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In respect of creation of mortgages through
institutional finance, a number of frauds were taking
place in which multiple documents of title relating to
the same property were deposited with different
lenders
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The Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest
(SARFAESI) Act contains provisions for setting up a
“Central Registry” for the purposes of registration of
transaction of securitisation and reconstruction of
financial assets and creation of security interest.
Section 20. Central Registry
(1) The Central Government may, by notification, set-up or
cause to be set-up from such date as it may specify in such
notification, a registry to be known as the Central Registry.
(2) The head office of the Central Registry shall be at such
place as the Central Government may specify and for the
purpose of facilitating registration of transactions referred to
in sub-section (1), there may be established at such other
places as the Central Government may think fit, branch
offices of the Central Registry.
◦ Sections 21, 22 [summarised]
[Central Registrar and Central Register]
 GOI may by notification set up or cause to be setup the
Central Registry
 GOI may by notification appoint Central Registrar
 Central Register shall be kept at the head office of the
Central Registry under the control and management of
Central Registrar.
◦ Sections 23, 24, 25 [summarised]
 Filing of transactions of securitisation, reconstruction
and creation of security interest
 Modification of security interest registered under the
act
 Reporting of satisfaction by Securitisation company,
reconstruction company or secured creditor
◦ Section 26
 Right to inspect particulars of securitisation …
◦ Section 31
 Not applicability of the act to ….. (h) financial asset not
exceeding Rs. 1 lakh, (i) security interest created in
agricultural land, and (j) when amount due is less than
20% of principal plus interest
◦ Section 38
 Power of Central Government to make rules …
◦ Section 39
 Provisions of section 21(2-4), 22 – 27 to apply after
Central Registry is set up
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In the Budget speech for 2011-12, the Union Finance
Minister had announced that the Central Registry would be
operationalised by March 31, 2011.
CERSAI was incorporated and soft launched on March 31,
2011 for the purpose of operating and maintaining the
Central Registry under the provisions of the Securitisation
and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI Act).
The records maintained by the Central Registry will be
available for search by any lender or any other person
desirous of dealing with the property.
The company has been setup with an authorised capital of
Rs 100 crore and authorised paid up capital of Rs 49 crore
with Government’s contribution of 51% and rest 49% by 11
shareholding banks.
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National Housing Bank
State Bank of India
Punjab National Bank
Bank of Baroda
Bank of India
Canara Bank
IDBI Bank Ltd
Union Bank of India
Central Bank of India
Syndicate Bank
Indian Overseas Bank
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Government of India (25 crore)
National Housing Bank (25 lac)
State Bank of India (25 lac)
Punjab National Bank (25 lac)
Bank of Baroda (25 lac)
Bank of India (25 lac)
Canara Bank (25 lac)
IDBI Bank Ltd (25 lac)
Union Bank of India (25 lac)
Central Bank of India (25 lac)
Syndicate Bank (25 lac)
Indian Overseas Bank (25 lac)
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Before the registration of transactions can be
done on the Central Registry by an
institution, the institution has to apply for
registration of User Administrator(s) with
CERSAI.
The User Administrator creates and
authorizes users of the institution to access
the Central Registry for various purposes.
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The process of registration of transactions of
securitisation, asset reconstruction and
creation of security interest is carried out
through the portal of the Central Registry
which can be accessed on the Internet.
The URL of this web-portal is
www.cersai.org.in.
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The transactions related to registration of
mortgage by deposit of title deeds in favour of
banks and financial institutions are entered in the
system.
As per Central Registry Rules 2011, each
institution has to register a security transaction
with central registry system within thirty days of
the creation of charge / securitization.
There is a fee for each registration which has to
be paid at the time of registration.
The registration process has since been extended
to
the
assignment
of
debt
(factoring
transactions).
Serial
Number
(1)
Nature of
Registered
transaction
(2)
to
be FORM No.
Amount of fee payable
(3)
(4)
1.
Particulars of
creation or FORM I
modification of Security Interest
in favour of secured creditors
500 for creation and for any subsequent
modification of Security interest in favour
of a secured creditor for a loan above 5
lakh. For a loan upto 5 lakh, the fee would
be 250 for both creation and modification
of security interest.
2.
Satisfaction of
Security Interest
250
any
existing FORM II
No fee is charged on subsisting registrations
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Form I - Creation and modification of charge
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Form II - Satisfaction of Charge
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Form III - Securitisation or Reconstruction of
Financial Assets
Form IV - Satisfaction of Securitisation or
Reconstruction of Financial Assets
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Registration of the entity / institution
Registration of two Primary User
Administrators (PUAs) with CERSAI.
Registration of Maker and Checker users for
respective institutions
Availability of Digital Certificate for PUAs and
Checkers
Registration of Digital Certificate with CERSAI
portal
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Ernst & Young was engaged initially as a management
consultant for preparation of RFP document,
finalisation of SLA and UAT testing.
The task of setting up the portal was entrusted to
TCS.
The IT infrastructure for Central Registry has since
been commissioned with Data Centre (DC) at Noida
and Disaster Recovery Site (DRS) at Chennai.
These centers are manned on 24X7 basis by the IT
vendor of the company.
The help-desk support is being extended from the
Project Office at Bhikaji Cama Place, New Delhi.
The support center is manned by six persons from
the IT vendor.
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All Commercial Banks
Private Banks
Foreign Banks
Co-Operative Banks
RRBs
Selected HFCs (22)
FIs
Asset Reconstruction Companies
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Factoring Regulation Act - every factor shall file,
for the purposes of registration, the particulars
of every transaction of assignment of receivables
in its favour with the Central Registry.
Form-I for registration of factoring transactions
and Form-II for satisfaction of factoring
transactions along with fee for registration are
prescribed by the Government.
Factoring transactions are also being registered
at CERSAI portal.
Number of institutions registered
Number of users registered
292
108089
Number of fee based transactions
1861189
Number of subsisting registrations (non-fee based)
5552909
Total Transactions Registered
7414098
Average number of transactions (last 10 days)
94441
Institutions
Number
Public Sector Bank
26
Private Bank
20
Foreign Bank
26
Co-operative Bank
66
Regional Rural Bank
72
Housing Finance Company/FIs
76
Local Area Bank
Grand Total
1
287
Institution Name
Public Sector Bank
Private Bank
Foreign Bank
Co-operative Bank
Regional Rural Bank
Housing Finance Company / Fis
Local Area Bank
Total
Users
94,270
7,941
326
1,657
1,018
1,570
6
1,06,788
Period
Subsisting
Regular
2188475
1066707
April 2012
744868
49355
May 2012
94503
29459
June 2012
960413
131284
July 2012
331885
171220
August 2012
227691
100054
September 2012
841570
197065
October 2012
166649
118493
Till March 2012
INSTITUTION_NAME
COUNT
STATE BANK OF INDIA
1668756
HDFC LIMITED
1075240
PUNJAB NATIONAL BANK
313652
ICICI BANK LIMITED
257588
CANARA BANK
232340
UNION BANK OF INDIA
227462
BANK OF BARODA
221870
IDBI BANK LIMITED
196619
BANK OF INDIA
175246
SYNDICATE BANK
164553
Institutions Registered
Factoring Companies (Public)
3
Factoring Companies (Private)
2
Total
5
Number of users registered
Total number of factoring transactions
62
588
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Training programmes for Public Sector Banks, Housing
Finance Companies, Private & Foreign Banks, Co-operative
Banks, Regional Rural Banks and other Financial
Institutions were organised at New Delhi, Mumbai,
Bengaluru and Kolkata during Jan-Feb 2012.
The training programmes were aimed to enhance
awareness and capability among the member users of the
registration system, and also enrich the participants
through exchange of views/ideas between CERSAI and the
member institutions.
Training programmes were conducted in eight different
batches with two days each per batch. The total number of
participants who attended the training programme was
509.
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The records maintained by the Central Registry
are required to be available for search by any
citizen on deposit of requisite fee as prescribed
under the Rules.
Online search will be on the uploaded Security
Interest records present in the Central Registry’s
database. This facility will be helpful to general
public to check the encumbrance status on a
given property and common knowledge of the
encumbrance status by all lending institutions
will help in preventing frauds.
This facility is expected to start from 3rd week of
January 2013.
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Property ownership, its history, and information on buy/sell
transactions is not available easily to the average citizen.
Central Registry addresses the encumbrance status of a property,
there is no mechanism available in the Central Registry system to
check the ownership of a property.
Although CR is aimed at curtailing frauds wherein multiple loans
are availed by deposit of same title deed with multiple lenders,
non-availability of information like ownership etc. at the time of
creation of security interest does not guarantee whether the
borrower is the actual owner of the property.
With land being a state subject governed by respective state
laws, it is required to have a synergy between the CR system and
the state registries. This will be beneficial for both the Central
Registry and State governments as well.
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This common synergy will benefit lenders by way of
providing information on the existence of the property and
genuineness of the title. At the same time, state
governments can check the encumbrance status before
accepting the transaction and title claim.
This common registry will benefit all stake holders viz,
citizens,
lending
institutions,
central
and
state
governments.
For states this will provide a more
transparent market resulting in greater funds flow.
For the lenders, total title information will become
available besides encumbrance. In the absence of
information on the genuine title, only encumbrance
certificate will not be sufficient to prevent fraud.
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Bank Guarantees are governed under the
Indian Contract Act, 1872
RBI had issued several guidelines for avoiding
frauds in bank guarantees, however, there are
several instances of fake BGs
Availability of information on BGs on a
Central Portal for online search may be
explored
Credentials can be verified online
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CERSAI passing through a rapid expansion
stage and required to move fast to fulfill the
responsibility placed and to provide
knowledge feedback to government and other
stake holders.
IFC has shown interest in extending cooperation
IFC’s collateral Registries / Secured Lending
Program provides advisory services to help
strengthen the development of the private
sector in South Asia.
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IFC has agreed to provide co-operation on the
following.
(i) Study of Registries in other countries and
their operations
(ii) Strategy and Business Planning
(iii) Study / Research for Legislative and
Regulatory Support
(iv) Supporting streamlining of internal
processes and procedure
(v) Operational Support
(vi) Planning for Monitoring of Compliances and
Expansion.