CENTRAL REGISTRY OF SECURITIZATION ASSET RECONSTRUCTION AND SECURITY INTEREST

[Mr. M. GOVINDARAJAN]

Central Registry

Section 2(1)(g) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘Act’ for short)  defines the expression ‘Central Registry’ as the registry set up or cause to be set up under sub-section (1) of section 20.  The Central Registry is having its own seal for the purposes of registration of transaction of securitization and reconstruction of financial assets and creation of security interest under this Act.  This registry is called as ‘Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI)

Head Office

The head office of the Central Registry shall be at such place as the Central Government may specify and for the purpose of facilitating registration of transactions there may be established at such other places as the Central Government may think fit, branch offices of the Central Registry.  The Central Government may, by notification, define the territorial limits within which an office of the Central Registry may exercise its functions.  It is a Government company licensed under section 8 of the Companies Act, 2013 having its Registered Office at New Delhi.  The company was incorporated with majority shareholding of the Central Government, Public Sector Banks and National Housing Bank for the purpose of operating a Registration System under the provisions of the Act. 

Integration of registration systems

Section 20A of the Act provides for the integration of the registration records of such registration systems with the records of Central Registry.  The registration records includes the records of registration under-

• the Companies Act, 2013;
• the Registration Act, 1908;
• the Merchant Shipping Act, 1958;
• the Motor Vehicles Act, 1988;
• the Patents Act, 1970;
• the Designs Act, 2000; or
• other such records under any other law for the time being in force.

Powers of RBI

The Central Government delegated its powers and functions, in relation to establishment, operations and regulation of the CERSAI to the Reserve Bank of India, subject to such terms and conditions as may be prescribed.

Registrar and officers

The Central Government appointed a person for the purpose of registration of transactions relating to securitization, reconstruction of financial assets and security interest created over properties, to be known as the Central Registrar. The Central Government also appointed such other officers with such designations as it thinks fit for the purpose of discharging, under the superintendence and direction of the Central Registrar, such functions of the Central Registrar under this Act as he may, from time to time, authorize them to discharge.

Register

CERSAI shall keep the records at the head office of the Central Registry for entering the particulars of the transactions relating to-

•  securitization of financial assets;
•  reconstruction of financial assets; and
• creation of security interest.

It shall be lawful for the CERSAI to keep the records wholly or partly in computer, floppies, diskettes or in any other electronic form subject to such safeguards as may be prescribed.  Where such register is maintained wholly or partly in computer, floppies, diskettes or in any other electronic form, any reference in this Act to entry in the CERSAI shall be construed as a reference to any entry as maintained in computer or in any other electronic form.

The register shall be kept under the control and management of the Central Registrar

Filing of transactions

• The particulars of every transaction of securitization and reconstruction of financial assets and creation, modification or satisfaction of security interest by way of mortgage by deposit of title deeds shall be filed in Form I, Form II, Form III or Form IV, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature.
• The particulars of creation, modification or satisfaction of security interest in hypothecation of plant and machinery, stocks, debt including book debt or receivables, whether existing or future shall be filed in Form I or Form II, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature. 
• The particulars of creation, modification or satisfaction of security interest in intangible assets, being knowhow, patent, copyright, trade mark, licence, franchise or any other business or commercial right of similar nature, shall be filed in Form I or Form II, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature. - Fee - NIL
• The Particulars of creation, modification or satisfaction of security interest in any under construction residential or commercial building or a part thereof by an agreement or instrument other than by mortgage, shall be filed in Form I or Form II, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature.
• The particulars of creation, modification or satisfaction of a right, title or interest of any kind, created by a borrower in favor of other creditors shall be filed in Form number I, through-

• e sign (through an Aadhaar based One Time Password validation); or
•  digital signature; or
• CKYC number.

• The particulars of attachment orders with the particulars of the assessees and details of tax or other Government dues shall be filed electronically by the officers authorized in that behalf by such authority of the Central Government or the State Government or local authority in Form number I, and particulars of modification or satisfaction of such attachment orders shall be filed in Form number I or Form number II as the case may be.
• The particulars of attachment orders passed by a court or other authority shall be filed electronically by the person in whose favor such orders have been passed in Form number I and the particulars of modification or satisfaction of such attachment orders shall be filed in Form number I or Form number II through-

• e sign (through an Aadhaar based One Time Password validation); or
• digital signature; or
• CKYC number.

Fee

The fee is payable as detailed below-

• Form I - The fee payable is Rs.100 for creation and for any subsequent modification of security interest for a loan above Rs.5 lakh. For a loan up to Rs. 5 lakh, the fee would be Rs. 50 for both creation and modification of security interest.

• Form II - NIL.
• Form III - Particulars of securitization or reconstruction of financial assets - Rs.500/-.
• Form IV - Particulars of satisfaction of securitization or reconstruction transactions - Rs.50/-.
• Any application for information recorded/ maintained in the Register by any person - Rs.10/-.
• Any application for condoning the delay up to 30 days.

Where particulars of transaction of creation or modification of more than one security interest are filed by a person, the fee payable by such person shall be the one that is highest among the fee prescribed for security interests for which particulars of creation or modification are filed by such person

The particulars of every transaction of securitization, asset reconstruction or creation of security interest shall be filed, with the Central Registrar in the manner and on payment of such fee as may be prescribed.  The Central Government may, by notification, require registration of all transactions of securitization, or asset reconstruction or creation of security interest which are subsisting on or before the date of establishment of the CERSAI within such period and on payment of such fees as may be prescribed.

The Central Government may, by notification, require the registration of transaction relating to different types of security interest created on different kinds of property with the CERSAI.   The Central Government may, by rules, prescribe forms for registration for different types of security interest under this section and fee to be charged for such registration.

Modification

Whenever the terms or conditions, or the extent or operation of any security interest registered under this Act are or is asset reconstruction company or the secured creditors, as the case may be, to send to the Central Registrar, the particulars of such modification, and the provisions of this Chapter as to registration of a security interest shall apply to such modification modified, it shall be the duty of the ²[asset reconstruction company] or the of such security interest.

Satisfaction of security interest

The asset reconstruction company/ the secured creditors shall give intimation to the Central Registrar of the payment or satisfaction in full, of any security interest relating to the asset reconstruction company or the secured creditors and requiring registration under this Act, within 30 days from the date of such payment or satisfaction.  On receipt of intimation the Central Registrar shall order that a memorandum of satisfaction shall be entered in the Central Register.

If the concerned borrower gives an intimation to the Central Registrar for not recording the payment or satisfaction, the Central Registrar shall on receipt of such intimation, cause a notice to be sent to the asset reconstruction company or the secured creditors calling upon it to show cause within a time not exceeding 14 days specified in such notice, as to why payment or satisfaction should not be recorded as intimated to the Central Registrar.  If no cause is shown, the Central Registrar shall order that a memorandum of satisfaction shall be entered in the Central Register.   If cause is shown, the Central Registrar shall record a note to that effect in the Central Register, and shall inform the borrower that he has done so.

Right to inspection

The particulars of securitization or reconstruction or security interest entered in the Central register of such transactions kept shall be open during the business hours for inspection by any person on payment of such fees as may be prescribed.  The Central Register maintained in electronic form shall also be open during the business hours for the inspection of any person through electronic media on payment of such fees as may be prescribed.

Rectification

The Central Government, on being satisfied--

• that the omission to file with the Registrar the particulars of any transaction of securitization, asset reconstruction or security interest or modification or satisfaction of such transaction or; the omission or mis-statement of any particular with respect to any such transaction or modification or with respect to any satisfaction or other entry made in pursuance of section 23 or section 24 or section 25 of the principal Act was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors; or
• that on other grounds, it is just and equitable to grant relief,

may, on the application of a secured creditor or asset reconstruction company or any other person interested on such terms and conditions as it may seem to the Central Government just and expedient, direct that the time for filing of the particulars of the transaction for registration or modification or satisfaction shall be extended or, as the case may require, the omission or mis-statement shall be rectified.

Where the Central Government extends the time for the registration of transaction of security interest or securitization or asset reconstruction or modification or satisfaction thereof, the order shall not prejudice any rights acquired in respect of the property concerned or financial asset before the transaction is actually registered.