The Indian Government established the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) under Section 20 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It received a licence from Section 25 of the Companies Act, 1956.
The Government set up CERSAI registration in 2011 to track online data regarding lending transactions against equitable mortgage properties. Thus, if you wonder, "what is CERSAI?”, it can be described as a way of checking online data on a property after paying the required CERSAI charges.
Before CERSAI came into existence following the CERSAI Act in Section 20, only the lender and borrower of property were subject to having details on a property's encumbrance. The disjointed registration system was mainly responsible for this. As a result, fraudulent individuals could take multiple loans on the same property from banks.
Moreover, they often sold these properties to unsuspecting buyers with loans attached to them, resulting in a lack of information regarding the existing liabilities of the property.
Thus, one can easily decipher the importance of CERSAI registration. It connects to the security of mortgage loans and property transactions across India. Therefore, the need for this government initiative is evident; it enables individuals to purchase properties after being fully aware of their existence and backgrounds.
A long-term goal of CERSAI is to ensure that properties with dubious backgrounds are going under checks before sanctioning mortgage loans.