Page 33 - Banking Finance February 2021

ARTICLE

INTRODUCTION TO

CERSAI WITH

RECENT CHANGES

LEADING UP TO

CERSAI 2.0

G overnment of India established the 'Central Before CERSAI, information on the encumbrance on a

Registry of Securitisation Asset Reconstruction
property was known only to the borrower and the lender;
and Security Interest of India (CERSAI), to
due to fragmented registration system. CERSAI's initial
operate/ maintain 'Central Registry' functions as
per SARFAESI Act 2002. CERSAI is a central online security mandate was to maintain a central registry of 'Equitable
Mortgages', where it contains information on the equitable
interest registry of India, more than a statutory obligation mortgage taken on a property along with details of the
is a risk mitigation tool for the Banks, Housing Finance financial institution that has extended the loan as well as
Companies, Financial institutions, and public at large to details about the borrower. Need felt of having 'Central
prevent multiple financing against the same property. Registry' is because often we came to know about multiple
CERSAI has brought different modification/ changes since its lending on same property as "Equitable Mortgage" is
inception in order to serve better; latest modification is in basically a transaction between two parties Bank and the
form of migration to CERSAI 2.0 with effect from 03rd proposed borrower, taking place at the Bank creating EM.
August, 2020. In this article we will discuss the background
and important changes it introduced up to latest Since EM is basically drawing a memorandum of deposit of
modification in form of CERSAI 2.0. title deed. Thus the information about this transaction was
not available to public. No reliable platform was there;
where one can access the information about the property
About the author in question. As a result, people could obtain multiple loans

Sailesh Kumar on the same property. Some people used to take one loan
from one bank, which would hold the deed papers. Then they
Chief Manager (Faculty)
used to take several more loans from other banks using
Staff Training Centre attested copies of the deed, by claiming that they had lost
Union Bank of India, Lucknow the originals. Some people also used to obtain loans using

BANKING FINANCE | FEBRUARY | 2021 | 33