Question

What is the primary significance and core operational objective of establishing CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India) under the SARFAESI Act, 2002?

Q: Answer-What is the primary significance and core operational objective of establishing CERSAI (Central Regi...

The central significance of CERSAI is to maintain a unified, central online registry of equitable mortgages and other security interests created on properties. Before CERSAI, a borrower could easily deposit duplicate or forged title deeds at different banks to secure multiple loans on the same collateral. CERSAI removes this information asymmetry by allowing banks and the public to verify if a property is already encumbered pledged to another lender, thereby mitigating fraud and securing the lending ecosystem.

A To physically store all original property title deeds submitted by corporate borrowers across India.

B To act as a centralized database of security interests to prevent fraudulent multi-financing, where a borrower takes multiple loans from different banks against the same property.

C To provide banks with 100% government-backed credit default insurance in the event a secured asset becomes a Non-Performing Asset (NPA).

D To function as a specialized Debt Recovery Tribunal (DRT) exclusively for Asset Reconstruction Companies (ARCs).

E To determine and regulate the base interest rates and processing fees charged by commercial banks on mortgage loans.

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What is the primary significance and core operational objective of establishing CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India) under the SARFAESI Act, 2002?

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