All about CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India)

What does CERSAI mean? This is a question that people going for property registration may wonder. The government, in 2011, set up a central registry to track online data pertaining to lending transactions against equitable mortgages in India, with an aim to curb the rising number of property-related frauds. CERSAI is a government-owned company that operates this central registry that deals with the filing of security interest of immovable, movable and intangible properties and assignment of receivables, among others, by financial institutions.

(In an equitable mortgage, a customer borrows funds from banks with an agreement that his property, on which the equitable mortgage is created, will act as security for the loan.)

What is CERSAI full form

With this, the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) was established, under Section 20 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It is licensed under Section 25 of the Companies Act, 1956.

While the central government, so far, holds a majority stake in the entity, the CERSAI, in March 2021, said that the Reserve Bank of India (RBI) may pick up the government’s 51% stake in the central registry, since all its functions are related to banking activities.

The remaining 49% stake in the CERSAI is held by state-run lenders, including State Bank of India, Punjab National Bank and Bank of Baroda, along with the National Housing Bank.

Key functions of the CERSAI

Essentially, all of CERSAI’s functions and activities are related to banks, housing finance companies (HFCs) and non-banking finance companies (NBFCs). The central registry, among other things, deals with the filing of security interest of immovable, movable and intangible properties by lenders. Simply put, the CERSAI login is an online database of all the properties mortgaged with banks in India.

From 2016, the CERSAI also operates and maintains a Central KYC Record Registry (CKYCRR) with an aim to serve reporting entities of the RBI, the SEBI, the IRDAI and the PFRDA.

What is CERSAI search?

As far as the real estate sector goes, any bank or lender dealing with property transactions can access the records maintained by the CERSAI, to detect potential frauds, where an owner may have borrowed from multiple sources using the same property as security.

See also: What is the importance of CIBIL score in getting a home loan?

How is the CERSAI database updated?

Any time a bank provides a loan to anyone against a property pledged as security, it is liable to submit the details of the transaction to the CERSAI database, through a process known as the ‘registration of charges’. The purpose of the registration of charges is to act as a public database about encumbrances on properties.

It is mandatory for all banks to provide this information to the CERSAI, within 30 days of the transaction taking place. In case they fail to provide the details of mortgaged properties within this time frame, banks are penalised in the form of monetary penalties.

CERSAI registration fee

The CERSAI imposes a fee known as the fee for registration of security interest. The charge varies between Rs 50 and Rs 100, depending on the amount of loan that has been granted against the property.

CERSAI charges on home loan

When processing your request, the bank will have to pull out records from the CERSAI, to ensure that everything is right with the property title and that it has not been mortgaged with any other bank. For this, it will have to pay a fee to the central registry. Subsequently, it will ask the home loan borrower to pay the CERSAI fee.

This CERSAI charge on home loan is also referred to by the name ‘memorandum of deposit of the deed fee’ and must be paid, irrespective of whether the bank approves or rejects your home loan request at a later stage.

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