Back in April 2011, the GOI operationlized the Central Registry of property by incorporating the Central Registry of Securitisation Asset Reconstruction and Security Interest of India as a government company under the Companies Act, 1956.
Set up as per the announcement made by Finance Minister during his budget speech for 2011-12, the objective of the Central Registry is to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property.
As stipulated, the records maintained by the company will be available for search by any lender or any other person desirous of dealing with the property. Accordingly, availability of such records will prevent frauds involving multiple lending against the security of same property as well as fraudulent sale of property without disclosing the security interest over such property.
The recent update put out on 29 June 2012 extended further registration by banks without any additional taxes:
Department of Financial Services, Ministry of Finance has issued instructions to Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) extending the registration of subsisting transactions prior to 1.4.2011 free of any fee/cost for a further period of three months from 1.7.2012 to 30.9.2012.
It’s nice to see India further cutting down on the potential for fraud regarding property. In comparison with the US, this still remained an issue with lending institutions leading up to the recent financial crisis. It’s nice to see that India can leapfrog and learn early from other countries’ mistakes.