In order to check frauds related to the property, the Reserve Bank of India (RBI) has asked the non- banking financial companies (NBFCs) to register the records of all equitable mortgages created in their favour on and after 31st March 2011 with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) set up by the government in order to keep records of all mortgages deal.
As per the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002, financial institutions and banks are required to file the details of all mortgages created in their favor by way of deposit of title deeds on the portal of the CERSAI in the prescribed format.
Institutions notified under the SARFAESI Act have to mandatorily register with CERSAI, while the institutions that are not notified under the act, too have to register mortgages created in their favor by deposit of title deeds with the CERSAI.
The move is aimed to reduce frauds related to the property as the central bank is of the view that the potential fraud or multiple financing against the same property may not be fully prevented in the absence of the records of all the equitable mortgages obtained even by non-SARFAESI notified banks or financial institutions (including NBFCs) with the CERSAI.
