What changed
Government established the Central Registry under SARFAESI Act, operational from March 31, 2011, to record security interests on immovable properties. CERSAI, a Section 25 company, will operate this registry. Initially, securitization/reconstruction transactions and mortgages by deposit of title deeds must be registered.
What it means for you
RRBs must now file particulars of any charge creating security interest with CERSAI within 30 days. This will help detect and prevent frauds where the same property is used as collateral for multiple loans or sold without disclosing existing charges. Lenders can search the registry before sanctioning loans.
What you must do
- Register all new mortgages and securitization transactions with CERSAI within 30 days of creation.
- Update internal loan origination processes to include CERSAI search before sanctioning any loan against immovable property.
- Train staff on the new filing requirements under Section 23 of SARFAESI Act.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
All Regional Rural Banks (RRBs), Banks and financial institutions granting loans against immovable property, Borrowers and property buyers
What is the purpose of CERSAI?
CERSAI is a central electronic registry to record security interests on immovable properties, aimed at preventing frauds like multiple lending on the same property or fraudulent sales without disclosing existing charges.
What transactions must be registered initially?
Initially, transactions related to securitization and reconstruction of financial assets, and mortgages by deposit of title deeds to secure loans from banks and financial institutions must be registered.
What is the deadline for registration?
Under Section 23 of the SARFAESI Act, particulars of any charge creating security interest must be filed with the Registry within 30 days from the date of creation.