The Centre's efforts to clamp down on home loan frauds, involving multiple lending against the same property is finally taking off.
As many as 166 lending institutions are now placing their mortgage-related information before a recently set up central registry.
CRESAI portal
In the last three months, these 166 institutions – including commercial, cooperative and regional rural banks, and housing finance companies – have cumulatively posted particulars relating to 1,00,021 properties on the portal of CERSAI or the Central Registry of Securitisation Asset Reconstruction and Security Interest of India. CERSAI, which has become operational from March 31, is a not-for-profit company, in which the Centre holds 51 per cent.
The balance stake is with National Housing Bank (NHB), State Bank of India, Punjab National Bank, Bank of Baroda and seven other major public sector banks.
Shared platform
The proposal to create a central registry – a shared platform for all lending institutions to file information on the properties against which they have sanctioned loans – was originally mooted in the Finance Minister, Mr Pranab Mukherjee's 2011-12 Union Budget speech.
Banks and other lending institutions would be able to use the information recorded with the central registry to ensure that they do not make loans against already mortgaged properties, on which they will have no effective security interest.
Home loans
The current information being placed on CERSAI's portal, however, relates only to home loans sanctioned after March 31, 2011.
“For filing data on loans before March 31, we would need an amendment to the SARFESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act of 2002.
The SARFESI law now does not provide for mandatory registration of home mortgage transactions undertaken prior to the establishment of CERSAI,” Mr RV. Verma, Chairman and Managing Director of NHB, told Business Line .
Transactions
Mr Verma, who is also the Chief Executive Officer of CERSAI, added that the registry is recording close to 4,000 property loan-related transactions every day.
All this information filing is done electronically by the lenders.
While as of now only immovable property mortgages are being registered with CERSAI, the Centre may in the coming days look at bringing even movable properties, such as cars and other vehicles, under the central registry's scope, official sources said.