platform of CERSAI for a certain fee. After the lenders can pull up the information on an asset or property to validate that whether any previous security interest has been created by a different lender in the past. This will be done before the loan is approved.
What are the Objectives of CERSAI?
- The CERSAI was created with the primary aim of facilitating a consolidated register of fair mortgages.
- It requires financial institutions and banks to record all transactions related to the securitization and rehabilitation of assets.
- CERSAI was expanded to cover the registration of all security interests generated by the assignment of factoring or receivables.
- It covers the registry of any security interests generated on properties not deemed to be tangible assets and all forms of mortgages prevailing in India.
- The registration includes all relevant information about the lender that approved the loan on the asset or land, as well details on the borrower of the loan.
- The lenders are required to register with CERSAI with all details relating to security interests that have been generated on any asset or land.