CERSAI & HOME BUYERS

CERSAI & HOME BUYERS

With the growth in Real Estate as an Industry, the number of Fly by night operators became unmanageable. The main sufferers became the Ignorant & Innocent common man- The Home Buyers. To prevent loaning with the same Asset Class as the Collateral, the Govt came up with one of the Internationally common practice of CERSAI.

What Is CERSAI, and why is it Relevant to a Home Buyer?

Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) is the Central Online Registry on the security interest. As brought out above, it aims at preventing frauds in lending against Equitable Mortgages, so that people don’t take multiple loans on the same asset from different banks. 

Legal problems are bound to happen when the same property gets linked to two loans from two different banks at the same time. It was quite common earlier, as there was no way to check whether a property has been mortgaged. To obviate these these issues, CERSAI was introduced to the real estate industry.

What is the Purpose of CERSAI?

CESAI was introduced in March 2011 to make mortgage transactions more transparent. CERSAI, is a licensed company, wherein, 51% of the equity is owned by the government, and the rest is owned equally by National Housing Bank and 10 other public sector banks.

CERSAI’s mandate was to maintain a Central Registry of  Equitable Mortgages. It contains data on the equitable mortgage taken on a property and the details of the Financial Institutions that extended the loan and the Details of the Borrower. CERSAI also allowed lenders to register transactions of securitisation and asset reconstruction. The ledger of CERSAI  therefore, contains the details of the borrower and lender.

It is Mandatory for All Financial Institutes to register all Loaning Information in CERSAI. The registration should be completed in 30 days in order to attend to the security interests. In January 2016, the mandate was extended further to start registration of security interests created on movable and intangible assets such as accounts receivables, book debt, and hypothecation as well as to start registration of all other types of mortgages used in India.

Register in CERSAI

Residential Construction Services also are under CERSAI, where the mortgage is involved. One can register using their website. There is an “entity registration” form available on the site. A digital signature is the access to the CERSAI portal. Once the form is filled, it has to be downloaded and signed by the authorized personnel and sent to the prescribed CERSAI address along with the necessary documents. Once the process is completed, a tab on the progress online can be kept.

CERSAI Charges

“What is the CERSAI charges for home loan?” The registration fee keeps changing from time to time. If you want to take a loan from a bank, you will have to pay a charge that would include the upfront or processing charges. The CERSAI registration charge and processing fee was clubbed from 1st January 2014. The cost is the same across all lenders in the country. The loan amount will ultimately determine the registration fee.

Loans that are above 5.00 Lacks will have to pay Rs. 500 + GST. Loans that are below 5 Lacks will have to pay Rs. 250 + service tax. If there is a delay in making updates regarding the transactions with CERSAI, it could result in a penalty.

Concluding Thoughts 

CERSAI and Credit Information Bureau India Limited (CIBIL) have joined hands to make the borrowing and lending process more streamlined. Lenders will be able to make lending decisions better because of this tie-up. It benefits both parties, ie the Borrower & Lender.

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