Register all records of equitable mortgages with CERSAI: RBI to NBFCs
All Non-Banking Finance Companies (NBFCs) have been advised by the RBI to file and register the records of all equitable mortgages created in their favour on or after March 31, 2011 with the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI). Furthermore, the RBI has also asked regulators to register the records with the CERSAI as and when equitable mortgages are created in their favour.
Why did RBI ask NBFCs to keep records of equitable mortgage deals?
The Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) has been set up by the Government of India to keep records of all mortgage deals. Although it stipulated in the SARFAESI Act that it is mandatory for banks and financial institutions notified under the Act to file the details of all mortgages created in their favor, it doesn’t cover those institutions which are not notified in the Act. So, in order to expand its effectiveness RBI has asked all the financial institutions to record every mortgage deals. As per RBI, this will help to reduce the possibility of frauds as information will be available.