The government on Thursday operationalised central registry to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property.
Initially transactions relating to securitisation and reconstruction of financial assets and those relating to mortgage by deposit of title deeds to secure any loan or advances granted by banks and financial institutions would be registered in the central registry, the finance ministry said in a statement on Thursday.
The records maintained by the central registry would be available for search by any lender or any other person desirous of dealing with the property. Availability of such records is likely to 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.
“A central database of security interests created over property as well as assignment of such security interest by way of securitisation or asset reconstruction will make the secured lending activity in the financial market safer for lenders. This will enthuse the secured creditors to provide credit to the productive sectors to help sustain the growth momentum of the Indian economy,” the statement said.
The Central Registry of Securitisation Asset Reconstruction and Security Interest of India, a government company, licensed under Section 25 of the Companies Act, 1956 has been incorporated 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, 2002).
In the Budget, Finance Minister Pranab Mukherjee had announced the registry would be operationalised by March 11. Notifications for establishment of the registry, to be operated and maintained by the said company and for the purpose of appointment of central registrar, were issued by the government on Thursday.
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The central registry would be under the superintendence and direction of the Central Registrar.
National Housing Bank Chairman and Managing Director R V Verma would hold additional charge as the registrar of the Central Registry for a period of three months. He would also be the managing director and chief executive officer of the company.
The forms for registration and the fees for filing registration particulars as well as for taking a search in the Central Registry have been prescribed by Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Rules, 2011.