INTRODUCTION TO CERSAI WITH RECENT CHANGES LEADING UP TO CERSAI 2.0

Government of India established the 'Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), to operate/ maintain 'Central Registry' functions as per SARFAESI Act 2002.

- Sailesh Kumar

CERSAI is a central online security interest registry of India, more than a statutory obligation is a risk mitigation tool for the Banks, Housing Finance Companies, Financial institutions, and public at large to prevent multiple financing against the same property. CERSAI has brought different modification/ changes since its inception in order to serve better; latest modification is in form of migration to CERSAI 2.0 with effect from 03rd August, 2020. In this article we will discuss the background and important changes it introduced up to latest modification in form of CERSAI 2.0.

Before CERSAI, information on the encumbrance on a property was known only to the borrower and the lender; due to fragmented registration system. CERSAI's initial mandate was to maintain a central registry of 'Equitable Mortgages', where it contains information on the equitable mortgage taken on a property along with details of the financial institution that has extended the loan as well as details about the borrower. Need felt of having 'Central Registry' is because often we came to know about multiple lending on same property as Equitable Mortgage is basically a transaction between two parties Bank and the proposed borrower, taking place at the Bank creating EM.